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Reliance refutes allegations of gas hoarding

September 06, 2013 20:30 IST

Reliance Industries Ltd (RIL) has refuted the allegation in the Supreme Court that it is deliberately reducing production of gas in KG basin in anticipation of a higher gas price and said it has taken all steps for arbitration proceedings with Centre to sort out all disputes.

In a 51-page affidavit, the company contended that the allegations levelled by CPI MP Gurudas Dasgupta in his PIL is baseless and there is "not an even an iota of substance" in it.

"These respondents (RIL and others) submit that there is not even an iota of substance in this allegation. The petitioners seek to allege that by reducing production of gas, these respondents have hoarded the gas in anticipation of a higher gas price.

"Any allegation which suggests that a contractor has possibly deliberately suppressed the production of gas from a producing well(s) betrays complete disregard of the technical and technological realties of the process of production of natural gas from these reservoirs," the affidavit said.

It said that the actual rate of flow of gas cannot even be ascertained with certainty till the production actually commences as gas is to be produced from the pores of complex geographical rock formations.

The response was filed in compliance with apex court's order directing the company to file its stand on the allegation levelled by Dasgupta who questioned Centre's decision to raise the gas price.

"The petitioners allege that the contractor is deliberately under utilising the facilities to pressure the government into agreeing an unreasonably high price for gas. "These allegations are misconceived, completely unfounded and made in deliberately feigned ignorance of the fact that production levels are subject to factors outside of the contractor’s control," it said.

It said "the reason why production levels envisaged in the AIDP have not been achieved inter alia is that technical difficulties encountered after drilling the wells envisaged as part of the first phase of the development plan have resulted in a significant decline in production levels"

The affidavit said that it has taken and are taking all necessary steps in order to make progress in the arbitration commenced by it with a view to having the disputes resolved promptly and efficiently.

The apex court had earlier on July 29 agreed to examine government's controversial decision to raise the price of natural gas and had issued notices to the Centre, RIL and the Petroleum Minister Veerappa Moily.

The apex court had also sought response from BP Exploration (Alpha) Limited, NIKO Resources Ltd and Ministry for Petroleum & Natural Gas on a PIL filed by Dasgupta who alleged that no due diligence was done by the government while increasing the price of natural gas.

The MP pleaded for a slew of directions including review of Centre's decision to increase the price of natural gas from $4.2 per million British thermal unit (mbtu) to $8.4 mbtu from April 1, 2014. 

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