ONGC gas row: Govt. imposes $1.55 bn demand on RIL-BP-Niko

TIL Desk Business/New Delhi/ Government has slapped a USD 1.55 billion demand on Reliance Industries and its partners BP and Niko for “unfairly enriching” by producing natural gas belonging to state-owned ONGC, a move that is most likely to land in arbitration.

The oil ministry on November 3 issued a notice to all the three partners seeking USD 1.47 billion for producing 338.332 million British thermal unit in seven years ended March 2016.

After deducting USD 71.71 million royalty paid on the gas produced and adding an interest at the rate of Libor plus 2 per cent totaling USD 149.86 million, a total demand of USD 1.55 billion was made on RIL, BP and Niko.

Originally, ONGC had sought suing RIL and seeking compensation for the gas that had migrated from its blocks KG-DWN-98/2 (KG-D5) and Godavari PML in the KG basin in the Bay of Bengal to neighbouring KG-DWN-98/3 (KG-D6) block of RIL and produced by the private company.