OilMin not to let RIL sign MoU with ADAG

Last Updated: Monday, July 20, 2009 - 17:59

New Delhi: The government has not let
Reliance Industries off the hook for signing a private MoU
with a firm run by Anil Ambani Group to divide entire gas
volumes from KG basin fields, thus holding industrial
development to ransom, the Petroleum Ministry said on Monday.

"We for the first time got to know from the Bombay High
Court judgment (of last month) that all volumes beyond 28
mmscmd committed to (Anil Ambani`s) RNRL and 12 mmscmd to NTPC
were divided between RIL and RNRL in 60:40 ratio," Petroleum
Secretary R S Pandey told reporters here.

Peak gas out from KG-D6 fields may be 100-120 million
standard cubic meters per day.

"The MoU also states that they are free to price the
volumes beyond those locked in litigations. So practically,
RIL may transfer KG-D6 gas for use in its refineries and
petrochemical plants at USD 1 per mmbtu," he said.

Other industries will be dependent on the mercy of RIL
and RNRL to get the scarce fuel, he said, adding that the
government filed a petition in Supreme Court to get the MoU
declared null and void to prevent such appropriation of
natural resource through private agreements.

"We have so far not taken any action against RIL as it
has so far not done anything in contravention to the gas
pricing and utilisation policy as derived from Production
Sharing Contract," Pandey said. "I cannot today say that no
action will be taken."

The Production Sharing Contract clearly says that
Government will frame a gas utilisation policy and approve
pricing, Pandey said.

"There is a separate chapter in the PSC on gas. For crude
oil production that is not the case. RIL can use the oil it
produces at its refineries as the transfer price will be the
prevalent international rates. But for gas that is not the
case," he said.

The government, he said, had recently rejected RIL`s plea
for using KG-D6 gas at its refineries and petrochemical plants
saying gas to them would be considered when allocation to
refinery and petrochemical sector is considered.

"If such private MoU comes into effect, other contractors
may also frame such MoUs and appropriate the national assets
among themselves," he said. "The government role is not
restricted to collected royalty and profit petroleum. Our role
is also to see equitable industrial development."

Pandey said the government felt the need to file a
Special Leave Petition only after learning of the full
implication of the family MoU from the Bombay High Court
judgment.

Bureau Report



First Published: Monday, July 20, 2009 - 17:59

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