Nodding to government’s interest, the Delhi High Court asked Reliance Industries Ltd (RIL) to reveal its assets before it intends to sell 20 percent of its interest in refining and petrochemicals business to oil goliath Saudi Aramco, reported The Times of India.
The court also ordered British Gas, according to the article, to reveal their assets after the Center tried to prevent them from disposing of the same assets. In the Panna-Mukta and Tapti production sharing contracts, the pair refused to honor their payment under an international arbitration award of $4.5 billion, The Times of India reported citing a government-filed application in September.
The government-possessed Oil and Natural Gas Corporation (ONGC), first uncovered the oil field of Panna-Mukta and the gas field of Tapti near Mumbai. A production-sharing contract (PSC) was then signed on 22 December 1994 with the Enron-RIL alliance, which terminated today.
The agreement itself faced controversy since it was signed, and reports suggested that the Central Bureau of Investigation (CBI) buried the lede amid the possibility of a quid pro quo between private firms involved in bagging the contract and several government decision-makers.
According to the PSC, depending on the expenditure multiple, the Indian government would earn a variable share of income. In December 1994, the sector was dominated by a joint venture between ONGC with 40 per cent of stake and Enron and Reliance had 30 per cent each. Eight years after that, in 2002, British Gas (BG), purchased Enron’s 30 per cent share of the reserves for $350 million.
Nonetheless, if Mukesh Ambani’s RIL succeeds in selling its shares to Saudi Aramco, which owns the world’s second-biggest estimated unprocessed reserves exceeding 270 billion barrels (regardless of a few ongoing attacks on it), the latter could protect RIL against possible crude oil surprises and market uncertainty.
Reliance and its affiliates may need to pay the government the measure of $4.5 billion (over ₹30 thousand crores).
The government has been fighting an arbitration with RIL and its affiliates since 2010, alleging huge sums of money were diverted by the companies. The government also alleged that in the oil and gas fields of Panna-Mukta and Tapti, RIL and its partners breached the production sharing arrangement.