New Delhi: Criticizing the government for "keeping quiet" for long on the Ambani MoU that provides for dividing a national resource, former Oil Minister Ram Naik on Thursday said the ministry should have made a stronger case in the Bombay High Court to protect its policy.
Naik, the architect of the landmark New Exploration
Licensing Policy (NELP) that opened up oil and gas hunt to
private and foreign investments, said that private family
pacts cannot override national priorities for use of gas.
"I am very surprised that the Petroleum Ministry kept
quiet for such a long time. They should have intervened
effectively in the Bombay High Court itself," Naik said.
The High Court first heard the dispute between the firms
run by brothers Mukesh and Anil Ambani and it was only after
it gave effect to division of gas from fields-operated by
Reliance Industries that the government moved Supreme Court.
Naik said he had also written to the Prime Minister last
month seeking "his personal indulgence to strongly counter
(transfer of more than one-third of peak output from RIL's
KG-D6 fields to Anil's RNRL at a fixed price for 17 years) and
immediately step in to re-establish the sanctity of the
Production Sharing Contract."
"Allowing a family MoU to distort marketing arrangements
and restrict everyone else's access to gas defeats the very
purpose of (NELP) and the PSCs under which this exploration is
to be done," he wrote.
It was during Naik's tenure that India's most prolific
gas discovery in RIL's KG-D6 block was made, as also the
significant finds in Cairn and ONGC blocks. Bulk of the
investment that flowed in NELP came in areas awarded under his
tenure from 1999 to 2004.
Naik said the Production Sharing Contract (PSC) provides
for the government framing a gas allocation policy and
approving the formula at which the gas has to be sold.
"When the government is the owner of the block and RIL a
lessee to bring out gas, the question to which I do not find
reply is how 28 mmscmd gas can be supplied at a fixed price of
USD 2.34 per mmBtu for 17 years by Mukesh Ambani Group to Anil
Ambani Group without the approval of the government," he said.
Maintaining that NELP remained the most attractive and
fair licensing policy in the world, Naik wrote that for the
first time India had succeeded in attracting huge investments
in the high risk business of exploration in the deep sea.
NELP had helped establish the potential of the Krishna
Godavari basin as one of the most prominent oil and gas rich
basins in the world.
"However, the Ambani controversy has raised a lot of
uncertainty about our current regime for marketing and
regulating gas development which has raised doubts in my
mind," he wrote to the PM.
"The issues at stake are to allocate gas as per priority fixed by the government under its policy in the larger public interest, and the price at which it is to be sold."
Naik said the NELP was initiated by the NDA government, of which he was the petroleum minister. The contract for KG-D6 block, along with other NELP-I PSCs, was signed during his tenure in April 2000.
"Through all my years as Minister for Petroleum and
Natural Gas, I nurtured this policy to make sure that it
remained the most attractive and fair licensing policy in the
world," he said.
NELP has won international recognition and over 70
discoveries have so far been made.
Naik sought the Prime Minister's intervention to stop the
NELP from becoming a "prey to mutually convenient
First Published: Thursday, August 13, 2009, 16:03