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BP, DGH spar over cost of returning KG-D17 block

British oil and gas major BP Plc has locked horns with Directorate General of Hydrocarbons (DGH) over undue charges being sought for surrendering an Andhra offshore block that has been squeezed down to 30 Percent of the auctioned area due to defence restrictions.

The block in question is identified as KG-D17 that Reliance Industries Ltd had won in the government's eighth round of auction. BP was given charge of operations in the block after the company's $7.2-billion deal to acquire 30 Percent in concessions held by RIL.

The dispute has arisen over DGH asking BP to pay costs on account of unfinished 'minimum work programme' (MWP), which runs into millions of dollars. BP has claimed the move contradicts the 'in-principle' agreement reached after several meetings in 2013 among company executives, oil ministry officials and DGH experts.

Source-On Request