Petroleum Ministry's claim erroneous: ADAG

Countering the Petroleum Ministry’s claim that the government would earn Rs 84,000 crore from the sale of natural gas from Reliance Industries' (RIL) KG-D6 fields, the Anil Dhirubhai Ambani Group (ADAG) retorted that the ministry’s estimated revenues were erroneous and it included royalty and corporate taxes.

“This (royalty and corporate taxes) incorrectly inflates the amount of government’s share of profit petroleum as defined in the Production Sharing Contract (PSC),” said J P Chalasani, chief executive of Reliance Power.

Based on the capital expenditure of $8.84 billion and the valuation price for next five years, the government will only get 1 per cent, or Rs 500 crore, while the contractor of KG-D6 fields Reliance Industries (RIL) gets Rs 49,500 crore, Chalasani said.

Th revenue split has been reconfirmed in RIL’s recent letter to the petroleum ministry on payments related to profit petroleum for first quarter 2009-10.

The ministry has now taken up the task of defending RIL’s ‘gold-plated’ capital expenditure upon itself rather than seeking clarification from them in national interests, alleged Chalasani.

Also, he added, the Petroleum Ministry has not addressed the impact of increase in capex on government revenues. “It is significant that Director General of Hydrocarbons (DGH) made a statement that Comptroller and Auditor General (CAG) has audited the expenditure made by RIL, which was later refuted by CAG, who said that it has been waiting for over two years for the data from RIL,” he said.

Chalasani claimed that all facts have been correctly stated in newspaper advertisements issued on behalf of 8 million shareholders of Reliance-ADAG in the public and national interests.

Earlier, the ministry dubbed the media advertisement campaign of ADAG as "most unfortunate", saying it as a propaganda unleashed on a sub-judice matter.

“We trust the Petroleum Ministry will take all steps to ensure that National Thermal Power Corporation (NTPC) gets 12 million standard cubic meters a day (mmscmd) of gas from RIL at a price of $2.34 per million British thermal unit (mBtu) for 17 years for its Kawas and Gandhar expansion Projects,” he added.