Petroleum minister Dharmendra Pradhan on Monday said the government has slapped an additional penalty of $582 million on Reliance Industries and its partners BP and Niko Resources for failing to meet output from
KG-D6 blocks as envisaged. This takes the total fine levied on the private explorers to $2.276 billion till March 2014.
The contractor had slapped an arbitration notice, refuting the penalty and said output fell because of geological complexities.
The minister told the Lok Sabha that a claim of an additional profit petroleum to the tune of $115 million is to be paid by the contractor on account of disallowance of cumulative contract costs of $1.797 billion till 2012-13.
The contractor had set up production facilities to produce gas to a maximum level of 80 million metric standard cubic meter per day (mmscmd), but failed to adhere to the approved field development plan in terms of drilling and putting on stream the required number of wells and consequent achievement of projected gas production profile.
Pradhan said the gas output from the KG D6 block in eastern offshore was supposed to be 80 mmscmd, but actual output was just 35.33 mmscmd in FY12, 20.88 mmscmd in FY13 and 9.77 mmscmd in FY14.
“GAIL and Chennai Petroleum (buyers of oil and gas produced from KG-D6 block) have been told to remit the sale proceeds of crude oil/condensate/natural gas from KG-DWN-98/3 (KG-D6) block which falls due immediately into the government account so as to recover $115,263,612 at the rate of 50% by each company and deposit the same with the government,” Pradhan said.