In a 13-page letter to the oil ministry, the company's counsel A S Dayal & Associates have held the government responsible for the declining gas production from the KG--D6 oil fields. They argued that government had not approved the company's FY13 budget for the KG-D6 budget, which resulted in a fall in production, reported CNBC- TV 18's Nayantara Rai.
Earlier the ministry also struck down RIL's proposal to recover $1.2 billion in costs incurred on the D6 field, saying the company had drilled fewer wells than originally committed. RIL has consistently maintained that the fall in output is due to geological reasons and drilling more wells will not change the situation. It has also said the production sharing contract (PSC) allows it to recover costs irrespective of the level of production.
Gas output from the premier field had dropped from to 62 million standard cubic metres per day in March 2010 to 33.67 mmscmd currently, say sources. Meanwhile, RIL has also said that recovering cost is critical or else the production will fall further. The firm has locked horns with the government since the last 11 months.