Government Slaps $264 mn Penalty on Reliance Industries Ltd, BP

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(PTI)

The government has imposed a new penalty of $ 264 million (about Rs 1,700 crore) on Reliance Industries Ltd and its partners for producing less than the targeted natural gas from eastern offshore KG-D6 fields in 2015-16.

The total penalty now, which is in the form of disallowing recovery of cost incurred for missing the target during six years beginning April 1, 2010, stands at $ 3.02 billion, an oil ministry official said.

The Production Sharing Contract (PSC) allows RIL and its partners BP PLC of the UK and Canada’s Niko Resources to deduct all capital and operating expenses from the sale of gas before sharing profit with the government. Disallowing costs will result in government’s profit share rising. The government has claimed an additional $ 175 million as its profit share after the cost disallowance, the official said.

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