Govt seeks $3.8 billion from RIL, ONGC, Shell2 min read . Updated: 24 May 2018, 09:10 PM IST
In a regulatory filing, RIL said the government had on May 2017 sought $3.8 billion as its share from the western offshore field and has 'recently repeated its demand'
New Delhi:The government has reiterated a demand for $3.8 billion dollars from Reliance Industries, Shell and ONGC following an English court ruling over government share from the Panna-Mukta and Tapti fields in western offshore.
In a regulatory filing, RIL said the government had on May 2017 sought $3.8 billion as its share from the western offshore field and has “recently repeated its demand".
The liability is to be split between the three companies in proportion to their stake in PMT. State-owned Oil and Natural Gas Corp (ONGC) has 40% interest while RIL and Shell hold 30% apiece.
The demand pertains to interpretation of the contract for the Panna-Mukta and Tapti (PMT) oil and gas fields in the Arabian Sea.
In December 2010, BG Exploration & Production India Ltd and RIL initiated an arbitration against the Government of India (GoI) after a dispute over the state’s share of profit and royalty from Panna-Mukta and Mid and South Tapti contract areas off the west coast.
“The Arbitration Tribunal determined a number of disputes in a final partial award on 12 October, 2016, which was accompanied by two dissenting opinions," RIL said in the filing.
BG, which was subsequently acquired by Shell, and RIL initiated proceedings under English Arbitration Act 1996 to challenge the arbitration award before the English Commercial Court in November 2016.
On 2 May, 2018, the Court delivered its final judgement, remitting a significant issue for redetermination by the Tribunal within three months while disposing off eight other issues, RIL said without giving details.
The Arbitration Tribunal has scheduled a hearing to determine the remitted issue and will thereafter deliver an award, it said. “On May 25, 2017, GoI, in disregard to the arbitration proceedings and pending English court proceeding, claimed - $3.8 billion from the contractor consortium of BG, ONGC and RIL (RIL share being $1.15 billion). This amount was calculated by GOI on its own purported interpretation of the arbitration award," RIL said.
It insisted that before taking up the issue of quantification of liability, the Tribunal has to decide the issue which is remitted by the English court to it. BG-RIL propose to file an application to the Tribunal for increase of Cost Recovery Limit which they are entitled to do under the Production Sharing Contracts.
“Tribunal can consider the issue of quantification of liability (if any) only after these two issues are decided," RIL said. “Several issues relating to the claim made by GOI are subject to pending arbitration proceedings."