Government's stand in gas row dishonest: Anil Ambani Group (Lead)

The Anil Ambani group Tuesday opposed a move initiated by the government to become a party to the dispute over natural gas with Mukesh Ambani's Reliance Industries and termed the attempt "dishonest and collusive".

"Reliance Natural Resources objects to the leave to appeal to be granted to the ministry of petroleum and natural gas," the group said in an affidavit filed in the Supreme Court to counter the government's petition.

"The stand of the ministry of petroleum and natural gas, Government of India, is dishonest and collusive," the affidavit filed with the court registry said, as hearing resumed on the dispute which is over pricing and supply of natural gas from the Krishna-Godavari basin.

"If the government is made a party, Reliance Natural Resources' right to full discovery, inspection and cross-examination will have to be preserved. Reliance Natural Resources assures this honourable court it will not waste any time in the disposal of the matter."

The dispute is over the supply of 28 million units of natural gas for 17 years at $2.34 per unit to Reliance Natural Resources from the Krishna-Godavari natural gas fields, off the Andhra Pradesh coast, awarded for exploration and harnessing to Reliance Industries.

The price, tenure and quantity were all based on a family re-organisation pact in 2005 but Reliance Industries subsequently said it could only sell the gas for $4.20 per unit, as this was the price, the company claimed, that was fixed by the government.

The dispute was first heard in the Bombay High Court that gave its verdict in favour of Reliance Natural Resources. But this was subsequently challenged in the apex court by the Mukesh Ambani-led firm.

A three-member Supreme Court bench, comprising Chief Justice K.G. Balakrishnan, Justice B. Sudershan Reddy and Justice E. Sathasivam, is now hearing the matter.

According to Tuesday's affidavit, it had been agreed by all concerned parties at the Bombay High Court that the oil ministry will be allowed to intervene but only for the limited purpose of assisting in the matters relating to production sharing contract.

The affidavit also quoted from what the oil ministry told the Bombay High Court -- that it has nothing to say as far as the dispute between the two companies is concerned and only wants an immediate vacation of an interim order.

During the hearing, Harish Salve, counsel for Reliance Industries, said his client was a mere contractor chosen by the government to explore and harness natural gas and the state remained the real owner.

He said Reliance Industries had neither the independent freedom nor the right to fix the price of natural gas, and was only entitled to earn requisite profits from the sale of hydrocarbon.

Salve also dwelt on the family re-organisation pact and said while at that time it was believed that Reliance Industries had the freedom to fix gas price, the government's subsequent gas utilisation policy changed the rules of the game.

The other points raised by the Anil Ambani group in the counter-affidavit include:

-Reliance Industries wrongfully hiked the capital expenditure for the gas from $2.47 billion to $8.8 billion, even though the estimated output was just doubled from 40 million units a day

-The Central Bureau of Investigation is probing oil regulator V.K. Sibal, who was instrumental in approving the hike in expenditure

-Reliance Industries will make a huge profit even if gas is sold at $2.34 per unit

-Reliance Industries has tried to wriggle out of a similar contract for supply of gas to state-run power utility NTPC at $2.34 per unit.

Last updated on Nov 10^th, 2009 at 17:53 pm IST--IANS