Govt breaks its gas row silence | business | Hindustan Times
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Govt breaks its gas row silence

business Updated: Jul 20, 2009 22:56 IST
HT Correspondent

In the three year long dispute for gas between Mukesh and Anil Ambani, one issue remained unanswered: the role of the government. Or why the government — the owner of the gas — kept a Sphinx-like silence all this while.

Breaking this silence, petroleum secretary RS Pandey said, “We were not aware that the two brothers have, under a private agreement, distributed the entire gas to be produced from the Krishna Godavari (KG) D6 gas block between themselves.” He was responding to

allegations that the petroleum ministry was supporting Mukesh in his fight with Anil. Pandey said the government decided to move Supreme Court only after it came to know “for the first time” from the June 15 Bombay High Court judgment that all volumes — beyond 28 mmscmd committed to Reliance Natural Resources Ltd (RNRL) and 12 mmscmd to NTPC —have also been divided between Reliance Industries Ltd (RIL) and RNRL in 60:40 ratio.”

Stating that the “private agreement” was a threat to the country’s industrial development, Pandey said, “We cannot leave the industrial development of the country at their mercy and have contractors of gas fields decide on their own on the utilisation and price of gas.”

He said that if such private agreements are allowed to come into effect, other contractors would also frame similar agreements and start appropriating national assets among themselves. “Is the government role restricted to the collection of mere royalty and profit petroleum,” he asked. “It is also to ensure equitable industrial development.”

Quoting the Ambani family’s June 2005 memorandum of understanding (MoU), Pandey said, “Under the MoU, they are free to price the gas volumes beyond those locked in litigations. So practically, RIL is allowed to transfer KG-D6 gas for use in its own refineries and petrochemical plants at a price say even $1 per unit while giving other companies at a higher price.”