Govt shouldn`t have waited for so long on Ambani row: Naik
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Last Updated: Thursday, August 13, 2009, 16:03
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 arrangements."

Bureau Report

First Published: Thursday, August 13, 2009, 16:03

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