Mumbai– American offshore contract drilling service provider Transocean on Monday said that the Mukesh Ambani-led Reliance Industries Limited (RIL) has terminated before time its contract for the use of its ‘Discoverer India’ ultra-deepwater drillship effective December 2016.

“Reliance Industries Ltd. has elected to exercise its contractual option to terminate the contract for ultra-deepwater drillship Discoverer India, effective December 2016, prior to its expiration in Jaunary 2021,” Transocean said in a press release.

“In accordance with contract, Transocean will be compensated by Reliance and its partners for early termination through a lump sum payment of approximately $160 million,” it said.

According to the company, it specialises in technically demanding segments of the offshore drilling sector “with a particular focus on deepwater and harsh environment drilling services”.

Meanwhile, on the back of a major fall in global prices, the Indian government last week cut the price to be paid to producers of natural gas by 18 per cent to $2.5 per million British thermal unit (mbtu).

This is the fourth reduction in 18 months as per the new gas pricing formula approved in October 2014. Gas prices are to be revised every six months and the next change is due on April 1.

The Petroleum Ministry also announced a sharp reduction in cap price for undeveloped gas finds in difficult zones like deep-sea, high-temperature, high-pressure areas which are unviable to develop as per the existing pricing formula.

The cap for October 1, 2016 to March 31, 2017, for gas from difficult areas will be $5.3 per mbtu, down from $6.61 in the preceding six-month period ending on Friday, the PPAC notification said.

Under the new pricing formula, rates are calculated by using prevailing price in gas surplus nations like the US, Russia and Canada.