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Gas Wrangle | R-Adag ad blitz ends; govt, NTPC ready to act

Gas Wrangle | R-Adag ad blitz ends; govt, NTPC ready to act
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First Published: Wed, Aug 26 2009. 12 24 AM IST
Updated: Wed, Aug 26 2009. 12 24 AM IST
New Delhi: Reliance-Anil Dhirubhai Ambani Group (R-Adag), which was running a controversial series of front page advertisements in several newspapers, including Mint, targeting the ministry of petroleum, confirmed on Tuesday that it has withdrawn the campaign.
The confirmation comes even as a top government official said on Tuesday that state-run NTPC Ltd would file a special leave petition (SLP) in the Supreme Court to intervene in the ongoing dispute between Mukesh Ambani-controlled Reliance Industries Ltd (RIL) and Anil Ambani-controlled Reliance Natural Resources Ltd (RNRL) over the supply of gas from the former’s D6 gas block in the Krishna-Godavari basin (KG D6).
Separately, the government will also file an application in the apex court to protect the utility’s interest.
“We will file SLP (in the Supreme Court) within the next six to seven days,” power secretary Hari Shankar Brahma told reporters in New Delhi. R.S. Sharma, chairman and managing director of NTPC, declined comment.
Later in the day, law minister M. Veerappa Moily said that the state-run utility’s concerns had been addressed and that there would be no more meetings of a four-member ministerial panel, comprising finance minister Pranab Mukherjee, power minister Sushilkumar Shinde, petroleum minister Murli Deora and the law minister, which was formed to come up with a unified stand for the government on the issue of supply and pricing of gas from KG D6.
“Petroleum ministry has already filed an SLP and if any amendment is to be filed, they will do it,” Moily added. The ministry’s initial SLP was seen by analysts as running counter to NTPC’s interests.
The outcome of the meeting will be seen in “the Supreme Court”, Moily said. According to a person who is part of the government’s legal team but did not want to be identified, the government will file an application in the Supreme Court on Wednesday to clarify certain issues in its earlier SLP.
An RIL spokesperson said, “As a law-abiding and responsible corporate citizen, Reliance Industries refrains from commenting on issues which are sub judice.”
An RNRL spokesperson in an email response said, “We will be delighted if, as reported in the media, and in response to the enhanced public focus on the subject and the government’s commitment in its media release last week, the petroleum ministry and NTPC even now take effective legal steps to enforce NTPC’s contractual right to receive 12 million cu. m of gas per day from Reliance Industries Ltd for its Kawas and Gandhar projects, at a fixed price of $2.34 (per million British thermal unit, mBtu ) for a period of 17 years, thereby defeating RIL’s malafide attempts to dishonour its binding legal commitments. We cannot comment on the implications on our case, as the matter is sub judice.”
Mint could not ascertain the reason behind the withdrawal of the advertising campaign. A senior cabinet minister who did not want to be identified said the ministry of petroleum “did not have any talks with R-Adag. It is good that better sense has prevailed.” An RNRL spokesperson in an email response said, “The five-part public interest campaign has already ended on Friday, 12 August.”
The ads had alleged that the ministry of petroleum was forcing NTPC to suffer Rs30,000 crore losses while garnering “super-normal profits” of Rs50,000 crore for RIL. The government on Friday refuted this allegation and several others.
The lawsuit between NTPC and RIL in the Bombay high court dates back to December 2005, with the point of contention being the existence and terms of a valid contract between the two. NTPC claims there is one in which RIL promised to supply 12 million standard cu. m a day (mscmd) of gas for 17 years at a price of $2.34 per mBtu. RIL claims otherwise.
In the case in the Supreme Court, RIL is contesting the claims of RNRL over the supply of 28 mscmd of gas from KG D6 for 17 years at $2.34 per mBtu, 44% cheaper than the government-fixed price of $4.20. RNRL is basing its claims on a 2005 family pact between the estranged Ambani brothers, but RIL has held that it cannot give gas to anybody without the approval of the government, the owner of all sovereign assets.
utpal.b@livemint.com
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First Published: Wed, Aug 26 2009. 12 24 AM IST