The Indian government has fined Reliance Industries (RIL) and Niko Resources Rs 10,000 crore (US$1.55bn) for pumping gas from a gas field owned by state-owned oil and gas company ONGC in the Krishna Godavari (KG) basin over the last seven years.
In 2014, ONGC filed a suit to the Delhi High Court, complaining that Reliance was pumping gas from its block. According to ONGC, as much as 11.1 bcm of gas migrated from the Godavari-PML and KG-DWN-98/2 blocks owned and operated by ONGC to the adjoining KG-D6 block operated by RIL between 1 April 2009 and 31 March 2015. At prevailing prices, this would correspond to Rs 11,000 crore (US$1.65bn). The companies appointed an US consultant to examine the issue and the government appointed the Shah panel to study the consultant report. The panel concluded that the compensation should go to the government and not to ONGC, the original petitioner in the case and the operator of the two fields.
Reliance and Niko have one month to appeal the case and the companies have announced that this fine was arbitrary.