Reliance Industries' shares fall on arbitration penalty

NEW DELHI: Shares of Reliance Industries declined on Tuesday after the government ordered the company along with Shell and ONGC to pay a combined $3 billion in penalty following an arbitration award in the Panna Mukta Tapti (PMT) oil field dispute that went in favour of the government, according to people familiar with the matter.

Following the development, the stock shed 2.01 per cent to end the session at Rs 1,519.90 on BSE. It opened at Rs 1,548.40 and touched an intraday high and low of Rs 1,551.50 and Rs 1,512 respectively.

According to reports, RIL and Shell have appealed the arbitration award in a UK court.

On the other hand, shares of ONGC closed at Rs 161.75, up 1.06 per cent on BSE.

Reliance also withdrew another arbitration last year related to a government order to relinquish 80 per cent of KG-D6 block that the company operates.

Four arbitration cases are underway and these relate to recovery of cost of developing fields, penalty for unfinished committed minimum work programme in KG-D6 and the government demand for compensation for producing gas from ONGC’s fields.

While unveiling a Rs 40,000 ccrore planto develop new fields in the KG Basin last month, RIL chairman Mukesh Ambani said he expected a fair outcome in arbitration cases.