December 23, 2019 / 1:28 PM / a month ago

India's Reliance calls government move to enforce arbitration payment 'premature'

MUMBAI (Reuters) - India’s biggest company Reliance Industries Ltd has called a government move to try and force the refinery-to-telecoms behemoth to pay dues from an offshore oil and gas field “premature” with an arbitration process still underway.

FILE PHOTO: A bird flies past a Reliance Industries logo installed on its mart in Ahmedabad, India January 16, 2017. REUTERS/Amit Dave/File Photo

The government and Reliance, along with partner Royal Dutch Shell Plc, are locked in a battle over the Panna-Mukta and Tapti offshore oil and gas field to the west of the country, with the government claiming it is owed revenue from the operators of the block.

On Saturday, local daily the Times of India, citing an affidavit filed in the Delhi High Court, reported that the government in September sought to block the sale of a 20% stake in Reliance’s refinery and petrochemicals business to oil giant Saudi Aramco unless Reliance makes the payments from the offshore field.

Reliance said in a statement on Monday that the government had approached the court prematurely to enforce its claim.

“RIL (Reliance) maintains that except as quantified by the tribunal no amounts can be said to be payable at this stage.”

It declined to comment on any link to the stake sale.

India’s oil ministry did not immediately respond to an email seeking comment.

The sale to Aramco is likely to be worth around $15 billion and one of the biggest foreign investments in India.

State-owned Oil and Natural Gas Corp Ltd is also a joint operator of the offshore block but is not participating in the arbitration.

In its statement, Reliance said that the arbitration is still on-going and has awarded only partial judgments against the companies in the last three years, one in 2016 and one in 2018. None of the judgments have specified a payment amount.

The “2016 Award, in part superseded by 2018 award, cannot be said to have attained finality and attempts to enforce 2016 award are premature,” Reliance said.

Reporting by Promit Mukherjee; Editing by Kirsten Donovan

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