RIL may face over $1 billion penalty for usage of ONGC's migrated gas

Reliance Industries and its partner Canada's Niko Resources may face an over $1 billion penalty over its dispute with ONGC for the usage of the latter's natural gas.

According to a report in The Financial Express, the Directorate General of Hydrocarbons calculated the penalty, which arrived at over $1 billion, after considering the account capital and operational expenditures undertaken by RIL to take out the gas that had migrated to its basin.

The final notice in the matter, some media reports say, may come later this week or, others say, by the end of the month. the Directorate General of Hydrocarbons has submitted its report to the Oil Ministry.

Reliance Industries and ONGC are locked in a dispute over the former's usage of the natural gas that migrated from ONGC's asset.

A panel led by former Delhi High Court chief justice AP Shah constituted to look into the matter, had said that the penalty could either be computed by considering the monetary value of the migrated gas or the profits it earned RIL, after considering the costs and sales figures, according to the report. However, the panel maintained that ONGC could in no capacity make a "tortuous claim" against RIL.

On Tuesday morning, the shares of ONGC were trading at Rs 283.60, down Rs 6.35 or 2.19%, while the shares of Reliance Industries (RIL) were trading at Rs 1,048.95, down Rs 2.25 or 0.21% from their close.

Reliance Industries Limited (RIL)