New Delhi: The government has ordered Reliance Industries (RIL), Royal Dutch Shell and Oil and Natural Gas Corp. (ONGC) to pay a penalty of $3 billion following an arbitration award in the Panna Mukta Tapti (PMT) oil field dispute that went in favour of the government, as per the reports.
A demand notice was sent last month by the oil ministry to Reliance and Shell. RIL and Shell own 30% each in the PMT fields, while ONGC holds 40%. Shell is the operator of the field. The three companies have to pay the combined penalty proportionate to their stake in the fields, ET reported.
The arbitration panel had upheld the government view that the profit from the fields should be calculated after deducting the prevailing tax of 33%, and not the 50% rate that existed earlier.
This will significantly increase the government’s share of profit petroleum. However, The RIL, Shell and the oil ministry declined to comment. Shell became the operator of the field last year after taking over BG (formerly British Gas), the original operator of the field.
A decision by the UK court on the appeal by RIL and Shell will determine the future course of action.
The PMT arbitration case is one of the many disputes Reliance is fighting with the government.