Petroleum Ministry asks RIL to withdraw notice

NEW DELHI: The Petroleum Ministry has asked Reliance Industries to immediately withdraw its arbitration notice against the proposed move to curtail cost-recovery at its KG-D6 gas fields, saying "as on date", there was no cause for such action. Partha Sarthi Das, Director in the Exploration Division of the Ministry, on January 25 wrote to RIL Executive Director P M S Prasad saying "as on date", no dispute has arisen to warrant arbitration and the company should withdraw the notice invoking arbitration forthwith, ministry sources said.

RIL had on November 24, 2011, slapped the notice upon learning that the ministry was moving to restrict cost-recovery in the KG-D6 block after flagging gas production led to utilisation of less than half of the 80 million cubic metres per day of infrastructure the company had built.

The ministry's technical advisor, the DGH, advised disallowing $1.235 billion of out of the $5.7 billion expenditure already made as RIL has drilled and completed only 18 wells as against agreed the 31 wells in the block, resulting in lower gas output.