Thaindian News

New Delhi, Aug 25 (IANS) The Reliance Anil Dhirubhai Ambani Group has asked the oil ministry to appoint an expert panel to revaluate the high capital expenses claimed by Mukesh Ambani-led Reliance Industries for the Krishna-Godavari gas basin.
The group, which is waging a legal battle with Reliance Industries over the gas from the fields at their agreed price of $2.34 per unit, has also sought speedy conclusion of an audit by the Comptroller and Auditor General of India (CAG).

In a letter to Petroleum Secretary R.S. Pandey, the Anil Ambani group said the high capital cost of nearly $9 billion was questioned by numerous officials and government offices, including Cabinet Secretary K.M. Chandrasekhar.

Others who questioned it included the chairman of the Prime Minister’s Economic Advisory Council, C. Rangarajan, the letter said, adding doubts were also raised over the independence of those who approved the capital expenditure.

“It is therefore astonishing that Reliance Industries has chosen to dismiss the opposition by large sections of the government to the apparent inflation in capex as being motivated by vested interests,” the letter said.

The letter went on to add there was no independent verification of capital costs by any agency other than by the management committee, which includes representatives of the contractor — which is Reliance Industries.

“In the interests of transparency and probity, it is requested that the petroleum ministry may kindly ensure the expeditious completion of the CAG audit,” said the letter written by group president A.N. Sethuraman.

“While this full and comprehensive audit is on, the ministry should publicly disclose the CAG’s current findings as well as the identity of other auditors involved in the exercise, if any, and their terms of reference,” it said.

“Considering the independence of earlier experts has been questioned, it is also requested that petroleum ministry may kindly arrange to revalidate the capex of KG D6 block by a reputed international expert with experience in deep water blocks.”

Anil Ambani’s Reliance Natural Resources is fighting a bitter legal battle with Reliance Industries over supplies of gas from the Krishna-Godavari basin at the contracted price of $2.34 per unit.

In June, the Bombay High Court asked Reliance Industries to supply 28 million units of gas from the KG fields to Reliance Natural Resources for 17 years at $2.34 per unit.

But the Mukesh Ambani group challenged the verdict in the Supreme Court, which heard the case July 20 and fixed Sep 1 as the next date of hearing. The court has asked all parties to file their replies on the matter by then.