CBI closes PE against V K Sibal on KG-D6 gas price issue

After probing the case for three years, CBI has closed a preliminary enquiry against former Director General Hydrocarbons V K Sibal for allegedly colluding with Reliance Industries to jack up KG-D6 gas field cost for lack of evidence.
Mukesh Ambani-led RIL had in 2004 proposed to develop the eastern offshore KG-D6 field at a cost of USD 2.39 billion to produce a peak output of 40 million standard cubic meters per day of gas.
Two years later, it again approached the government seeking permission to amend the plan by raising capex to USD 8.8 billion and indicated a production of 80 mmscmd.

The field has, however, not produced accoding to the plan and the output of gas has plummeted to under 14 mmscmd this month.
CBI, at the instance of the Oil Ministry, had begun the probe in 2009.
During the three years of probe, the available documents were scrutinised by the senior officials of CBI as well as legal experts of the government, after which the decision was taken, official sources said.

CBI had also constituted a team of experts from other ministries as well which went go into the case. An analysis of the global market was also carried out to check the pricing of gas and whether there was any overcharge by the company.

It was alleged that under Sibal, Directorate General of Hydrocarbons, cleared the higher field development cost on the ground that gas reserves as well as the cost of field services had gone up.
This elicited allegations of favouritism from several quarters and objections were raised by the Chief Vigilance Commissioner, after which the oil ministry asked CBI to look into the matter.