NEW DELHI, Nov 4 (Reuters) - India's Reliance Industries Ltd is to contest a $1.55 billion fine imposed by thegovernment on the company and its partners for selling gasbelonging to the blocks of Oil and Natural Gas Corp,Reliance said in a statement.
"RIL proposes to invoke the dispute resolution mechanism inthe production sharing contract and issue a Notice ofArbitration to the Government," the statement said.
India's oil ministry on Friday issued a notice to Relianceand its partners UK-based energy giant BP and Calgary-based Niko Resources Ltd for extracting gas from theadjacent blocks operated by Oil and Natural Gas Corp.
"In carrying out petroleum operations, the contractor hasworked within the boundaries of the block awarded to it and hascomplied with all applicable regulations and provisions of theProduction Sharing Contract," the statement said.
The government's claim is not sustainable, Reliance said.The company said: "The liability of the contractor has not beenestablished by any process known to law and the quantificationof the purported claim is without any basis and arbitrary".
(Reporting by Nidhi Verma. Editing by Jane Merriman)