The Hindu Business Line : Volcker report: Reliance says it paid no surcharge for Iraqi crude

RELIANCE Industries Ltd (RIL) on Wednesday said the Volcker Committee report had stated that no payment of any surcharge was paid or committed to anybody by the company.

In respect of allocations by State Oil Marketing Organization (SOMO) of the Government Iraq under the Oil-for-Food arrangement of United Nations, no payment of any surcharge was paid or committed by RIL to anybody, the company said referring to the Volcker report.

RIL has been buying various grades of crude oil for its Jamnagar Refinery 1999 onwards. One of the crude purchased and processed by RIL between 2000 and 2003 included Basrah Light Crude Oil, an Iraqi crude that was at the time sold by SOMO. Only UN-registered parties were able to buy crude from Iraq and Reliance Petroleum Ltd (since then merged with RIL) had registered itself with UN for buying Iraqi crude.

The Oil Overseers, under Security Council Resolution 986 (1995) of United Nations, had confirmed registration of Reliance Petroleum Ltd as national oil purchaser.

Between April 2000 and May 2002, Reliance bought 30.6 million barrels of Basrah Light Crude from various trading companies on a negotiated, market competitive price based on declared `official selling prices' approved by the UN, the company release said.

UN authorisation documents with complete audit were submitted in each case to Customs authorities prior to clearing the cargo as required by the prevailing regulations. All payments made by Reliance were through normal banking channels to the account of the relevant trading parties and no other payments of any kind were involved, the release said.

"In each case, a representation was made to Reliance that the allocation was in accordance with UN's Oil-for-Food Resolution 986 and did not involve payment of any surcharge," the company said.

RIL also got direct allocation from SOMO in 1992. Under this allocation, RIL bought 2.8 million barrels of Basrah Light Crude Oil directly from SOMO, all payments having been made to a designated UN escrow account through letters of credit and no surcharges were paid, a fact, clearly reflected in Volcker Committee report itself.

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