Companies look to file plea at arbitration tribunal
Mumbai : Reliance Industries (RIL), along with Royal Dutch Shell, will move the arbitration tribunal, seeking to increase the cost recovery limit for the Panna-Mukta and Tapti (PMT) oil and gas fields, RIL said in a notice to exchanges on Thursday.
It added that it was entitled to seek an increase in the cost recovery limit under the revenue sharing contract with the government. The Indian conglomerate also said that the government had recently repeated its demand of a $3.8-billion penalty arising out of an arbitral award passed earlier. The government has calculated the penalty amount on its “own purported interpretation” of the final partial award, the company added.
In 2010, RIL and Royal Dutch Shell, earlier known as BG Group, had initiated arbitration against the government over disputes arising over production-sharing contracts for the two fields. In May 2017, the government had raised a demand of $3.8 billion from the companies, citing a “final partial award” of the arbitral tribunal over the sharing of revenue from the oil fields.
The arbitration panel had upheld the government’s view that the profit from the Panna-Mukti and Tapti fields should be calculated after deducting tax of 33 per cent, not 50 per cent in place earlier.
ONGC, which holds 40 per cent stake in the fields, was also directed by the government to shell out the penalty. RIL and Royal Dutch Shell together hold the remaining stake in the fields. However, ONGC is not a party to the arbitration proceedings. RIL and Royal Dutch Shell had moved the English Commercial Court, challenging the final partial award of the tribunal. In May, the court had directed the matter back to the tribunal, which has to decide on the case in three months.
ONGC, Oil India shares tank on windfall oil tax worries
NEW DELHI: Oil stocks tumbled up to 7 per cent on Thursday following reports that the government may levy a windfall tax on oil producers like ONGC as part of a permanent solution it is working on for moderating the spiralling retail prices of petrol and diesel. Shares of ONGC fell by 4.50 per cent to settle at Rs 167.65 on BSE. During the day, it tanked 11.44 per cent to Rs 155.45. Oil India plunged 6.83 per cent to close at Rs 214.80. During the day, it crashed 11.23 per cent to Rs 204.65.