According to a news agency,
In an emailed statement, it said it "is considering joining RIL in invoking the dispute resolution mechanism in the Production Sharing Contract (
The oil ministry had on November 3 issued a notice to RIL,
After deducting USD 71.71 million royalty paid on the gas produced and adding an interest at the rate of Libor plus 2 per cent, totalling USD 149.86 million, a total demand of USD 1.55 billion was made on RIL, BP and Niko.
RIL had on Friday stated that it "proposes to invoke the dispute resolution mechanism in the PSC and issue a Notice of Arbitration to the Government."
"RIL remains convinced of being able to fully justify and vindicate its position that the government's claim is not sustainable," the company had said, adding it has worked within the boundaries of the KG-D6 block awarded to it and has complied with all applicable regulations and provisions of the PSC.
"The claim of the government is based on misreading and misinterpretation of key elements of the PSC and is without precedent in the oil and gas industry, anywhere in the world," it had said.
BP, which holds the remaining 30 per cent interest, said it is evaluating its options.
"BP believes that the action taken is neither in line with well-established global practices nor is it in line with the PSC. We are aligned and working with our partners to evaluate our options to achieve an effective resolution," a
Originally, ONGC had sued RIL for producing gas that had migrated from its blocks KG-DWN-98/2 (KG-D5) and
Under direction of the
Subsequently, the ministry asked its upstream technical arm DGH to calculate the amount of compensation and a demand notice was slapped on RIL-BP-Niko.
"The committee has concluded that the contractor's (RIL- BP-Niko) production of migrated gas and retention of ensuing benefits amounts to unjust enrichment, since the production sharing contract (PSC)... does not permit a contractor to produce and sell migrated gas," the November 3 demand note said.
The ministry said it had accepted the Shah committee report and consequently "it has been decided by the government to claim restitution from the contractor of the block KG-DWN- 98/3 for the unjust benefit received and unfairly retained by them".