Decision on Ambani dispute critical to gas sale
The sale of the critical natural gas component from Krishna Godavari basin oil field hangs on a Bombay HC decision on the dispute between the Ambani brothers.business Updated: Sep 21, 2008 22:43 IST
The sale of the critical natural gas component from Reliance Industries’ Krishna Godavari basin oil field hangs on a Bombay High Court decision on the dispute between the Ambani brothers.
The court is expected to take up the matter of the sale of gas by Mukesh Ambani’s Reliance Industries (RIL) again on September 30.
“The court would take a decision in the near future,” said PMS Prasad, president, E&P, Reliance Industries. “We just hope the people of the country go for what is right.”
Anil Dhirubhai Ambani Group (ADAG) spokesperson refused to comment on the issue.
The dispute is about an agreement of supply and pricing of natural gas between RIL and ADAG’s Reliance Natural Resources Ltd (RNRL), which will require 40 mmscmd (million metric standard cubic metres per day) of gas that RIL would have to supply at a cost of $2.34 per mmbtu (million metric British thermal unit) for 17 years for all of it power generation needs.
Reliance Industries has objected to the terms and conditions (which include price, duration and quantity) of this gas sales agreement. It has refused to supply gas to ADAG saying that it does not follow the price notified by the government.
ADAG has gone to court seeking directions to force RIL into complying with its portion of the agreement.
Speaking on the price of the crude oil to be supplied to refineries, Prasad said that the company had found that the
market price of crude is different from what the government has decided.
“At this point we are with the government. But we did a market survey, and the price of crude is higher than what the government is willing to pay us,” he said.
The first batch of crude oil produced from the KG basin is going to Hindustan Petroleum’s Kakinada refinery in Andhra Pradesh.
RIL may look at bringing in a partner at some future point for its operations at the KG D6 block. “If we see that there is value for us in form of participation in a foreign oil field, or something similar and if the partner too sees value in us, we may consider a partnership,” said Prasad.
“We can now confidently look forward to production from a series of other fields,” Mukesh Ambani said earlier.