Nearly a year after arbitrators were appointed to decide whether Reliance Industries can be penalised for producing less than target, the arbitration has not yet commenced, the Petroleum Ministry has said.
The government had in May last year disallowed $1.005 billion expense of RIL on the flagging KG-D6 gas fields for not implementing the approved field development plan.
RIL had contested the move saying the Production Sharing Contract does not provide for such a penalty in case of shortfall in production, and slapped an arbitration notice.
The then Oil Minister S Jaipal Reddy had in June 2012 decided to join the arbitration proceedings and appointed former Chief Justice of India Justice V N Khare as the government's arbitrator.
RIL had appointed former Chief Justice of India S P Bharucha but a third neutral referee has not yet been appointed and arbitration yet to commence, the Oil Ministry said in a Chronological Sequence it released yesterday evening to rebut CPI leader Gurudas Dasgupta's allegation of Oil Minister M Veerappa Moily trying to sabotage the arbitration to help RIL.
"Both the arbitrators have not yet selected the Presiding Arbitrator. The Arbitration Proceedings are yet to commence," it said.
The Oil Ministry under Reddy had on May 2, 2012 disallowed $1.005 billion out of the $5.756 billion investment RIL had made on developing Dhirubhai-1 and 3 (D1&D3) gas fields in block KG-DWN-98/3 (KG-D6) as output of 27.52 million standard cubic meters per day was way short of the target of 80