New Delhi: The Central Vigilance Commission, or CVC, has asked the Central Bureau of Investigation (CBI) to look into allegations of a “nexus” between director general of hydrocarbons (DGH) V.K. Sibal and Reliance Industries Ltd, or RIL.
The request for a “discreet field verification”, made in a 1 October letter makes Sibal, whose term as DGH comes up for renewal at the end of this month, the latest victim of collateral damage in the ongoing fight over natural gas between RIL, controlled by Mukesh Ambani, and Reliance Natural Resources Ltd (RNRL), promoted by his estranged younger brother Anil Ambani.
The letter, which says its contents are based on “source information”, echoes allegations made in a 17 September article that appeared in the Pioneer newspaper that have already been denied by Sibal and his department.
Gas supply: A rig at Reliance Industries’ Krishna-Godavari basin.
CVC oversees the functioning of government agencies and state-owned companies.
A government official who isn’t part of CVC but is privy to the matter confirmed that the agency had written a letter on the issue.
DGH has been accused by RNRL in the past of approving an increase in RIL’s capital expenditure on the D6 exploration block of the Krishna-Godavari basin from $2.4 billion (Rs11,400 crore) to $8.8 billion. This block is where RIL made one of the biggest discoveries of gas in India.
RIL denied it had benefited improperly from the actions of DGH.
“Reliance Industries has not indulged in granting favours or drawn any undue advantage from any such alleged favours as is falsely suggested,” the company’s spokesperson said in an email statement.
RIL and RNRL are engaged in a court battle over the terms of supply of this gas to the latter’s proposed power plant in Uttar Pradesh. Exploration companies get to recover their cost from the hydrocarbons they find and any increase in capital expenditure means more of so-called cost oil or gas.
A spokesperson for Reliance-Anil Dhirubhai Ambani Group, of which RNRL is a part, declined to comment.
K.S. Ramasubban, secretary, CVC, did not respond to phone calls or to a message left at his office.
A CBI spokesperson and an external spokesperson for RIL did not respond to Mint’s queries at the time of filing this story.
L.N. Gupta, the central vigilance officer for the petroleum ministry, declined to comment. Petroleum minister Murli Deora and petroleum secretary R.S. Pandey could not be contacted for comment. The Directorate General of Hydrocarbons falls under the purview of the petroleum ministry.
Sibal reiterated his denial of the allegations that include financial favours bestowed on members of his family. He also denied knowledge of the letter written by CVC to CBI. “The management committee approves only the development plan and not the expenditure cost,” he said. “The ministry of petroleum and natural gas had hired Mustang, an international consultant, whose find was validated by Goldman Sachs, which have further stated that this is the most cost- and time-effective field development plan in the world.”
Sibal’s detailed rejoinder to the Pioneer story, which has been put up on the Directorate General of Hydrocarbons’ website, doesn’t seem to have put paid to the issue.
“The allegations are serious and if substantiated, they would raise doubts about the integrity and objectivity of Shri V.K. Sibal,” says the letter from Ramasubban addressed to CBI director Ashwani Kumar. It added that since a decision on extending Sibal’s tenure was to be made by the end of October, a “discreet field verification” on the matter should be carried out and its “report submitted to the commission well within time”.