Government slaps $1.55 billion penalty on Reliance Industries

The government has slapped a $ 1.55 million fine on Reliance Industries and its partners for extracting natural gas that came under the state-owned ONGC in the KG basin over the past seven years.

According to sources, a notice regarding the same has been sent to RIL by the Oil Ministry.

In a report by the Justice A P Shah Committee presented to the Oil Ministry, it said that the Mukesh Ambani-led firm should pay the government for the gas that had seeped from ONGC blocks into its fields.

"RIL's action of producing and selling gas migrated from ONGC block is unjust enrichment. Over 11 billion cubic metres of gas had flowed from the ONGC block to RIL's fields between April 1, 2009 and March 31, 2015. Of this, RIL has already produced about 9 bcm," the report said.

The panel, however, said the compensation should go to the government and not ONGC.

"The Government of India, and not ONGC, is entitled to claim restitution from RIL for the unjust benefit it received and unfairly retained. ONGC has no locus standi to bring a tortuous claim against RIL for trespass/conversion since it does not have any ownership rights or possessory interest in the natural gas," the committee said.

As much as 11.122 billion cubic meters of gas worth Rs 11,000 crore at present, had migrated from its Godavari-PML and KG-DWN-98/2 blocks to adjoining KG-D6 of RIL between April 1, 2009 and March 31, 2015. This has emptied the ONGC’s reservoirs.
(image: Indiatimes)