[ By Kavita Krishnan ]The Delhi High Court on December 20, 2019 ordered the oil-to-telecom conglomerate – Reliance Industries Limited (RIL) to disclose its assets. The Government cited non-payment of an international arbitral award to the tune of $ 4.5 billion in the Panna-Mukta and Tapti (PMT) production-sharing contracts which resulted in the court ruling. The development means that...
The Delhi High Court on December 20, 2019 ordered the oil-to-telecom conglomerate – Reliance Industries Limited (RIL) to disclose its assets. The Government cited non-payment of an international arbitral award to the tune of $ 4.5 billion in the Panna-Mukta and Tapti (PMT) production-sharing contracts which resulted in the court ruling.
The development means that the company will have to list all its assets before sealing the 20% stake sale to Saudi Aramco. The stake sale in the refining and petrochemical business was valued at $15 billion.
Amidst the legal battle regarding $ 4.5-billion claim by the Government towards profit and royalty from PMT fields, state-run Oil and Natural Gas Corporation (ONGC) has physically taken over the PMT fields from Reliance Industries (RIL) and Shell.
According to sources, the final phase of the arbitration is scheduled in mid of 2020 and the Government of India has unilaterally made a calculation of an amount they claim to be payable, which is also in dispute. The Government claim was the result of a 2016 award by an English court, which did not mention any monetary sums. According to the companies, except when quantified by the tribunal, no amount can be said to be payable at this stage.
Despite the legal disputes, the operations of the PMT fields were physically handed over to ONGC on December 21, 2019. According to sources, the legal battle was not going to affect PMT transfer as both RIL and Shell were surrendering the blocks and not selling it and moreover the government was taking over the asset. The Delhi High Court direction came after the signing of the transfer agreement.
A source said the arbitration tribunal is likely to hear the application by RIL and Shell regarding an increase in cost recovery limit under the production sharing contract, which if ruled in favor will bring down the Government claims considerably.
RIL and Shell hold 30% each in Panna, Mukta, and Tapti joint venture (JV), while the remaining 40% is owned by ONGC. This was the first field in India to have operated under the joint operatorship model.