Reliance Industries has introduced anti-bribery and anti-money laundering clauses in the sales agreements it intends to sign with potential users of newer gas from KG-D6 block in the Bay of Bengal.
In the offer document seeking bids for 5 million standard cubic meters per day of natural gas to be produced from R-Series fields in the block from mid-2020, Reliance and its partner BP plc have provided a draft of the Gas Sales and Purchase Agreement (GSPA) to be signed by potential buyers.
The GSPA provides for "immediate termination" of the agreement and recovery of any losses in case of violation of anti-bribery and anti-money laundering clauses.
Reliance and BP sought an undertaking that buyer or its affiliates had not bribed anyone in last five years and none of their directors, officers, or key employees has been convicted or investigated of any offence involving money laundering in last 10 years.
It sought indemnity for the sellers (Reliance and BP) from any loss or damage due to failure of contractors or third parties associated with buyers to comply with bribery and anti-money laundering laws.
The company asked the seller to inform it in writing of any breach of these laws by any of the contractors or third parties to the gas sale agreements.
Reliance and BP are developing three sets of discoveries in KG-D6 block -- R-Cluster, Satellites and MJ by 2022 to add 30-35 million standard cubic metres per day of natural gas production in phases. A similar GSPA is likely for the other two sets of finds as well.
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Reliance, which is the operator of KG-D6 with 60 per cent stake, has so far made 19 gas discoveries in the Bay of Bengal block. Of these, Dhirubhai-1 and 3 (D1 & D3) -- the largest among the lot -- were brought into production from April 2009 and MA, the only oilfield in the block, was put to production in September 2008.
The output from D-1 and D-3 has fallen sharply from 54 million standard cubic metres per day (mmscmd) in March 2010 to 1.3 mmscmd. MA field ceased to produce last year.
BP holds 30 per cent stake in the block while the remaining 10 per cent is with Niko Resources of Canada.
The GSPA's an anti-bribery clause provides that the signatories or their affiliates or associated persons have not engaged any activity to "paying, offering or offering to give, promising or agreeing to give, or authorising the payment (directly or indirectly through any third party) of any monies... to any government official in order to obtain or retain business or to influence official action" in last five years.
Also that the parties have not "directly or indirectly engaged in any other acts or transactions in each case, in violation of or inconsistent with the Bribery Act."
Further, they had not "directly or indirectly engaged in or facilitated any activity which will amount to money laundering, including without limitation, smuggling, terrorism and terrorist financing, conversion, concealment or disguise to make appear as legitimate, or acquisition, possession or use, of any economic advantage or property obtained or suspected to have been obtained from or in connection with any category of offences designated under any applicable anti-money laundering or other applicable Law."