New Delhi : The government plans to impose an additional penalty of $578 million on Reliance Industries for producing less-than-targeted natural gas from its eastern offshore KG-D6 block. The penalty in the form of disallowing costs incurred on the field will be for missing the target in 2013-14, a government source told PTI. With this, the total costs disallowed will increase to $ 2.375 billion. The government had previously issued a notice to RIL disallowing a total of $ 1.797 billion in costs for falling short of production during 2010-11 ($ 457 million), 2011-12 ($ 548 million) and 2012-13 ($ 792 million). RIL, which disputed the levy and initiated arbitration against the government, did not respond to an e-mail seeking comment. “A note is being put to Oil Minister Dharmendra Pradhan for disallowing cost recovery of $ 578 million in 2013-14. A notice will be sent to RIL once he approves it,” he said.
Production from the main gas fields in the KG-D6 block has dropped to about a 10th of the planned 80 million standard cubic meters per day. The fall in output meant that facilities created at huge investment went unutilised.