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| 'Nothing to do with the dispute of industrialists' | | Murli Deora on natural gas and other national priorities in LS |
| Murli Deora / Aug 09, 2009, 00:21 IST |
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 Sir, 30 years ago I was the Mayor of Bombay. At that time, we had a man called Dr N B Prasad. He was also from Andhra Pradesh. Dr Prasad was the Chairman of ONGC. He came to sign an agreement for supply of gas from Bombay High to the domestic city of Bombay.
Bombay now has domestic gas supply. Only last year, Vilasrao Deshmukh, who is sitting here, inaugurated that supply. It took 31 years for a Memorandum of Understanding (MoU) to be signed between the then Mayor of Bombay and Dr N B Prasad to be implemented and get the gas in reality.
Today also, Bombay High is producing 26 million tons of oil. After Bombay High, there is an extra production of only six-seven million tons, that is 31-32 million tons, which is the total indigenous production of our country. We are importing 75 per cent of oil. We must make some schemes or projects, and we should see to it that this oil or gas which is there in the oil-fields or in the gas fields is explored; (and) it comes out.
That is why the government started a programme called 'NELP' (National Exploration and Licensing Policy). More than 50 per cent of the total gas produced in India may come from Andhra Pradesh, and if we keep on saying that 'this is belonging to him', 'that is belonging to him', 'this fellow is in this pocket', 'this fellow is in another pocket', I do not think we will do any service to anybody.
Sir, under Article 297 of the Constitution, the mineral resources of the country are owned by the government. Since, E&P (exploration and production) business is a highly risky business involving high level of technology and capital, and to attract investments in the E&P sector, the government approved the NELP Policy in 1997 to create a competitive and efficient regime-based system for awarding of blocks under international competitive bidding.
E&P is a very risky venture, especially in deepwater areas and frontier basins, which require appropriate returns to encourage the companies. Such returns are assured under PSC (Production Sharing Contract).
Sir, the price of $4.20 at a crude price of $60 per barrel is a formula approved by the EGoM (Empowered Group of Ministers). The formula was also subject to scrutiny by the Committee of Secretaries and the Prime Minister's Economic Advisory Council.
It must also be noted that the contractor has made no proposal on the price formula for determining the pricing of supply of gas to be made to NTPC, which is required under the PSC. This process, not having been undertaken, EGoM's approved price is applicable. As regards the court, some honourable Members raised some points.
The final order of 15 June 2009 of the Division Bench of the honourable Bombay High Court has implications on the government's rights to formulate and implement the Gas Utilisation Policy under the PSC. The MoU, as per the judgement, provides that 12 mmscmd (million metric standard cubic metres a day) will be given to NTPC, 28 mmscmd will be given to RNRL and the remaining, at the option of ADAG, will be shared between RIL and RNRL in the ratio of 60:40.
Under the circumstances, it was necessary to file an SLP (Special Leave Petition) in the honourable Supreme Court and, accordingly, action has been taken. I would like to dwell further on the subject but since the matter is sub judice, it prohibits me from speaking on this.
We have nothing to do with the private dispute of two industries or industrialists. I repeat, we have nothing to do with the private dispute of the two industrialists or industries.
Excerpts from the reply of Union Minister of Petroleum and Natural Gas Murli Deora to a Calling Attention motion to the availability of natural gas for power generation and other national priorities at affordable prices throughout the country in the Rajya Sabha on 6 August, 2009
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