Oil ministry orders RIL, Shell and ONGC to pay $3.8 bn as increased share of government’s earnings from PMT fields
Oil ministry has ordered Reliance Industries, Royal Dutch Shell and Oil & Natural Gas Corp. to pay $3.8 bn as the increased share of the government’s earnings from the Panna-Mukta and Tapti fields after a UK court rejected challenges to the arbitration award that went against the companies.
The liability is to be shared by the companies in proportion to their interests in the oil and gas fields in the Arabian Sea – ONGC (40%), RIL (30%) and Shell (30%).
Why is this important
Although RIL expects the payment at this stage to be premature, however if it materialises, it will have a negative impact on the companies.
Stocks to be impacted
RIL (CMP Rs. 916, MCap: Rs. 5,79,950 crs, FY2020 PE: 12.2), ONGC (CMP Rs. 170, MCap: Rs. 2,18,421 crs, FY2020 PE: 7.7)