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RIL will have to pay royalty on KG basin gas: Govt

The govt has said RIL will have to pay royalty on natural gas it is producing from KG basin fields.



New Delhi, July 02: The government on Thursday said
Reliance Industries will have to pay royalty on natural gas it
is producing from KG basin fields as per the Production
Sharing Contract (PSC) signed with it.

Minister of State for Petroleum and Natural Gas Jitin
Prasada in a written reply to a question in Lok Sabha cited
PSC as the governing law for deciding on royalty and
government`s share in the oil and gas produced from D6 block.

He, however, did not say if the PSC allowed royalty and
profit sharing only at the selling price decided by the
government.

Profit petroleum or profit share is the entitlement of
the government, as the owner of the resource, from oil and gas
produced from the fields.

Government has set USD 4.20 per million British thermal
unit as the selling price for D6 gas, but the Bombay High
Court last month asked RIL to supply gas to firms run by Anil
Ambani Group at USD 2.34 per mmBtu, 44 per cent lower than the
price fixed by the government.

Prasada did not say if the government will ask RIL to pay
royalty and share profit petroleum at USD 4.20 per mmBtu
despite the company having to sell half of the peak output of
80 million cubic meters per day at lower rates.

"The court case between RIL and (Anil Ambani`s) Reliance
Natural Resources Ltd is a commercial matter between two
companies," he said.

"As far as government take, including royalty, is
concerned, it is government by the PSC signed between the
government and the signatory to the PSC," Prasada said.

"Royalty is to be paid to the government as per PSC
provisions."

Bureau Report

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