OIL & GAS

Shell, RIL win in English HC against govt in PMT oil, gas field dispute

In a big win for Shell and its partner Reliance Industries, the English High Court has rejected Indian government’s challenge to the recovery of certain costs in the western offshore Panna-Mukta and Tapti oil and gas fields they operated.

The government had sought $3.5 billion in dues from Reliance and Shell-owned BG Exploration & Production India Ltd based on an October 2016 partial award of an international arbitration tribunal over the recovery of certain costs from the sale of oil and gas produced from the Panna-Mukta and Tapti fields.

The two firms had gone to the English High Court against the 2016 partial award.

Sources with direct knowledge of the development said the English High Court had previously directed the tribunal to reconsider certain issues. The tribunal subsequently in 2018 issued another award to uphold the two companies right to recover costs.

This award was challenged by the government.

Justice Robin Knowles of the English High Court (EHC) delivered a judgement on February 12 rejecting all of Government of India’s five challenges to the 2018 award, sources said.
When contacted, Reliance declined to comment on the issue.

The government had used the 2016 partial award not just to raise a $3.5 billion demand on Reliance and Shell but also sought to block Reliance’s $15 billion deal with Saudi Aramco on grounds that the company owed money to it.

Reliance and Shell had countered the government petition in the Delhi High Court saying ?the petition is an abuse of process as no arbitration award has fixed any final liability of dues on the company. ? Sources said the Arbitration Tribunal adjudicating disputes under the Panna-Mukta and Tapti (PMT) Production Sharing Contracts (PSCs) between BG Exploration & Production India Ltd (Shell) and Reliance with Government of India issued Final Partial Award on October 12, 2016. Parts of the 2016 Award were challenged by the two firms the EHC, and the EHC directed the Arbitration Tribunal to reconsider certain issues.

Arbitration Tribunal reconsidered the issues and on October 1, 2018, gave its Final Partial Award holding that certain costs incurred by two companies were agreed to be cost recoverable by the Government of India.

Source
Business standard
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close