Govt move to force old gas price for KG-D6 gas illegal: Reliance Industries

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RIL wrote to Moily saying the signed PSC does not bind a contractor to indicative production numbers. Reuters RIL wrote to Moily saying the signed PSC does not bind a contractor to indicative production numbers. Reuters
SummaryRIL wrote to Moily saying the signed PSC does not bind a contractor to indicative production numbers.

gas is violative of the PSC, unfair and prejudicial to the interests of the contractor besides being in breach of the contract," he said.

Prasad said such a move would "shatter investor confidence" and "stifle further private investments in exploration" as companies will see it as government reneging its commitment in a signed contract.

"The NELP (New Exploration Licensing Policy) provided certain assurances to private investors who were invited to risk their capital in the exploration and production business in India - principal among them being 10 per cent cost recovery and freedom to market oil and natural gas in the domestic markets at market prices," Prasad said.

The proposed action of new gas rates not applying to D1/D3 and MA fields from April 1 "run the danger of demolishing the entire legal and contractual edifice of commitments enshrined in teh PSC as well as the terms of NELP offer," he said.

Such a move would "shatter investor confidence and stifle further private investment in exploration and in efforts to revive and sustain the production in challenging fields such as D1&D3," he added.

RIL sought an assurance from Moily that the government would not indulge in acts of discrimination and reneging on its commitments.

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