Questions That Beg Answers

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p><p><span class='dropthecap'>R</span>eliance Industries (RIL), owned by Mukesh Ambani, and Reliance Natural Resources (RNRL), owned by his younger brother Anil Ambani, are set for a final showdown as the two companies moved the Supreme Court on Tuesday to help resolve their five-year-old feud on supplying gas at the price agreed upon in the family agreement.</p><p>This tussle between the two brothers has consumed a lot of media space and even Parliament's precious time. Many members of Parliament have sought answers to a host of questions that are directly related to the two warring brothers' business.</p><p>BW brings you some of the questions asked on the floor of the House in the past three years, along with the government's responses. </p><p><strong>For Anil Ambani?</strong></p><p><img style="width: 200px; height: 200px" src="http://www.businessworld.in/bw/image/Personalities/Profiles/anil_ambani_ts_mdm.jpg" alt="Anil Ambani" title="Anil Ambani" width="200" height="200" align="right" /><strong>Question by Swadesh Chakrabortty (CPI-M)</strong><br />Whether the government is considering revision of gas price of Reliance Industries (RIL) as and when the gas is available from KG Basin. Whether RIL has requested the government to raise the gas price at $4.20 per unit; whether Oil and Natural Gas Corporation (ONGC) is supplying gas at a price of $2.2 / unit.</p><p><strong>Answer by Dinsha Patel, minister of state in the ministry of petroleum &amp; natural gas</strong><br />No, sir. No request has been made to the government by RIL to raise the gas price. Under administered price mechanism (APM), gas is being supplied by ONGC to power and fertiliser sectors at Rs 3,200 / thousand standard cubic metres (tscm) and to transport sector and Court mandated small consumers at Rs 3,840 / mscm. In the North East, the supply to the mentioned categories of consumers is at Rs 1,920/mscm and Rs 2,304/mscm respectively. At US$ 1= Rs 45, these prices translate to US$ 1.792/mmbtu, US$ 2.15 / mmbtu, US$1.076/mmbtu and US$ 1.20 / mmbtu, respectively. APM price is not comparable with market determined prices under production sharing contract (PSC).</p><p><strong>Question by Basudeb Acharia (CPI-M)</strong><br />Whether higher prices are being charged by RIL from National Thermal Power Corporation (NTPC) for the gas explored from the blocks awarded to RIL by the Union Government...</p><p><strong>Answer by Dinsha Patel</strong><br />At present, no gas is being sold to National Thermal Power Corporation (NTPC) by RIL. (The) government has formulated New Exploration Licensing Policy (NELP), which promotes investment in exploration, so that adequate oil and gas are available at market determined prices. The natural gas being produced by ONGC and Oil India (OIL) from nomination blocks is sold to power and Fertiliser sector at APM prices... The price of crude oil is to be determined on the basis of the international prices of reference crude oils of similar characteristics and quality to the crude oil in respect of which the price is being determined. The gas price/formula submitted by contractors is required to be approved by (the) government. In case of crude oil, the calculation, basis of calculation and the price determined by the contractor is also subject to agreement by the government.</p><p><strong>Question by Amar Singh (SP)</strong><br />Whether it is a fact that copies of the minutes of meeting of the Empowered Group of Ministers have been sent to private companies like RIL and NIKO...</p><p><strong>Answer by Murli Deora, minister of petroleum &amp; natural gas</strong><br />The EGoM meeting of 28.05.2008 took decisions regarding the sectors to which natural gas expected to be produced from RIL-Niko's KG D6 field would be sold. M/s RIL and M/s Niko, being the parties to the production sharing contract, are required to implement the decisions taken by the EGoM. In order to operationalise the decisions taken on sale of natural gas by the contractors, the minutes of the EGoM were sent to the contractors for implementation. The decisions taken in the EGoM meeting dated 28.05.2008 were also disseminated through a press note on 24.6.08 and on the Ministry's website. Since the contents of the communication were also put in the public domain, there was no secrecy attached to the communication. No papers of secret nature have been sent to these companies.<br /><br /><strong>For Mukesh Ambani?</strong></p><p><strong><img style="width: 200px; height: 200px" src="http://www.businessworld.in/bw/image/Personalities/Profiles/Mukesh_ambani_ss_mdm.jpg" alt="Mukesh Ambani" title="Mukesh Ambani" width="200" height="200" align="left" />Question by Chandrakant Khaire (Shiv Sena)</strong><br />Whether the government stands to lose heavy amount of royalty in the light of the recent decision of (the) Mumbai High Court in Reliance Industries Krishna-Godavari Basin gas issue.</p><p><strong>Answer by Jitin Prasada, minister of state in the ministry of petroleum &amp; natural gas<br /></strong>The court case between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) is a commercial matter between two companies. As far as (the) government take, including royalty, is concerned, it is governed by the production sharing contract (PSC) signed between the Government and the signatory to the PSC. Royalty is to be paid to the government as per PSC provisions.</p><p><strong>Question by M. Jagannath (INC)</strong><br />Whether the government has appointed a committee of secretaries to look into the pricing of gas from Reliance Industries Ltd. (RIL) KG-D6 Block; whether the Government of Andhra Pradesh has expressed their concerns and reservation to (the) Union Government regarding market-determined pricing of gas by RIL.</p><p><strong>Answer by Dinsha Patel</strong><br />(The) Government had asked (the) Cabinet Secretary to go into issues related to gas pricing. The Report has since been submitted. The Government has constituted an empowered group of ministers (EGoM) to consider issues related to gas pricing under the NELP regime.</p><p><strong>Question by Dharam Pal Sabharwal (INC)</strong><br />Whether Reliance Natural Resources (RNRL) is demanding gas at much lower price against the government approved price or prevalent international price of gas. If so, the reasons therefore and the details of demanding gas at abysmally low price by RNRL vis-a-vis (the) government approved or international price. Whether RNRL is also demanding reservation of gas for future plants for which no schedule is available.</p><p><strong>Answer by Dinsha Patel</strong><br />The production sharing contract (PSC) for the Block KG-DWN 98/3 has been signed between Government of India, Reliance Industries (RIL) and NIKO Resources. RNRL is not a party to the PSC. There is an ongoing litigation between RIL and RNRL in the Bombay High Court on supply of gas from this KG-DWN-98/3 Block in terms of MOU/ demerger scheme approved by the court between the two companies. The matter is presently sub-judice.</p> <script type="text/javascript"> var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } </script> (This story was published in Businessworld Issue Dated 20-07-2009)