India fines Reliance USD 1.55 billion

India

MUMBAI, November 4, 2016 – The Indian government on Friday fined Reliance Industries and its partners BP and Niko Resources USD 1.55 billion for extracting gas belonging to state firm ONGC, international media reported.

According to a report in the Financial Express newspaper, which cited a 2015 study by US-based consultancy DeGolyer and MacNaughton, some 11.1 bcm (392 bcf) of natural gas had migrated from ONGC’s blocks in the Krishna Godavari Basin in the Bay of Bengal to the nearby KG-D6 Block operated by Reliance and its partners since 2009.

Reliance will have 30 days to respond to the penalty notice, a source in the Indian oil ministry told Reuters. BP holds a 30% stake and Niko Resources holds a 10% in the block operated by Reliance.

The news came days after Reliance lost a separate arbitration worth some USD 1 billion against the Indian government and after Reliance posted a Q3 profit decline of some 22.9% year-on-year.

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