Thaindian News

New Delhi, Aug 21 (IANS) The petroleum ministry Friday said it will protect the interest of state power utility NTPC in its ongoing dispute over supply of gas from the Krishna-Godavari fields awarded to Mukesh Ambani-led Reliance Industries.
“It has been alleged that the ministry of petroleum and natural gas is seeking to cause loss to NTPC. It is stated that the ministry of petroleum and natural gas is committed to protect the interests of NTPC by all means,” the ministry said in a statement issued here.

The ministry also defended the substantial increase in the capital expenditure of the oil field from $2.45 billion to $8.83 billion, though the production capacity was estimated to have just doubled from the earlier 40 million units of gas per day.

“It may be noted that the figures are only estimates and cost recovery would depend on actual audited expenditure figures,” it said, adding, “The government of India is committed to upholding the rule of law. It cannot enter into needless and unnecessary controversies.”

It went on to add: “An allegation has been made that in the contract of KG-D6 project, the government would get only Rs.500 crore as against the contractor’s stake of Rs.50,000 crore. This allegation is incorrect. The government expects to, in fact, realise about Rs.84,000 crore.”

According to the statement, the fixation of price and allocation of gas was undertaken after a decision by an Empowered Group of Ministers, and that the price formula was based in accordance with the provisions of the production sharing contract (PSC).

It said the formula of $4.2 per unit as opposed to $2.34 - which the firms of the two Ambani brothers had agreed upon - was approved September 2007 based on the prevailing crude prices.

The statement came against the backdrop of various charges of omission and commission levelled by Anil Ambani’s Reliance Natural Resources Ltd (RNRL) and ongoing advertising campaign launched in newspapers.

Referring to the advertisements, the ministry said, “The government is of the view that such an advertisement campaign on the eve of the hearing in the Supreme Court is most unfortunate.”

The statement followed a meeting of a panel of ministers Thursday comprising Finance Minister Pranab Mukherjee, Petroleum Minister Murli Deora, Law Minister Veerappa Moily and Power Minister Sushilkumar Shinde.

The panel was set up by Prime Minister Manmohan Singh after criticisms that different ministries had divergent positions on the subject that is embroiled in legal disputes in the Bombay High Court and the Supreme Court.

While the Bombay High Court is hearing the dispute between Reliance Industries and the state-run power utility NTPC, the apex court is adjudicating on the dispute between the Mukesh Ambani firm and RNRL.

“We will try to see that the government is one on the issues,” Moily had told reporters late Thursday.

– Indo-Asian News Service

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