India rejects $1bn in Reliance expenses

Expenses rejected: facilities in the D6 deep-water field in India's Krishna Godavari basin

The Indian Petroleum and Natural Gas Minister Veerappa Moily said the Indian government has disallowed more than $1 billion of expenses made by operator Reliance Industries on the D6 deep-water fields in the Krishna Godavari basin.

The minister clearly stated that no relaxation was being given to Reliance on disallowing expenses, as it did not implement the approved field development plan.

"Government has not accepted the contention of the contractor (RIL) and have ordered proportionate disallowance of cost of production facilities amounting to $ 1.005 billion for not fully implementing (the) approved development plan," Moily said in a written reply to the Indian parliament.

Reliance has already initiated arbitration on the cost recovery issue, as the operators felt that the government had no right to restrict cost recovery from…

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