Reliance Industries Ltd (RIL) said on Tuesday that the government was not honouring signed contracts, and hinted that it may be have to resort to arbitration if forced to supply gas at old prices for commitment shortfall of gas.
Responding to questions on a proposed move by the government to ask RIL to sell gas from its main fields in KG-D6 block at old rates of $4.2 per unit, RIL’s executive director, PMS Prasad, said: “We clearly will say it is violation of PSC. So whatever is the dispute resolution mechanism, we will have to resort to,” he said.
Petroleum minister Veerappa Moily was not available for comments.
Prasad also said the lack of stability in the policy regime was responsible for the exit of global energy giants such as British Gas, BHP Billiton, StatOil and Petrobas from India.
He was addressing reporters on the sidelines of a FICCI energy conference on Tuesday. He identified two reasons for the exit of multinational giants: low prospectivity of Indian basins, and fiscal instability.
“You have to compensate poor prospectivity by giving an attractive fiscal regime which we are anyway not giving, and then you take away whatever little was given,” he said. “It is there for everyone to see. We don’t have a stable policy regime which is very essential if you expect any investor to come in and invest either in technology or put in big risk investment required in (oil and gas) exploration, appraisal and development.”