Mukesh Ambani owned Reliance Industries Limited’s ambitious 15-billion-dollar deal with Saudi Arabia’s oil giant Aramco is facing tough objections from the Government of India. According to highly placed officials, the Indian Government has taken a tough stand on Reliance selling a 20 percent stake to Aramco citing Ambani firm’s 4.5 billion Dollar arbitration award case with Government in another oil contract in Panna-Mukti/ Tapti production sharing contract. The government of India has already approached Delhi High Court to restrain Mukesh Ambani from offering 20 percent of its stake and bagging a 15 Billion Dollar deal Saudi’s Aramco.
This is going to put Mukesh Ambani in a tough situation in the coming days… Though he had earlier bagged a similar international deal in 2013 during the controversies in Krishna-Godavari (KG) Basin oil production. Those days in 2013, though many controversies started, Reliance bagged the deal with British Petroleum (BP) of Rs.35000 crores (around six billion dollars at that time) as the Government of India preferred to go soft on the various allegations in KG Basin oil production.
RIL termed Government of India’s affidavit in Delhi High Court for restraining the 15 Billion Dollar (Rs. 1.05 Lakh Crore) deal as a “premature attempt” to enforce non-payment of International Arbitration award of 4.5 Billion Dollars in Panna-Mukti/ Tapti oil production sharing. According to ‘Arabian Business and Industries’, the crux of the dispute between India’s Petroleum Ministry and the three partners – RIL, BG, and the state-owned Oil and Natural Gas Corporation (ONGC) – in the PMT joint venture, is over the amount of profits to be shared by the JV as per the production sharing contracts (PSC) for the three oil fields.
The liability is to be shared by the companies in proportion to their interests in the Panna-Mukta and Tapti oil and gas fields in the Arabian Sea, which is on a 30-30-40 basis among RIL, BG(British Gas) and ONGC. Last year, India’s oil ministry ordered that Reliance Industries, Royal Dutch Shell and ONGC pay $3.8bn as the increased share of the government’s earnings from PMT after a UK court rejected the challenges to the arbitration award that went against the companies.
Now that the Government of India has placed the Reliance’s International Arbitration case in Panna-Mukta/Tapti production sharing case and Saudi Aramco deal in front of Delhi High Court, Mukesh Ambani is expected to face many hurdles in the coming days. Another question that looms is whether the Government of India will take note of private firms extracting huge revenues from India’s natural resources by making bumper bonanza deals with foreign companies. At the end of the day, the question is India’s natural resources belong to the Government of India and not with the buccaneers and foreign firms as per the Presidential Reference of Supreme Court in 2012 on the utilisation and ownership of all natural resources.