New Delhi: In a big win for the Modi government, Mukesh Ambani led Reliance Industries and BP Plc may seek an end to their arbitration with the Centre to take advantage of the new pricing freedom.
Reliance and BP Plc intend to complete the withdrawal from multiple arbitration proceedings, at least the one dating back to 2011, before they finalise plans to restart developing discoveries in the KG-D6 block off the east coast of India, among other exploration areas they hold, said an agency report on Wednesday.
In March, Cabinet Committee on Economic Affairs (CCEA) decided to grant marketing including pricing freedom for the gas produced from high pressure high temperature, deepwater and ultra deepwater areas.
It is likely to nearly double the gas prices for the companies. However, it does not apply to assets which are under litigation. The new policy can benefit Reliance’s eight discoveries with reserves of 2.53 trillion cubic feet of gas only if they end arbitration proceedings. For this, all three partner companies, RIL, BP and Niko Resources, have to seek approvals of their respective boards.
