Reliance Industries Ltd.

The Government has imposed an additional penalty of $579 million on Reliance Industries (RIL) for producing less than targeted natural gas from its KG-D6 block. Following the levy of this penalty, the total penalty on RIL for missing the target in four fiscal years beginning April 1, 2010 now stands at a cumulative $2.376 billion.

The penalty is in the form of disallowing costs incurred. Disallowing costs will result in government’s profit share rising by $195 million from 2010-11 to 2013-14.

The gas output from the Dhirubhai-1 and 3 gas field in the eastern offshore KG-D6 block was supposed to be 80 million standard cubic meters per day, but the actual production was only 35.33 mmscmd in 2011-12, 20.88 mmscmd in 2012-13 and 9.77 mmscmd in 2013-14. This year, the output has been only 8.05 mmscmd.