Ambani & Deora: Meeting point

New Delhi, Aug. 3: Reliance Natural Resources chairman Anil Ambani met petroleum minister Murli Deora and secretary M.S. Srinivasan today to seek a review of the government’s decision on the KG basin gas price. The controversy surrounding the issue has, in effect, stalled his plans for setting up a power plant in Uttar Pradesh.

The government has put its foot down on Reliance Industries’ proposal to supply gas to Anil’s company for $2.34-per-million Btu as Reliance itself was selling natural gas from the Tapti gas fields at $4.75 per million Btu to other companies.

Anil Ambani is reported to have equated his case with NTPC and argued that the government estimate of revenue loss due to the sale was only “notional”.

However, government officials are believed to have told Ambani that the gas price has a direct bearing on government revenues and it cannot allow “a deal between two brothers signed on the sidelines of a demerger agreement to be passed on as a price arrived at arms-length basis.”

Sources said the officials also told Ambani that the NTPC price mentioned by RNRL has never come to the ministry for approval and to say that the price could apply for all gas from RIL’s K-G basin would be incorrect.

Interestingly, the issue had assumed a political hue as Samajwadi party MP Amar Singh had alleged that Mukesh Ambani had deliberately colluded with petroleum minister Murli Deora to spike the 4,300-mw project that Anil was setting up.

Anil is also believed to have discussed the allotment of coal bed methane blocks with senior officials.

Anil’s group firms Reliance Natural Resources and Reliance Energy, along with their consortium partner Geopetro of France, were allotted four CBM blocks but they contend that they have won two more blocks.

The consortium had bid for all 10 CBM blocks, bidding for which closed on June 30.