The Ministry for Petroleum & Natural Gas said that the UPA-1 and UPA-II Governments have been consistently protecting the national interest throughout its tenure.

Taking exception to the allegations made by Arvind Kejriwal on Wednesday about Government’s on favouring Reliance Industries for KG-D6 block, the Ministry for Petroleum & Natural Gas came out with a strong rebuttal.

An official statement on Thursday said the Ministry is constrained to note that certain baseless and frivolous allegations with regard to audit and gas pricing have been reported.

It said the system is not influenced or guided by whims and fancies of any individual or group of individuals.

Spelling out the factual position in an almost five-page statement, the Ministry said the UPA-1 and UPA-II Governments have been consistently protecting the national interest throughout its tenure.

Starting with case between the two Ambani brothers’ (RNRL (Anil Ambani) versus RIL (Mukesh Ambani) in the Supreme Court where the Government had defended its rights over the natural resources and its utilisation, the statement also countered latest reports on postponement of a technical meeting with the CAG.

Postponement of technical meeting

On the postponement of a technical meeting with CAG on audit of certain blocks, the statement clarified that the meeting was called at official level to discuss the procedural issues of audit and due to certain administrative inconvenience it was postponed on October 26 (well before the Cabinet re-shuffle). “The postponement of the meeting will in no way affect either the procedure or the content of the audit by CAG,” it stressed.

Regarding apprehensions raised by RIL on second round of CAG audits, the Ministry said “The issues are likely to be finalised in the next few weeks.”

The audit of oil and gas blocks was entrusted to CAG in 2007 and not during 2011-12, the Ministry reiterated.

Gas pricing

On gas pricing, the Ministry said “It is clarified that the Government has taken a consistent stand from 2010 onwards that the revision can not take place earlier than 2014.” Regarding gas production from the block, it clarified that the Ministry’s position has been consistent from 2006 onwards, and it will protect the Government’s revenue by proper and regular monitoring of the expenditure and production.

The statement also laid down the factual position regarding the issues of production and capex. It said the revised Field Development Plan was submitted by RIL in September, 2012, which put the reserves at 3.4 trillion cubic ft and capex at $ 6.2 billion, lower than what was approved in 2006. “This is being examined critically by the Directorate General of Hydrocarbons,” the statement said.

The output has declined substantially. The production was estimated to reach a level of 81 mmscd in 2012, but after peaking at 67 mmscd in 2009-10, it has dropped to 20.5 mmscd today. This has prompted the Government to stop proportionate cost recovery by the contractor, which is under arbitration.

“There is proposal from RIL for permitting an additional expenditure of $ 1 billion which has been agreed by the Managing Committee (DGH) subject to the condition that RIL will accept CAG Audit,” it said.

Finally, on the allegations of favouring RIL, the Ministry said India offers exploration blocks under New Exploration Licensing Policy through an International competitive and transparent bidding system. National Oil Companies, Indian and Foreign companies are required to compete with each other on an equal footing to secure Petroleum Exploration Licences (PELs). The contract is a generic template and not specific to RIL.

(This article was published on November 1, 2012)
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