Twist in RIL-RNRL gas dispute as oil ministry jumps into fray

Written by Energy Bureau | New Delhi, Sep 29 | Updated: Sep 30 2008, 07:04am hrs
The ongoing legal dispute between the two Ambani brothers over the sale of gas from Mukesh Ambani controlled-Reliance Industries Limiteds eastern offshore gas block-D6 in the KG basin to Anil Ambanis Reliance Natural Resources Limited (RNRL) has taken a new twist. The RIL-RNRL case is coming up for hearing before the Bombay High Court on Tuesday.

Following the controversy which surfaced after the petroleum ministrys counsel, TS Doabia, said in the high court that there was no concluded contract between NTPC and RIL, the ministry had informed the Prime Ministers Office(PMO) on September 18 that the reported statement made by Doabia was not authorised by it. The ministry had held that the statement was neither a part of the brief provided by the oil ministry nor a written submission by the government. The ministry further said that it has directed the counsel to modify the reported statement through an affidavit, which it said, was filed on September 11.

However, the facts seem to be far different from what the petroleum ministry has told the PMO. A letter written by Doabia to DN Narasimha Raju, joint secretary, petroleum ministry (a copy of which is available with FE), clearly says that in response to an email sent by Doabia to the ministry for making available the agreement between RIL and NTPC, the ministry itself had instructed him that there was no concluded contract between NTPC and RIL.

In response to my email sent to the petroleum ministry (asking for making the agreement with NTPC available), I was instructed that there is no concluded agreement and a mere letter of intent was issued. These facts were brought to the notice of the Court, Doabia said in his letter to the petroleum ministry.

Also, while the ministry had stated that it has filed an affidavit before the Court on September 11, retracting the statement made by its counsel, sources said no such affidavit has been filed in the court till date. This clearly weakens the position taken by the petroleum ministry so far.

While production from the D6 block is expected to begin by the end of December or by January 2009, there is a High Court stay on the sale of gas by RIL. Anil Ambanis RNRL claims its right over 28 million standard cubic meter per day of gas from D6, as per a family agreement that split the Dhirubhai Ambani empire into parts owned by Mukesh and Anil. RNRLs claim is disputed by RIL. The Bombay High Court, on a plea of RNRL, had stayed the sale of gas from D6 to anyone other than RNRL and state power utility, NTPC, to which RIL had bid to sell 12-mmscmd of gas at $2.34 per million British thermal unit (mmBtu) in 2004.