Now, AAP alleges Moily favouring Essar

In a fresh salvo at Petroleum Minister Veerappa Moily, the Aam Aadmi Party (AAP) on Wednesday accused him of favouring Ruia-controlled Essar Oil in getting certain oil and gas fields despite non-completion of a bidding process, initiated two decades earlier.

Party leader and Supreme Court lawyer Prashant Bhushan accused Moily of violating the model code of conductby pushing a revised cabinet note treating the allocation of Ratna and R-series oil fields to Essar Oil as concluded, overruling various officials. According to AAP, the reserves are valued at Rs 52,000 crore and would increase substantially after further exploration.

The oil fields, located 90 km south-west of Mumbai, were awarded to Essar Oil and Premier Oil in 1996, but the contract was never signed on several issues, including a dispute over the net worth of Essar and the amount of cess and royalty to be paid.

“The officers of the petroleum ministry, the joint secretary (exploration) and the petroleum secretary, prepared a cabinet note recommending the block should either be re-auctioned or it could be given back to Oil and Natural Gas Corporation on the ground that the contract had not been concluded and also, the fact that the government would lose billions of dollars if it was done,” AAP said in a press statement released on Wednesday. Moily, however, overruled the officials on “dubious grounds”, Bhushan alleged.

Producing various cabinet notes, beginning from 2008, Bhushan said the cabinet secretary had warned of “huge revenue loss for the government and that the contract had not been duly concluded.” The party said the finance secretary had also reiterated this.

The party said, finally, the law minister said, “the administrative ministry may decide the matter upon its own objective, fair and reasonable assessment, keeping public interest in view.” Superseding all this, AAP charged, Moily reverted to his officials saying, “to my mind, the balance view emerging out of the opinions is that the contract should be treated as concluded and the petroleum ministry should decide on the revised offer of the contract about the current rate of royalty and cess… This also means that the gain to the contractor and loss to government revenues shown in the note is, therefore, also based on hypothetical calculations.”

"Even though he admitted that the contract was not signed, he gave a very ambiguous opinion and did not state conclusively whether the contract had been concluded," Bhushan said.