Centre asks 3 oil cos to pay $ 3.8b

THE LIABILITY is to be split between the three companies in proportion to their stake in PMT. STATE- OWNED ONGC has 40 per cent interest while RIL and Shell hold 30 per cent apiece.

New Delhi, May 24: The government has reiterated a demand for $ 3.8 billion dollars from Reliance Industries Ltd ( RIL), Shell and ONGC after 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 ONGC has 40 per cent interest while RIL and Shell hold 30 per cent 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 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 October 12, 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 May 2, 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 in a statement.

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.