Communist Party of India (CPI) MP, Gurudas Dasgupta on Monday wrote to Prime Minister Manmohan Singh pointing to fresh attempts by the Petroleum and Natural Gas Ministry allowing Mukesh Ambani owned Reliance Industries Limited (RIL) to get away on “technical grounds” from paying $4.2 mbtu for the shortfall in quantity of gas it had contracted to produce from the KG D6 block but failed to deliver on the promise.
In his letter to Dr. Singh, the CPI MP has alleged that a new note was being circulated in the Petroleum Ministry to the effect that RIL should not get revised price on gas till the reasons for the shortfall in the output from KG D6 are ascertained. However, the catch in the note is that the Ministry has proposed that if it (Petroleum Ministry) reaches the conclusion that the fall was due to geological difficulties, then they would be allowed the benefit of the price increase to RIL. The Finance Ministry had asked the Petroleum Ministry to examine the issue of pricing the shortfall in gas production from KG D6 at the old rate of $4.2 mbtu but the Petroleum Minister had categorically rejected the suggestion.
“The formulation of this note has again exposed the duplicity of the Petroleum Ministry and the Minister itself. The Government has consistently rejected the contention of RIL that the shortfall is due to geological difficulty. The Director General of Hydrocarbons (DGH) had written seven letters between December 2010 to April 2011 pointing out the lapses on part of RIL and rejecting its contention of geological uncertainty. The management committee meeting on April 17, 2011 had again reiterated this point. The same conclusion was reached by one man expert committee of Dr. P. Gopalakrishnan, who submitted his report to the Ministry in April 2011. The Petroleum Ministry in Parliament, on several occasions, has rejected the claim of RIL regarding geological uncertainty,” he stated.
“Trying to re-open this issue, which had been conclusively settled by the previous Petroleum Minister, is a thinly disguised attempt to dilute the earlier stand of the government that the present Petroleum Minister has deliberately stalled the arbitration proceedings for the recovery of penalty of $1.5 billion. By trying to reverse the earlier view of the government, the Minister is trying to weaken the arbitration proceedings and give an alibi to RIL to get away with its grave breach of the production sharing contract (PSC). The Petroleum Minister has not bothered to consult important stakeholders like Fertilizers and Power Ministries which further shows the malafides behind the move,” he added.
“I would request the government to insist that RIL supply the shortfall quantity at the old rates to ensure that their sinister design of deliberately reducing production does not result in windfall profits for them. I earnestly reiterate that the government should insist that RIL supply the shortfall in gas production at old rates. I would also request the government reconsider the decision to raise the prices of natural gas and keep it in abeyance until these issues are openly debated with all the stakeholders,” the letter concludes.
