RIL-BP may withdraw arbitration proceedings against Centre: Report

The arbitration case involving Reliance Industries (RIL)-BP Plc against the government may see an end, as the companies are said to be considering dropping the case, Mint reported on Monday.

Both the companies are in talks with the government to drop the arbitration, the report added, citing an official from the oil ministry. In fact, they had met oil minister Dharmendra Pradhan in the first week of April, the newspaper reported.

The move will help the companies sell the gas produced from their allotted fields on the free pricing model that was announced in the new gas-pricing policy announced by the Centre on March 11.

“The fact that the consortium is keen to discuss the issue with us indicates its willingness to drop the arbitration relating to government’s power to fix gas price,” a government official told the newspaper.

Meanwhile, the companies have also signalled their intention to invest $10 billion to recover 2.5 trillion cubic feet of gas from deep sea fields. They wish to sell this at the free market pricing mechanism.

The official quoted above told the newspaper that it may take about a year for companies to finalise the field development plan, sign equipment and services contracts and commence work.

“The recent reforms announced by the Government of India will provide the much-needed impetus to the Indian oil and gas industry. Together with our partners, we are working with the government to progress activities in our blocks,” BP said in a statement.

According to the announcement, to avail the new liberal pricing, companies who have filed the arbitration or litigation must conclude or withdraw the same.

Reliance Industries Limited (RIL)