RIL sends arbitration notice to OilMin on KG-D6

New Delhi : With an action imminent against it for dip in output from KG-D6 fields, Reliance Industries (RIL) has slapped Oil Ministry with an arbitration notice saying the move to disallow a part of its investment in India's largest gas field is illegal and violation of signed contract.

The ministry wants to punish RIL for acute pressure drop and water ingress bringing down output to about 34 million standard cubic metres per day (mmscmd) compared to 61.88 mmcmd target, by limiting the amount of expenditure it is allowed to recoup.

Sources privy to the development said RIL in November 24 notice stated that restricting cost recovery -- now at 100% -- in proportion to the gas output was against the Production Sharing Contract (PSC) it had signed for KG-D6 block in 2000.