New Delhi: Petroleum Minister Murli Deora on Thursday ruled out government intervention in pricing of gas from Reliance Industries' KG basin field as India's new exploration policy guaranteed market determined prices to companies taking the risk of investing in the country's oil and gas hunt.
Deora told Andhra Pradesh Chief Minister Y S R Reddy that successive governments - first NDA and then UPA - had promised marketing freedom to companies investing in the dormant oil and gas exploration sector under the New Exploration Licensing Policy (NELP).
“To impose price cap on gas RIL plans to start producing from July 2008, would be walking back on the signed contract for the KG-D6 block and would not stand scrutiny of any court,” PTI quoted Deora as saying.
Mukesh Ambani-run RIL has proposed to sell gas at a price ranging between $4.58 per million British thermal unit (at USD to rupee rate of 41) and $4.33 per mBtu (at USD to rupee rate of 45). However, in view of the opposition the pricing is being looked into by a Committee of Secretaries.
The block was awarded to RIL in the first round of global bidding under NELP in 2000.
Sources said Deora declined Reddy's request for taking government share from the KG-D6 block in kind (physically taking deliveries of gas) as the volumes vary from year to year and would require the Centre to put up infrastructure that may lay idle when the government share is low.
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