"Petroleum Minister resorting to delaying tactics to help company"

Seeking immediate compliance with the recommendation of the Directorate General of Hydrocarbons (DGH) for imposing $751 million additional penalty on the Mukesh Ambani-owned Reliance Industries Limited (RIL) for shortfall in production in KG-D6, CPI MP Gurudas Dasgupta on Saturday alleged that the Petroleum Minister was trying to avoid giving notice to the company by using delaying tactics.

“Despite Secretary, Petroleum, Vivek Rae and Joint Secretary [Exploration] Giridhar Aramane, endorsing the report of the DGH to disallow further costs of $751 million for the shortfall during 2012-13, Petroleum Minister Veerappa Moily has chosen to overrule them and decided to refer the matter to the Solicitor-General and the Law Ministry for opinion,” Mr. Dasgupta said in a letter to Prime Minister Manmohan Singh. He sought immediate issue of the penalty notice on RIL for 2012-13.

Mr. Dasgupta said the principle of disallowing cost recovery was established in 2012, before the first notice was issued. This was done with the approval of the then Solicitor-General, the then Law Minister and their advice was accepted by the then Petroleum Minister, Jaipal Reddy.

“The fresh notice is merely a computational exercise, to calculate further amount to be disallowed based on further shortfalls and therefore no legal opinion was required. Unfortunately we are seeing a series of cases, where the Petroleum Minister is repeatedly overruling the senior officers of his Ministry and you [Prime Minister] have also chosen to remain a silent spectator to the entire matter. The reference to the Law Ministry is yet another attempt by the Petroleum Minister to delay and obfuscate issues to give undue benefit to RIL,” he stated in his letter.

Mr. Dasgupta alleged that the Petroleum Secretary ordered that the DGH should take immediate action to disallow $1.8 billion of cost recovery since there was no stay on the matter. He had also accepted the DGH proposal that RIL be asked to remit $114 million to the government within 30 days, as the additional government share of petroleum profit, for disallowing cost recovery. These actions were blocked by the Petroleum Minister on the pretext of seeking legal opinion.

“I urge you to direct the Petroleum Minister to immediately issue a notice to RIL and ask it to remit the money which is fair share of the government,” he said.

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