937.50 -0.60 (-0.06%)
BSE Oct 24, 2017 09:23
Volume: 30,020
 

Reliance Industries Limited (RIL)    
09 Oct 2017
937.50
-0.06%
Reliance Industries loses arbitration case for failing to stick to oilfield promises click to expand

The government has won a large award in an arbitration case against Reliance Industries(RIL), after RIL had contested the quantum of penalty the government imposed for not finishing a promised ‘work program’ in four oil blocks.

Reliance has already paid the penalty when it was imposed, but was hoping to recover the money. The original penalty considered by the government was approximately $90 million, and a recommendation to reduce it to $26 million was made. It is estimated that RIL paid much more than the recommended amount in fines eventually. 

ET reports that the work program that was at the core of the case, is key for companies to win oil exploratory contracts. It is a commitment made by the company to undertake surveys and exploratory drilling in the oilfields. This commitment helps the government decide which companies win auctioned exploratory blocks.  

Two arbitration cases are still ongoing between RIL and the government, including the case involving Reliance's use of gas from the ONGC oilfields in the KG Basin. Reliance's share price is trending slightly lower, but remains near its year high. 

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