USD 579 mn penalty on Reliance

July 14, 2014 17:56
USD 579 mn penalty on Reliance

The Central government has slapped Reliance Industries [RIL] with an additional penalty of USD579 millions for producing less than targeted natural gas from its Krishna-Godavari [KG] D6 block.  With this the total penalty on RIL stands at USD 2.376 billions said Oil Minister Dharmendra Pradhan in Lok Sabha today.

The gas output from the Dhirubhai-1 and 3 gas field in the eastern offshore KG-D6 block was supposed to be 80 million metric standard cubic meters per day [MMSCMD] but actual production was only 35.33 mmscmd in 2011-12, 20.88 mmscmd in 2012-13 and 9.77 mmscmd in 2013-14 and whereas this year the output has been only 8.05 mmscmd.

Apart from this penalty the government believes that USD 115 million in additional profit share would have accrued to the government from disallowing the cost in 2013-14 and after including the cost disallowance in 2013-14, the total additional profit of the government stands at USD 195 millions which is to be paid by RIL.

The contractor [RIL] blames that geological complexities are responsible for the down fall of output.

(AW: Vamshi)

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