Centre seeks court backing to stall Reliance plan to sell stake to Saudi Aramco

Reliance Industries Ltd and its partner, British Gas, handed back the Panna-Mukta oil and gas fields to the government on Saturday at the end of the 25-year production sharing contracts (PSC), while a court in Delhi asked the duo on Friday to disclose their assets on an application brought by the Central Government seeking to recover $4.5 billion (about Rs30,000 crore) in dues on the deal.

The Central Government’s application, which was heard by the Delhi High Court on Friday, seeks to restrain Reliance and BG from disposing off their assets, including Mukesh Ambani’s plan, announced on August 12, to sell a 20 per cent stake in the oil to chemicals business of Reliance Industries to Saudi Aramco for as much as Rs 1.03 lakh crore or roughly $15 billion, a media report said on Saturday.

Reliance and British Gas each held a 30 per cent participatory interest in the joint venture company formed to operate the Panna-Mukta-Tapti oil and gas fields on a 25-year contract.

Oil and Natural Gas Corporation Ltd (ONGC) held a 40 per cent participatory interest in the joint venture.

Reliance and BG said in a statement on Friday that they will hand over the Panna and Mukta oil and gas fields to ONGC, the government’s nominee, on Saturday.

In 2016, the two companies had handed over the Tapti process platform facilities to ONGC after the field ceased production.

The government, in its application, alleged that the two companies failed to honour a $4.5-billion international arbitral award in the production sharing contracts for the oil and gas fields, forcing it to file the application for executing of the award.

The Centre, which has been fighting the arbitration since 2010, alleged that Reliance and British Gas appropriated huge sums of money in violation of the production sharing contracts.

On the basis of the tribunal award, the government drew up a claim for $3.8 billion, excluding interest, which is now estimated at $4.5 billion, including interest, according to the report.

A spokesman for Reliance did not respond to a phone call and text message seeking comment. British Gas could not be reached immediately for comment.

The PMT fields were the first fields in India to be operated under a Joint Operatorship model. The Panna-Mukta fields, off the Mumbai coast, have produced 211 MMBBLs of oil and 1.25 TCF of natural gas since December 1994. In 2019, the average monthly production from the fields was ~10,000 bbls/day of crude oil and 140 mmscf/day of natural gas.

At their peak, Panna-Mukta have contributed nearly 6 per cent of the country’s oil production and almost 7 per cent of its gas production in 2007-08.