While Mukesh Ambani headed Reliance Industries limited (RIl) and Petroleum Minister Veerappa Moily have claimed that geological uncertainties were the reason for natural gas production shortfall from the KG Basin, a report commissioned by Director General of Hydrocarbons (DGH) nails this lie.
Veteran CPI leader Gurudas Dasgupta on Friday released the findings of Dr P Gopalakrishnan, a world-renowned reservoir expert, who indicted Reliance Industries limited (RIl) for its failure to attain the mandated production.
“The field has been started and produced as per expectations for a year or so, but the operator did not drill the wells as per the Field Development Plan by the end of the first year, thereby affecting a rate decline….There is no geological or reservoir constraints to achieve the recommended gas production….
"The shortfall in gas production is due to non-drilling of the adequate number of wells as per the Actual Development Plan (ADP) and therefore drilling as per ADP may be undertaken immediately," said the report of the international expert, assigned by DGH. This report was approved by Petroleum Ministry in 2011.
Interestingly, bypassing this finding, Moily recently circulated a Cabinet note claiming that "geological uncertainties" was the reason for shortfall in production of natural gas from KG Basin.
This is an attempt to provide an escape route to RIl and save it from paying a penalty of $1 billion for production shortfall and give them the revised price of $8.4 per unit, alleged Dasgupta.
"I would request you to carefully peruse Gopalakrishnan's report which has clearly nailed the lie of geological uncertainty being used by RIl. Since this report had been accepted by both DGH and the Petroleum Ministry, the Cabinet should not succumb to the devious ploy of the Petroleum Minister to reopen the issue to give undue benefit to RIl and weaken the Government's case of arbitration," said the veteran CPI leader in a letter to Prime Minister Manmohan Singh on Friday.
Urging the Prime Minister to enforce fines on RIl for not producing mandated quantity of natural gas, Dasgupta pointed out that the total penalty should be around $2.4 billion.
"However, the Petroleum Ministry has not issued a fresh notice to RIl based on DGH's suggestion and the Petroleum Minister is stalling the matter. I would urge you to direct Petroleum Ministry to issue a fresh notice to RIl immediately, both for last year and the current year," said Dasgupta.