The Hindu Business Line : ‘Efforts to settle gas supply row with RIL were thwarted’

The ongoing row between the Ambani brothers once again resurfaced in public, at the Annual General Meeting of Reliance Natural Resources Ltd, where the Chairman, Mr. Anil Ambani, told his shareholders that his company had tried to negotiate with Reliance Industries on the gas supply dispute, but that all its efforts were thwarted.

This must be seen in the context of Mr. Mukesh Ambani’s announcement only three days ago that commercial production of oil from Reliance Industries’ D6 block in the KG Basin had commenced.

Currently at 5000 barrels a day, the production will be escalated to 5.5 lakh barrels of oil equivalent (including oil and gas) a day.

Ninety per cent of the production from this block will consist of gas.

Mr. Anil Ambani told shareholders that RIL has been effectively restrained by a Bombay High Court order from selling gas from the KG Basin to third parties (other than to NTPC and RNRL). He ran his shareholders through the basics of the dispute at the core of which is the contracted price of gas from RIL to RNRL and NTPC at $ 2.35 mmbtu.

He said according to the RIL RNRL agreement, RNRL had the right to buy 40 per cent of the gas from all existing and new gas discoveries made by Reliance Industries Ltd..

He also took a dig at the Ministry of Petroleum and Natural Gas which he said did not think it fit to intervene till nearly two years after the case began.

He also said “it causes a considerable amount of surprise when a ministry intervenes in a court to help a private player but scrupulously keeps away when it comes to protecting the rights of a Navratna such as NTPC.” (He was referring to the Ministry filing an affidavit in Court).

He said his company had only approached the Court “following the failure of every attempt at talks and conciliation.”

Mr. Mukesh Ambani had made some potent remarks in his speech on Sunday although there was no explicit reference to anybody. At one point he said: “…That is why I have always dismissed much advertised attention towards financial gamesmanship.”

He also said the efforts of his company had been made “…with internal resources and risk capital. Not with borrowings and collaterals.”