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Reliance Industries Ltd and its partners in KG-D6 block are liable to pay an additional $195.34 million to the Centre for the period up to 2013-14 on account of disallowed development costs.
This information was given by the Minister of State (Independent Charge) for Petroleum and Natural Gas, Dharmendra Pradhan, to the Rajya Sabha on Wednesday.
Pradhan said that $2.376 billion of development cost has been disallowed for the contractors (RIL-BP-Niko) of the KG-D6 block due to shortfall in gas production under the approved Addendum to Initial Development Plan.
To another question, Pradhan said that the Kelkar Committee has recommended that production sharing is the preferred contractual model for Indian basins.
Production sharing “The Kelkar Committee has proposed two fiscal regimes, either of which could be deployed,” the Minister told the Rajya Sabha.
One of the suggestions is to have PSC (production-sharing contract) linked to an investment multiple with modified contract administration, including self-certification of costs by the contractors. The other model is a PSC with biddable supernormal profits tax.
The Minister said that the Kelkar Committee has also recommended that the Directorate-General of Hydrocarbons be made an independent regulator for upstream oil and gas and be given quasi-judicial powers with an appellate tribunal.
Pradhan added that the Government has not yet finalised its response to the report of the committee.
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