Reliance Industries and Royal Dutch Shell plan to exit the Panna-Mukta oil fields when their contracts with the government expire this year. This would likely leave the task of managing these depleting fields with state-run Oil & Natural Gas Corporation.
The two companies have conveyed to the government that they don’t want their production-sharing contract for PMT extended beyond December 2019 when the 25-year term ends.
Last year, the oil ministry ordered Reliance, Shell and ONGC to together pay $3.8 billion as the increased share of the government’s earnings from the PMT fields, following an arbitration award in the government’s favour. Reliance and Shell challenged the award in a UK court, which upheld the arbitration panel’s decision on most counts but referred the matter over how much development cost the companies could recover back to the tribunal, which is again hearing it.
Once Reliance and Shell exit, the fields might become more remunerative for ONGC as the shares of the two private companies in the revenue will go away.