RIL challenges oil min taking away 5 gas finds

February 11, 2015 13:31

Reliance Industries has slapped an arbitration notice challenging oil ministry's decision to take away 814 square kilometer of its eastern offshore KG-D6 area that contained five gas discoveries.

As per norm of giving up non-discovery area, RIL had in 2013 offered to give up 5,385 sq km out of a total 7,645 sq km area in Krishna Godavari basin KG-D6 block. But the ministry on October 30, 2013 ordered 6,198.88 sq km of total area to be taken away as the time allocated for producing from these had expired.

RIL on January 14 challenged this order stating the 814 sq km of additional area that the ministry had taken away contained five gas discoveries holding close to 1 trillion cubic feet of reserves.

Sources said the company in the notice demanded that the dispute on taking away the area be referred to arbitration, the relinquishment order be withdrawn and compensation be paid for breach of contract by the government.

As per norms, a contractor is allowed to retain only that area where discoveries have been made. But in case of KG-D6, the Directorate General of Hydrocarbons (DGH) ordered larger area to be taken away as RIL had allegedly failed to develop the finds within the stipulated time-frame.

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