DGH seeks $800-mn cut in RIL costs on KG-D6
In fresh setback to Reliance Industries, oil regulator DGH has recommended shaving off over $800 million from the cost incurred by the company on its...
New Delhi (PTI): In fresh setback to Reliance Industries, oil regulator DGH has recommended shaving off over $800 million from the cost incurred by the company on its flagging eastern offshore KG-D6 fields.The Directorate General of Hydrocarbons (DGH) recommended the reduction in view of production from the fields not matching the projections, sources with direct knowledge of the development said.
RIL in the accounts for 2011-12 submitted to DGH, claimed $4.215 billion as cost that is yet to be recouped from sale of oil and gas from the fields. The company has till date spent $10.05 billion on the block, which it can contractually recover from sale of oil and gas and is obliged to share profits or spoils with the government only after recouping those expenses. Sources said of the $4.215 billion cost that RIL stated was yet to be recovered, DGH made some deductions to put the contract cost that is to be recovered at $3.408 billion.