RIL slaps arbitration notice over delayed gas price revision

"Overall, the parties (RIL, BP and Niko) were planning to invest USD 8-10 billion in the next few years to significantly increase production from the KG-D6 block," the statement said.

The three partners are already in arbitration with the government over a USD 1.8 billion penalty levied on them for output from the main Dhirubhai-1 and 3 gas fields in the KG-D6 block lagging targets.

The two fields currently produce just over 8 million standard cubic meters per day of gas, a 10th of the 80 mmscmd output that RIL had forecast for this time when it got approval for investment plans for the fields.

The Supreme Court late last month appointed Michael Hudson McHugh, former Judge of the High Court of Australia, as the third and neutral arbitrator for the penalty dispute.

RIL nominated former Chief Justice of India SP Bharucha as its arbitrator while the Centre chose former Chief Justice of India VN Khare as its representative.

It is not clear if the new dispute will be taken up by the same panel of arbitrators.

RIL and its partners said domestic production of gas from new fields is essential to meet India's energy needs and would help conserve foreign exchange, which is now being used to import natural gas.

"All of this requires clarity on pricing," they said in the statement. "The three parties shall endeavour to work with the government to achieve a prompt and efficient resolution of this dispute."

RIL is the operator of the KG-D6 block with a 60 percent interest, while BP holds 30 percent and the remainder is with Niko.