‘Oil Min’s interference reason for NELP flop’ | delhi | Hindustan Times
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‘Oil Min’s interference reason for NELP flop’

delhi Updated: Oct 12, 2009 22:00 IST

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The Anil Dhirubhai Ambani Group (ADAG) on Monday said the Oil Ministry’s interference in marketing and pricing dampened investor interest in India’s auction of oil and gas blocks and its chairman had warned the Prime Minister about the same.

“Petroleum ministry’s open interference by curtailing marketing and pricing freedom is the single biggest reason for lack of international investor interest,” an ADAG spokesperson said, quoting from a letter Anil Ambani had written to Prime Minister Manmohan Singh on October 9.

The company said Anil Ambani had forewarned that poor response, if at all, would be due to changes in the production sharing contract (PSC) by the petroleum ministry and not because of the dispute between RIL and RNRL.

“Contrary to PSC provisions requiring government to determine the valuation price for determining it’s take, royalty, etc, the oil ministry now says that the government has the right to decide the selling price of natural gas,” the spokesperson added.

The company also claimed that global energy majors were concerned about the petroleum ministry’s recent actions on the gas pricing front, as this virtually amounts to “backdoor nationalisation” of the pricing and utilisation mechanism.

“The oil ministry either whittled down or simply withdrawn many of the key pricing and marketing rights originally granted to the contractor,” an ADAG statement said.