New Delhi: Reliance Industries on Thursday said
people who do not understand project execution of deep sea gas
field magnitude are making allegations for political reasons
to undermine a great project.
"They are attributing all kinds of motives, saying that
we are not producing gas and creating artificial shortages, it
really hurts me to hear all this. I know people want to say
all this for political reasons, but why undermine a great
project for the country... a project that the world is proud
of," RIL Executive Director and head of Oil & Gas Business P M
S Prasad said in an interview to a private television channel.
Anil Ambani Group has accused RIL of artifically
inflating the cost of developing the gas fields, hoarding and
pricing the fuel too high.
"We think we have done our job in bringing this project
on stream in a very short time... and at a very competitive
cost. The world is patting us on the back," he told NDTV.
In a point-by-point rebuttal to ADAG's charges, Prasad
said the allegations of having spent Rs 45,000 crore on KG-D6
fields were incorrect. "That will be the cost that will be
ultimately spent, when the project runs through its life. This
project as per the development plan has a life of 11-12 years.
What we have spent till now is around Rs 35,000 crore."
He said the USD 2.4 billion previous cost estimate was
based on 2003 prices and since then drilling rig rates and
services have gone up 3-4 times while commodities like steel
and fabricated equipment and services have seen a cost
escalation of 60-100 per cent, necessitating the revision in
the cost.
Globally such projects cost USD 6 to 9 per barrel of oil
equivalent produced, but KG-D6 cost is under USD 5 per barrel,
Prasad said, adding that he would accept accusations of 'gold-
plating' only if experts from the likes of Chevron, Exxon
Mobil and BP say but not from "the self-appointed messiahs who
call themselves experts."
"I can't stop anybody who doesn't understand the project
execution of this magnitude or those who don't have knowledge
of the upstream industry and the difficulties we face in
executing mega projects. They can say anything. But I am proud
and my team is proud and the whole exploration and production
industry in the world acknowledges that we have done a good
job," he said.
Prasad said RIL can produce 60 million standard cubic
meters per day but was doing about 36 mmscmd as Government has
not identified customers for quantities beyond 40 mmscmd. Even
out of the customers identified, state-run NTPC has not signed
the contract while Dabhol and Essar Power have signed but is
not taking the gas.
Output is being targeted to be ramped up to 80 mmscmd by
year end.
On the USD 4.2 per mmBtu price fixed for KG-D6, he said
Cairn's Ravva field in the same Krishna Godavari basin is sold
at USD 4.3 per mmBtu. Panna/Mukta and Tapti field gas is sold
at USD 5.7 per mmBtu. "You need to price it fair and I believe
4 dollars is a fair price."
Bureau Report
First Published: Thursday, August 27, 2009, 22:29