Reliance, ONGC face $134 mn fine

The Directorate General of Hydrocarbons (DGH) has approached the petroleum and natural gas ministry for the recovery of nearly $134 million from Oil and Natural Gas Corporation (ONGC) and Reliance Industries Ltd (RIL) as damages for not completing the "minimum work" in some oil and gas blocks auctioned to them.

Of this, the money to be recovered from ONGC has been pegged at $107.39 million for six blocks. More recoveries are planned from the public sector oil major, calculations for which will be completed by the DGH and sent to the ministry by September 15.

The recovery from Reliance Industries is pegged at $26.5 million for four blocks. Director-General VK Sibal has approved the move.

When contacted, Sibal said recovery had been initiated according to the provisions of the production-sharing contract. He added that the matter was with the petroleum ministry, and notices would be issued only after due approvals.

The DGH moved the ministry late last week, asking it to approve the recovery amount for the blocks and the issue of notices to the companies.

Both companies had submitted their objections to the action taken by the DGH. Of the five objections raised by Reliance, three were accepted and two rejected. Of ONGC's four objections, two were accepted.