According to media reports, the union petroleum ministry prefers to weed out contentious issues with Reliance Industries (RIL) through negotiations rather than through legal means.
It may be recalled that both the ministry and the company are locked in a dispute over recovering cost of developing KG-D6 basin from the revenue. RIL resorted to arbitration to resolve this issue.
However, now the oil ministry feels that the ongoing legal dispute with RIL can best be resolved by negotiations. Last year, the ministry blamed RIL for the fall in gas output from the D6 block, although the company attributed the decline to geological uncertainty.
The ministry issued a notice to the company, forcing Reliance to initiate arbitration. RIL said its production sharing contract with the government did not provide for any such penalty. The oil ministry plans to resolve these issues amicably through dialogue.
The Oil Ministry under the charge of Veerappa Moily recently resolved protracted battle between the government and RIL over CAG audit of the block's accounts.
Meanwhile, Moily said his ministry had accepted all the recommendations of the Rangarajan Committee, which proposed a new formula to link natural gas prices with international benchmarks.