ADAG questions credibility of DGH; evokes rebuttal
DGH said that RIL's cost of gas production even after higher capex was comparable to any other field in the country. Video: Ambani gas row | RIL's KG-D6 facility
By PTI |
MUMBAI: Clashing over RIL's gas field cost, an Anil Ambani group firm on Wednesday questioned the credibility of audits commissioned by the Directorate General of Hydrocarbon, evoking sharp protest from the regulator.
ADAG firm Reliance Power today alleged that there was a conflict of interest between the experts who carried out the validation and the contractor (RIL) for approving the Rs 45,000 crore field development costs.
RPower CEO J P Chalsani today said Mustang Engineering has been advising RIL on various projects, while P Gopalakrishnan, the other independent expert, was on faculty of the School of Petroleum Technology, which is chaired by RIL Chairman Mukesh Ambani.
None of the two experts could be contacted for comments. The government, he said, stands to lose Rs 30,000 crore revenue because of the inflated capex, as RIL is entitled to recover the entire cost before sharing revenues with the government.
DGH Director General V K Sibal said in New Delhi that RIL's cost of gas production even after higher capex was comparable to any other field in the country. World over exploration and development is not judged by the capital expenditure incurred but by the actual cost of production.
On the experts, he said Mustang was selected through an international bid, while Gopalakrishnan was on DGH's panel.
The cost of production for Dhirubhai 1 and 3 fields at the approved field development cost of USD 8.836 billion came to USD 1.28 per million British thermal unit, he said.
"I don't want to join issues with them but you should let people who know this subject decide on the issue," he said. "If Rs 45,000 crore capital expenditure claimed by them was inflated, the cost of production in terms of cost per million British thermal unit would also come higher."
ADAG firm Reliance Power today alleged that there was a conflict of interest between the experts who carried out the validation and the contractor (RIL) for approving the Rs 45,000 crore field development costs.
RPower CEO J P Chalsani today said Mustang Engineering has been advising RIL on various projects, while P Gopalakrishnan, the other independent expert, was on faculty of the School of Petroleum Technology, which is chaired by RIL Chairman Mukesh Ambani.
None of the two experts could be contacted for comments. The government, he said, stands to lose Rs 30,000 crore revenue because of the inflated capex, as RIL is entitled to recover the entire cost before sharing revenues with the government.
DGH Director General V K Sibal said in New Delhi that RIL's cost of gas production even after higher capex was comparable to any other field in the country. World over exploration and development is not judged by the capital expenditure incurred but by the actual cost of production.
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On the experts, he said Mustang was selected through an international bid, while Gopalakrishnan was on DGH's panel.
The cost of production for Dhirubhai 1 and 3 fields at the approved field development cost of USD 8.836 billion came to USD 1.28 per million British thermal unit, he said.
"I don't want to join issues with them but you should let people who know this subject decide on the issue," he said. "If Rs 45,000 crore capital expenditure claimed by them was inflated, the cost of production in terms of cost per million British thermal unit would also come higher."
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