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Centre wins arbitration award against RIL in 4 oil blocks: Report

RIL paid a penalty amount way beyond $26 mn, which it had hoped to recover with a favourable arbitration award

BS Web Team  |  New Delhi 

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(RIL) is set to lose tens of millions of dollars as the government has won the award in the arbitration case against the firm with relation to non-completion of 'work programme' in four oil blocks, the Economic Times reported on Sunday while citing sources familiar with the development. According to the report, despite having paid the penalty already, RIL had contested its quantum that was set by the government, which had demanded around $90 million. 

Six years back, RIL had opted for arbitration since it disagreed with the amount of the fine imposed by the government. Having paid the penalty, RIL, according to the financial daily, had hoped that winning the case would have led to the recovery of some of the amount. The report added that in 2006, the Directorate General of Hydrocarbons had recommended that the penalty imposed by the government be reduced to $26 million. While it could not be ascertained how much the firm paid in the form of penalty, sources told the financial daily that the amount was much higher than $26 million. 

According to the financial daily, the case related to four blocks — KG-OSN-97/3, KG-OSN-97/4, and MB-OSN-97/3 located on eastern coast and GK-OSN-97/1 in the western part of India. The work programme in question consists of conducting surveys and exploratory drilling, the report explained, adding that this commitment and the percentage of profits a firm is ready to share with the government act as deciding factors when it comes to winning an exploration block during auctions.

First Published: Mon, October 09 2017. 17:50 IST
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