Jun 13, 2012, 08.04 AM IST

RIL seeks to claim damages from GoI on KG-D6 output decline

Reliance Industries (RIL) is seeking to claim damages, if the government doesn’t approve of the KG-D6 costs, inform CNBC-TV18 sources.

Source: CNBC-TV18

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Reliance Industries (RIL) is seeking to claim damages, if the government doesnt approve of the KG-D6 costs, inform CNBC--TV18 sources. In a 13--page letter to the oil ministry, the company's counsel A S Dayal & Associates have held the government responsible for the declining gas production from the KG--D6 oil fields.

Earlier the ministry also struck down RIL's proposal to recover $1.2 billion in costs incurred on the D6 field, saying the company had drilled fewer wells than originally committed. And on its part, RIL has consistently maintained that the fall in output is due to geological reasons and drilling more wells will not change the situation. It has also said the production sharing contract (PSC) allows it to recover costs irrespective of the level of production

Gas output from the premier field had dropped from to 62 million standard cubic metres per day in March 2010 to 33.67 mmscmd currently, say sources. for more updates........

It may be recalled that The Comptroller & Auditor General (CAG) has charged the oil ministry with laxity in enforcing contracts with private companies, including RIL, and warned the ministry of the risks involved in approving capital expenditure without an internal audit of the gas field after 2009-10.

Meanwhile, RIL has also said that recovering cost is critical to or else the production will fall further. The firm has locked horns with the government since last year on the issue.