Government stops issuing Reliance-BP penalty notices for KG-D6 gas output shortfall


Government stops issuing Reliance-BP penalty notices for KG-D6 gas output shortfall

The government has stopped issuing penalties on Reliance Industries and its partner BP plc for natural gas production from eastern offshore KG-D6 fields not matching the targets after the matter went into arbitration, according to an RTI reply by the DGH and sources.

While a challenge by Reliance-BP to the imposition of penalties in the form of disallowance of recovery of a part of the cost of incurred on the fields led to the government stopping issuing notices after 2016, a similar arbitration proceeding had not prevented it from selling shares, seizing dividends and confiscating tax refunds – totalling about USD 1 billion, to recover retrospective tax dues from Cairn Energy Plc of UK.

The government had between 2012 and 2016 disallowed Reliance from recovering the cost of USD 3.02 billion for KG-D6 output lagging targets, but no notice was issued after that even though production has plummeted to a fraction of the projections. Read More

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