The Directorate General of Hydrocarbons (DGH) has suggested encouraging conciliation proceedings and timely appointment of arbitrators by the Government. This is to minimise cases of arbitration in the oil and gas sector, Minister of State (Independent Charge) for Petroleum and Natural Gas, Dharmendra Pradhan, informed the Rajya Sabha on Wednesday.

He said that DGH has also recommended delegating powers to the upstream technical arm of the Government for creating its own panel of law firms, prior examination by multi-disciplinary team, and executive committee of DGH on potential litigations. 

“Prompt actions are being taken in all the cases by Government for early resolution as per the provision of the production sharing contract,” said Pradhan. 

He added that the Government has recently come out with a policy framework for relaxation, extensions and clarifications at the development and production stage under the PSC regime.

The Minister said that there are nine cases pending with arbitrators which include four with Reliance Industries Ltd, and one each with Videocon Industries, Assam Company India Ltd, Hindustan Oil & Exploration Company, NIKO Resources and Cairn Energy. 

Responding to another question Pradhan said 21 arbitration cases have been initiated with regards to the production sharing contracts in the last 15 years of which five cases were during the period 2001-2005, 6 cases in 2006-2010 and 10 cases in 2011-2015.

Meanwhile, the Minister also stated that the Expenditure Finance Committee, in its meeting held on January 20, has recommended an amount of ₹ 2,500 crore for filling the crude in Visakhapatnam cavern and ₹ 2,448 crore has been approved for filling strategic part of caverns being constructed at Mangalore and Padur.

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