Govt Imposes $579 Million Additional Penalty On RIL

The government has imposed an additional penalty of $579 million on Reliance Industries Limited (RIL) for producing less than the targeted natural gas from its KG-D6 block, Oil Minister Dharmendra Pradhan said.

With this, the total penalty on RIL for missing the target in four financial years beginning April 2010 has now reached cumulative $2.376 billion, the minister informed the Lok Sabha.

Pradhan said gas output from the Dhirubhai-1 and 3 gas fields in the eastern offshore KG-D6 block should have been 80 million standard cubic meters per day (mmscmd) but the actual production was only 35.33 mmscmd in 2011-12, 20.88 mmscmd in 2012-13 and 9.77 mmscmd in FY2013-14.

"The Ministry of Petroleum and Natural Gas has also raised a claim of additional profit petroleum to the tune of $115 million to be paid by the contractor, on account of disallowance of cumulative contract costs of $1.797 billion till 2012-13," he said.

"GAIL and Chennai Petroleum (who buy oil and gas produced from KG-D6 block) have been directed to remit the sale proceed of crude oil/condensate/natural gas from KG-DWN-98/3 (KG-D6) block which falls due immediately into the Government account so as to recover an amount of $115,263,612 at the rate of 50% by each company and deposit the same with the government," he said.