India claims $1.55 billion for natural gas migration to KG-D6 block

Partners in the deepwater KG-D6 block off the southeast coast of India say the Indian government is seeking about $1.55 billion for natural gas said to have migrated from neighboring blocks.

Reliance Industries Ltd., BP PLC, and Niko Resources Ltd. received a communication from India’s Ministry of Petroleum and Natural Gas late last week. RIL has 60% in the block, BP 30%, and Niko 10%.

Reliance, the operator, said it has worked within the boundaries of the KG-D6 block and has complied with all applicable regulations and provisions of the production-sharing contract (OGJ Online, July 1, 2013).

RIL said the claim by the government “is based on misreading and misinterpretation of key elements of the PSC” and is without precedent in the industry. The company proposes to invoke the dispute resolution mechanism in the PSC and issue a notice of arbitration to the government.

Niko said it believes the group is not liable for the amount claimed by the government of India.

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