Gas row: RIL counters RNRL`s claim on approval of MoU

Last Updated: Friday, November 13, 2009 - 19:59

New Delhi: Mukesh Ambani group firm RIL
on Friday told the Supreme Court that its directors have filed the
affidavits in the gas row to counter Anil Ambani`s contention
that the family MoU was approved by the RIL Board.

RIL said that seven of its directors have filed
counter affidavits to negate the submission made by RNRL that
they had seen the MoU and it was approved by the Board.
Senior advocate Harish Salve, appearing for RIL said
that the MoU was never approved nor was it part of the Board
meeting.

"You (RNRL) withdraw that para from the Special Leave
Petition, we will will withdraw the counter affidavit of seven
directors," he submitted before a Bench comprising Chief
Justice K G Balakrishnan and Justices B Sudershan Reddy and P
Sathasivam.

Salve was responding to the allegations by RNRL`s
counsel Ram Jethmalani that RIL was making submissions on the
points which were not the part of records in the Bombay High
Court.

Jethmalani had said the contents of affidavits filed
by RIL directors were also not the part of record in the High
Court.

To drive home his point, Jethmalani said, "Everything
I argue will be justified by the records before the High
Court".
RNRL in its petition had said that "the existence of
the family MoU has been recorded, accepted and approved by the
RIL board of directors."

The Ambani brothers are locked in a bitter battle
over the supply and price of the gas from KG basin.

While RNRL is seeking gas at a committed price of USD
2.34 per unit, RIL says it cannot honour the commitment made
in the MoU due to government`s pricing and gas policies.

RIL gave a detailed chart to show how profits of the
group and revenue of the government would be hit if the gas
was supplied to RNRL and NTPC at a lesser price than the
approved price.

The RIL counsel said if the entire production of 80
mmscmd was sold at the government approved price of USD 4.2
per mmBtu, then the government share over the period of 13
years will be around USD 8.44 billion against RIL net surplus
of USD 16.28 billion after the cost recovery.

Salve said RIL, which has invested USD 9.41 billion in
the development of KG Basin, will earn a net cash flow of US
dollar 7.95 billion at USD 4.2 per mmBtu over 16 years after
deducting interest and income tax.

However, he said that if the government approved the
gas price at USD 2.34 per mmBtu for the entire produce, the
government`s share will be reduced to USD 1.08 billion, a
reduction of USD 7.36 billion and that of RIL will reduced to
USD 2.43 billion from USD 7.95 billion over this period after
deducting liabilities.

RIL said that it was obliged to make exploration in
the remaining area of the KG Basin from these returns and any
loss in exploration due to dry wells would also have to be
factored in.

Salve said gas being a national resource cannot be
traded purely for private profit and if sold at a lesser price
than the government approved price, then not only the
government`s share would be reduced but power consumers would
also be at a disadvantage.

Bureau Report



First Published: Friday, November 13, 2009 - 19:59

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