Modi Govt slaps Additional 380 Million Dollar fine to Reliance!

The Centre has slapped an additional penalty of $380 million (around Rs 2,500 crore) on Reliance Industries and its partners for producing less than targeted natural gas from eastern offshore KG-D6 fields.

With this, the total penalty, which is in form of disallowing recovery of cost incurred, for missing the target in five fiscal years beginning April 1, 2010, now stands at a cumulative $2.76 billion.

The Production Sharing Contract (PSC) allows RIL and its partners BP Plc of the UK and Canada’s Niko Resources to deduct all capital and operating expenses from the sale of gas before sharing profit with the government.

Disallowing costs will result in government’s profit share rising.

“Up to financial year 2013-14, the cost recovery proposed to be disallowed was USD 2.376 billion and consequent demand of Government of India share of additional profit petroleum of $195.3 million on cumulative basis.

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