Dasgupta writes to PM, seeks decision on RIL penalty

Communist Party of India leader Gurudas Dasgupta wrote to Prime Minister Manmohan Singh on Friday, asking him to decide on a $2.4-billion penalty on Reliance Industries Ltd (RIL) for “deliberate default” in production from KG-D6.

Dasgupta said the penalty worked out to $2.4 billion this financial year. “It is learnt the Directorate General of Hydrocarbons (DGH) has agreed with my contention and recommended a penalty of $1.8 billion for 2012-13. However, the petroleum ministry has not issued a fresh notice to RIL based on DGH suggestions,” the letter said.

He asked the prime minister not to consider the Cabinet note stating the fall in production in KG-D6 basin was due to geological difficulties, as this would give benefits of the price increase due to the shortfall in gas production to RIL.

Citing an April 2011 report by P Gopalakrishnan, commissioned by the DGH, he said there was no geological uncertainty, as was being said by RIL.

“The GIIP (gas initially in place) in D1-D3 field is adequate to achieve the planned gas rates according to the approved development plan. There is no geological or reservoir constraints to achieve the recommended gas production,” the report had said. He claimed the effort to come up with a new Cabinet note by the oil ministry would give undue benefit to RIL and weaken the government’s case in the arbitration.