Petroleum secretary G C Chaturvedi said the arbitration notice grants a time of up to a month to respond and there was no hurry.
A top oil ministry official said it will be "suicidal" to even think of raising prices of diesel, LPG or kerosene just before Parliament is to meet.
Gas output from KG-D6 in the week ended April 1 dropped to 33.89 mmscmd from 34.09 mmscmd in the previous week, according to a status report filed by the company with the Oil Ministry.
Reliance from 0600 hours today began complying with an oil ministry order asking it to first supply gas produced from eastern offshore KG-D6 fields to priority users -- urea making fertiliser plants, electricity generation houses, LPG extraction units and city gas distribution firms.
It remains to be seen if the government will concede to the demand of oil companies just before the winter session of Parliament.
Citing the May, 2010, Supreme Court ruling that upheld the government's right to frame gas utilisation policy, the ministry last week wrote to Reliance directing it to first supply natural gas from its KG-D6 fields to priority sectors like fertiliser and power, official sources said.
The KG-D6 production is lower than 61.5 mmscmd rate achieved in March, 2010, as a drop in pressure in the wells and increased water ingress has led to a lower per-well gas output.
CAG had said the increase in field cost would mean a lower profit take for the government.
India has asked bulk buyers to pay market rates for diesel since last January and has also been raising the price of subsidised diesel in small amounts every month in an effort to cut its ballooning fuel subsidies.
A CCEA meeting is scheduled for tomorrow but the approval for the Cairn-Vedanta deal is not listed on its agenda so far.
Inputs by the Petroleum Ministry were found among stolen documents.
The ministry has attributed the fall in output to non-fulfilment of RIL's commitment to drill 22 wells in the field.
Refusing to be cowed by pressure being brought on him, Oil Minister S Jaipal Reddy on Friday said the decision for mining group Vedanta Resources' $9.6 billion buyout of Cairn India will be taken by the Cabinet without "sacrificing" on national interest.
Natural gas output from KG-D6 in the week ended June 24 dropped to 30.82 mscmd from 31.57 mmcmd in the beginning of the month, according to a status report filed by the company with the Oil Ministry.
Reliance currently holds 90 per cent interest in KG-D6.
The Appointments Committee of the Cabinet approved appointment of Sarraf, who at present is Managing Director of ONGC's overseas arm, ONGC Videsh Ltd.
Reliance Industries may ask the government for a refund of its investment if it is forced to give up any part of the prolific KG-D6 block as it has spent a huge sum of money on exploration after obtaining necessary permission to retain the entire 7,645-sq km area.
Besides PESB selected chairman designate B Ashok (currently Executive Director retail sales in IOC) having no board experience, the case for extending Butola's service is more compelling because all the other six directors on board of the nation's largest oil firm are retiring in next one year.
Reliance Industries will have to provide a bank guarantee of $135 million every quarter to get a higher price for natural gas from April 1 next year.
The output comprised 32.94 mmscmd from the D1 and D3 gas fields and 6.86 mmscmd from the MA oilfield.
A week after the steep hike in petrol prices by Rs 5 a litre, the government on Monday said a ministerial panel is likely to meet in the next few days to take a decision on raising diesel, LPG and kerosene rates.
The government on Thursday approved Rs 20,001 crore in additional cash subsidy to state-owned oil companies to compensate them for selling fuel below cost in 2010-11 fiscal. With this, the government has paid a total of Rs 40,912 crore in subsidy to oil companies in 2010-11 financial year, an oil ministry official said.
A hike in diesel and domestic LPG prices has been deferred for now, but an increase in petrol prices later this week looks imminent.
Non-core sponge iron plants, petrochemicals units and oil refineries have cornered as much as 13.13 million cubic metres per day out of the 60.76 mmscmd of KG-D6 gas allocated.
More than three weeks after it announced the sale of a majority stake in its Indian arm to Vedanta Resources, UK's Cairn Energy Plc has formally applied to the government for approvals, saying it will meet all contractual requirements needed to fructify the deal.
Reliance Industries' eastern offshore KG-D6 oil and gas fields have seen output further dipping to 44.5 million standard cubic metres per day this month.
While previously selling of the marketing business, possibly to another state-owned firm, was being considered, the government is now mulling on hiving off the pipelines into a separate entity and selling off a majority stake in it.
Vedanta had proposed to buy a 51 per cent stake in Cairn India for $9.6 billion in the middle of last year. The Cabinet Committee on Economic Affairs is expected to take up the issue next week.
BP will pay $7.2 billion for 30 per cent stake in exploration blocks.
The government on Monday approved Rs 8,000 crore (Rs 80 billion) in cash subsidy to state-owned fuel retailers to make up for half of the revenues they lost on selling diesel, domestic LPG and kerosene below cost in the third quarter.
Unlike the decontrol of petrol and diesel prices during the National Democratic Alliance regime, when rates were adjusted by oil companies on the 1st and 16th of every month based on average international fuel prices, the oil ministry is treading cautiously this time.
Reliance Industries is ostensibly seeking a 25 per cent increase in the price of natural gas it produces from the eastern offshore Krishna-Godavari Basin after it wrote to the Oil Ministry saying it has customers willing to pay more than the government-approved price.
State-owned oil firms have seen their losses on diesel sales widen to over Rs 6 per litre, even as a ministerial panel meeting on raising prices has not yet been scheduled.
The government has written to market regulator SEBI saying Cairn Energy Plc's deal to sell majority stake in its Indian arm to Vedanta Resources does not yet have its approval, a condition contingent for the $8.48 billion deal to consummate.
Bharat Petroleum Corporation (BPCL) on Tuesday hiked petrol prices by about Rs 2.96 a litre effective midnight tonight, and other state-owned oil companies IOC and HPCL will follow suit on Wednesday.
The Cabinet Committee of Economic Affairs has approved a hike in gas prices from April 2014.
Fuel sales rose to 12.364 million tonnes in May from 11.717 million tonnes a year ago, according to provisional data from the oil ministry in New Delhi.
The near-doubling of gas prices to $8 per million British thermal units that will kick in from next month will accrue to all producers in the country.
Disinvestment secretary Sunil Mitra last month wrote to his counterpart in Petroleum ministry R S Pandey seeking comments on 'public offerings from Government's shareholding' in ONGC and IOC. While government has not allowed IOC and other retailers Bharat Petroleum and Hindustan Petroleum to raise petrol, diesel, domestic LPG and kerosene price in line with the cost, they have not been given the promised compensation.
Oil ministry this week issued written instructions to the billionaire Mukesh Ambani-run firm to make a 'pro-rata' cut in gas supplies to all existing customers if the production from its KG-D6 field cannot support new customers, two sources with direct knowledge of the information have said.
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