The central government has issued a demand notice of $ 2.81 billion (Rs 24500 crore) to its partners including Reliance Industries and BP PLC for gas production from oil and natural gas corporation (ONGC) blocks. ,
The move is taken after a judgment given by a bench of the Delhi High Court on 14 February, in which the earlier decision of the Media Tribunal was overturned, in which Reliance and his partners were freed from the obligation and ordered to be compensated.
In the information given to the stock exchange, Reliance Industries said that the Ministry of Petroleum and Natural Gas has ordered PSC contractor Reliance Industries, BP Exploration (Alpha) Limited to follow the court order. And NECO Limited. Has sent a demand notice demanding compensation of $ 2.81 billion.
What is controversy?
ONGC suspected that the natural gas from its KG-DWN-98/2 (KG-D5) and G-4 blocks was going into the KG-DWN-98/3 (KG-D6) block of Reliance in the Natural Gas Krishna-Godavari basin. ONGC claimed that its gas reserves were going out of the four wells dug by Reliance on the border of the block. Following the ONGC complaint, an independent investigation was conducted by the Global Consultant Degigolier and McNoton (D&M). It was found that in 2015 there was a connection between the two blocks and the amount of gas migration was also determined. Therefore, the government has intervened and forced Reliance and its partners to pay compensation.
Reliance holds 60 percent stake in Krishna-Godavari basin
Reliance holds 60 per cent stake in Krishna Godavari Basin Block KG-DWN-98/3 (KG-D6), while BP holds 30 per cent stake and Nico holds 10 per cent. These companies produce natural gas under the production partnership contracts. The central government filed an appeal in this regard in the Delhi High Court in 2023. Reliance had earlier said that it would challenge the decision of the Delhi High Court bench in the case in the Supreme Court.
