D6 output artificially low: Anil

Anil Ambani today claimed that gas production from Reliance Industries Ltd's KG D6 block “is artificially being kept at lower levels" owing to lack of demand at the present exorbitant prices of $4.20 at well-head, resulting in astronomical delivered prices of nearly $7 being charged to customers.

In a tele statement after petroleum minister Murli Deora's statement in the House, Anil Ambani said he expected the petroleum ministry to limit its role to interpretation of the production sharing contract (PSC) provisions, and protection of its rights.

“I am grateful for the hon’ble minister’s statement that the government has nothing to do with the private dispute of two industrialists or individuals... This is in line with my request to the Hon’ble Prime Minster for neutrality of the government in our commercial dispute with RIL."

He said this should become visible in the petroleum ministry’s stand in the case before the Supreme Court. “This approach will remove any perception that a biased or partisan approach is being adopted by the petroleum ministry,” he added.  RIL, RNRL and the government have filed special leave petitions in the Supreme Court which is scheduled to hear the dispute on September 1. In response to Deora’s statement that Dadri plant (for which RNRL wants gas) has not yet become operational, Ambani said “this situation has been caused solely by RIL’s mala fide conduct in consistently refusing to provide a bankable gas supply agreement to RNRL and NTPC”.  

Ambani also expressed surprise at Deora’s statement that production from KG D6 block would touch 80 million standard cubic metres a day (mscmd) in a year’s time. “According to reports in June 2009, the petroleum ministry based on certification by Director General of Hydrocarbons has conveyed to the government that the maximum production potential from KG-D6 by June/July 2009 is 80 million cubic meters of gas per day”. He also requested the government and the petroleum ministry to get “an independent and objective re-examination” of “the apparently exorbitant capital expenditure of Rs 45,000 crore claimed by RIL for the KG-D6 production” by bodies like CAG and CVC. This would enhance government revenues under PSC by Rs 30,000 crore.

Ambani also requested a reduction in transportation costs of nearly $1.25 per mscmd being charged by RGTIL, a private company co-owned by RIL’s promoters. He also batted for NTPC by claiming that the government company would be able to prevent losses of Rs 30,000 crore if it gets gas at $2.34 instead of $4.20.