Reliance Industries has seen crude oil production falling by more than 31 per cent from its MA oil field in the predominantly gas-rich KG-D6 block off the east coast.
It is also understood that scope of this audit will far exceed the normal course of audit by CAG and the prime objective may be to detect fraud, if any, by RIL allegedly in collusion with oil regulator DGH and Ministry of Petroleum and Natural Gas.
RIL has sent a draft GSPA to Essar Oil and the contract may be inked within the next few days.
NTPC was to open letter of credit in favour of RIL for an amount equivalent to a month's supplies.
To proceed with a Cabinet proposal to grant the relaxations to RIL, the Election Commission's approval will be sought.
Mustang's work for the KG-D6 Development (plan) was based on all available information and performed in an independent manner in October/November 2007," Woods Group -- the parent firm of the engineering consultancy firm -- said in an e-mailed statement from Houston. Anil Ambani group, fighting a legal battle to source gas from RIL's KG-D6 fields at less than market price, had stated the Mustang was not the best to validate because it had carried out separate work.
Reliance Industries has refused to give natural gas to new customers by cutting supplies to power and fertiliser plants.
Lok Sabha MP Harsh Vardhan on July 23 wrote to Petroleum Minister Murli Deora asking why the government had kept quiet for all this while on the Ambani family MoU that provides for dividing Krishna-Godavari basin gas between companies run by brothers Mukesh and Anil.
State-owned Oil and Natural Gas Corp (ONGC) plans to invest $4.05 billion in producing natural gas from its ultra deepsea UD-1 discovery in a block that sits next to Reliance Industries' prolific KG-D6 fields.
Development plan for K-G basin runs for 12 years, so can't supply to RNRL for 17 years, says RIL.
MA fields were producing around 32,000-33,000 barrels of oil per day and 8 million standard cubic meters per day of gas.
In Q3, E&P business accounted for just 1.5% of gross revenue
The government plans to more than double the price of natural gas produced by Oil and Natural Gas Corp (ONGC) to $4.20 per mmBtu, in a move that will help the state-run firm break even in gas business.
Currently, gas imported in its liquefied form costs $5.7 per million British thermal units as against $1.82 per mmBtu for fuel produced from state-owned Oil and Natural Gas Corporation's fields and $4.2 per mmBtu for gas from Reliance Industries' KG-D6 field.
The government may subsidise costly imported gas by making users of cheaper domestic gas pay more under its unique plan to rationalise gas prices, a source in knowledge of the development said.
The SC bench headed by judge S S Nijjar suggested to appoint foreign arbitrator in RIL'a ongoing case on gas pricing.
The government had this month more than doubled RGPPL's allocation from KG-D6 to 5.67 million standard cubic meters per day that will help generate about 1,000 MW of electricity.
Reliance Industries has resolved almost all issues with fertiliser firms, who are first in line to receive natural gas supplies from the Mukesh Ambani-run company's prolific KG-D6 fields, and is likely to sign gas supply agreements this month.
Petroleum Minister Murli Deora has sought reconstitution of an empowered group of ministers to decide on allocation of gas from RIL-operated KG-D6 fields to new customers. Deora, who met T K A Nair, principal secretary to the prime minister on Sunday, has formally written to the Cabinet secretary for reconstitution of the eGoM on the lines of the previous ministerial group headed by the then External Affairs Minister Pranab Mukherjee.
NTPC is fighting a case in the Bombay high court to get gas from RIL at a committed price of $2.34 per mmBtu.
Replying to a calling-attention motion in Rajya Sabha, oil minister Murli Deora said the $4.2 per million British thermal unit price fixed for gas produced from KG-D6 fields of RIL was lower than the average of $5.51 per mmBtu charged by UK's BG-led consortium for Panna/Mukta and Tapti gas. It was also lower than the $4.3 per mmBtu price of gas produced from Cairn's Ravva Satellite fields and $4.75 per mmBtu for the UK firm's Lakshmi fields.
The high court is hearing a dispute between Mukesh Ambani-led Reliance Industries and Anil Ambani's Reliance Natural Resources over a gas sale agreement, in which the government has intervened. NTPC has filed a separate suit against RIL, seeking that RIL execute the contract of gas supply.
The EGoM has fixed priority for the 25 million standard cubic metes per day of gas Reliance plans to start pumping from September this year and 40 mmscmd from March 2009. It has asked the company to first supply gas from KG-D6 field, the first major field of NELP to go on production, to existing gas-based urea plants, which are now getting fuel below their full requirement.
"All requirements including providing bank guarantee have been met by NTPC and gas flow can start as early as tomorrow," an official said.
Anil Ambani Group firm Reliance Infrastructure has agreed to pay the levy, although under protest, and has asked the Mukesh Ambani firm to resume natural gas supplies to its power plant.
The quantities and price of $4.2 per mmBtu for gas under the GSPAs signed for five years are as approved by the government.
State-run NTPC Ltd is likely to sign by month-end an agreement to buy natural gas allocated by the Centre from Mukesh Ambani-run Reliance Industries Ltd at government-approved rate of $4.20 per mmBtu, power secretary H S Brahma said on Wednesday.
RIL has complained the to power ministry about NTPC's reluctance to sign an agreement to buy gas from it and said that the power PSU stands to lose Rs 15,000 crore (Rs 150 billion)on buying imported LNG.
Dubbing as "most unfortunate" the advertisement campaign against it by the Anil Ambani group, the government on Friday hit back, saying the propaganda was unleashed on a sub-judice matter.
Reliance Industries has written to the government that it has no objection to the Comptroller and Auditor General of India auditing its gas field costs and said it is operating the field in compliance with rules.
Reliance Industries is likely to sign a gas sale contract with Indraprastha Gas Ltd on Thursday that would use the supplies from RIL's eastern offshore gas fields for vending CNG to automobiles and piped gas to kitchens in the national capital.
Some documents not yet provided, spokesperson tells DNA Money. Murli Deora's Petromin says report submitted! ADAG once again asks for tabling of report, shows 'proof' govt appointed auditors of RIL expense sheet have conflict of interest.
Given the incredibly high stakes involved, the Comptroller and Auditor General and Central Vigilance Commission should examine relevant facts and find out if capex was overstated, Anil said, pointing that budgeted expenditure of RIL for peak production of 40 mmscmd was only Rs 12,000 crore (Rs 120 billion) in 2004.
In the midst of the high-octane legal battle between the two Ambani brothers over gas supply from KG-D6 fields, the Planning Commission said on Thursday that it is not concerned about the outcome of the dispute, but only wanted to promote the use of the fuel for the power and fertilizer sectors.
Reliance Industries' eastern offshore KG-D6 gas fields at peak production will help the nation save $8.3 billion annually or 0.7 per cent of the GDP, investment banker Morgan Stanley said on Friday.
A price of $4.20 per million British thermal units is not viable for smaller gas discoveries, say industry experts.
Mukesh Ambani-led Reliance Industries on Friday said it may sell gas from its KG-D6 fields to RNRL at $4.20 per mmBtu if the government allocates fuel to the Anil Ambani Group firm.
State-run NTPC has agreed to buy natural gas from Reliance Industries but is opposed to paying marketing margin to the private firm and wants to use the fuel at plants other than Kawas and Gandhar that were identified by the government.
HPCL's Vizag refinery in Andhra Pradesh was to receive the consignment of 65,000-70,000 tonne on November 17, but the ship carrying the oil could not offload it due to bad weather. The MA-1 oilfield started production in September. The company sold the first consignment to HPCL at a $5.34 a barrel discount to Nigerian crude grade Bonny Light.
Of the 17.99 mmcmd gas allocated to the power sector, gas supply pacts of only 2.67 mmcmd allocated to NTPC remained to be signed. NTPC's opposition has also delayed the GSPA for a separate 2.7 mmcmd allocated to the Dabhol power plant and the same is now slated to be signed next week.
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