Mukesh Ambani-led Reliance Industries Ltd (RIL) has said the government will earn revenues close to $16.5 billion (Rs 80,635 crore) from the gas discoveries already notified by it in its KG-D6 block, and its own share will be much less.
“The government’s revenues by way of its share in profit petroleum, royalty and income taxes would be about $16.5 billion over the life of the D1 and D3 (the two discoveries already announced) field, based on the approved price of gas (at $4.2 per unit),” P M S Prasad, president of RIL’s petroleum business, said in a letter dated August 27 tp R S Pandey, petroleum secretary.
Against government’s revenue of $16.5 billion RIL’s own net inflow over the life of the field is estimated at $10.7 billion, Prasad said in an apparent attempt to counter allegations levelled by the Reliance ADAG group led by Mukesh’s estranged brother Anil.
But the letter did not explicitly identify ADAG. ADAG has alleged that the government’s decision to approve the price of gas at $4.2 per unit (Rs 205.2 per unit) from the KGD6 block will result in a “windfall profit” of Rs 50,000 crore to RIL, 100 times the government’s share.
Prasad said the government’s share works out to be 61 per cent compared with RIL’s 39 per cent. “These numbers also imply that the cost of production of gas, on a post tax basis, works out to about $ 3 per unit.”