New Delhi: Reliance Industries and its partners BP plc of UK and Canada’s Niko Resources have slapped an arbitration notice on the government seeking implementation of a delayed gas-price rise.
The trio had on May 9 issued a “pre-arbitration notice” saying failure to implement the increase from due date of April 1 is preventing them from sanctioning investments of almost $4 billion this year.
This arbitration notice wasn’t complete as the partners did not name their arbitrator as required for dispute resolution under the Production Sharing Con-tract (PSC), sources privy to the development said.
RIL-BP-Niko on June 17 served a formal arbitration notice naming London-based Sir David Steel as its arbitrator.
The three firms want the government to honour its commitment and implement revised natural gas prices upon expiry of the $4.2 per million British thermal unit rate for their eastern offshore KG-D6 gas fields on March 31, 2014.
While the government had not entertained the May 9 notice, it now has 30 days ie up to July 17, to reply to the Notice of Arbitration (NoA), sources said.
Oil ministry is referred the NoA to the law ministry for opinion, they said adding the options before it are to either deny existence of a dispute or nominate an arbitrator to represent it.
The previous government had notified a new domestic gas pricing formula, but the elections were announced before its implementation. The new government had decided to announce the rates on July 1 but, postponed it by three months to deliberate on the formula.
