MUMBAI: Reliance Industries Ltd. (RIL) on Friday stated that it would renegotiate the gas supply agreements with RNRL in the manner and within the timeframe stipulated by the Supreme Court.
“The judgment recognises the dominant role of the provisions of the Production Sharing Contract and has upheld the policies formulated by the Government under which it has the authority to regulate the production and distribution of natural gas,” RIL stated in a press release.
The judgment has defined the extent of marketing freedom that RIL enjoys in the area of sale of natural gas produced.
In view of the findings of the judgment, RIL can sell gas only at the price approved by the government and only to the entities which have been allocated gas under the Gas Utilisation Policy.
RIL has no ability to deviate from price, quantity and tenure as determined under government's policies, or to discriminate among various consumers.
Issues set at rest
“The judgment of the Supreme Court has set at rest numerous issues which had been raised in relation to the gas discovered and produced by RIL from the KG D6 field. RIL sincerely hopes that the clarity of findings of the judgment brings to a permanent closure the incessant distortion of facts and malicious allegations which were being levelled against the government's policies of regulating and developing the natural gas sector for the greater good of the people of India and in the interest of nation's energy security.”
RIL stated that the Supreme Court has, inter-alia, held that: MoU among the family of the promoters does not bind the corporate entity RIL; the terms of the PSC shall have an over-riding effect; the parties must restrict their negotiations within the conditions of the government policy, as reflected inter alia by the Gas Utilisation Policy and EGoM decisions. While the MoU may be kept in mind during the process of renegotiation, it is clearly held that the MoU is not binding.
“RIL has always held that it is bound by the provisions of the PSC and everything else would be subservient to this overriding agreement with the sovereign. The Supreme Court has unambiguously upheld this consistent stand of RIL.”