'RIL cannot be forced to sell subsidised gas to ADA group'
Government had recently approved a market-determined price of $4.20 dollars per mBtu for gas from KG-D6. Reliance recipe of creating wealth
By PTI |
NEW DELHI: The Bombay High Court has ruled that Mukesh Ambani's Reliance Industries cannot be forced to sell gas from its eastern offshore KG-D6 fields to firms run by his brother Anil at subsidised rates and incur losses.
Justice Anoop V Mohta delivering the final verdict in the gas supply row between RIL and Reliance Natural Resources Ltd asked the two companies to decide on a new gas price as the rate of 2.34 dollars per mBtu agreed in the family demerger agreement had already been rejected by the government.
"The respondents (RIL) cannot be directed to sell or supply gas at subsidised rate and to incur losses," he said.
Government had recently approved a market-determined price of $4.20 dollars per mBtu for gas from KG-D6.
Upholding the government's right to decide on gas price, the court on October 15 said the government's entitlement to profit petroleum from the total production will be reduced if gas is sold at sub-market price or if gas is undervalued.
RIL "cannot be compelled to commit such breaches to face the risk of termination of the contract (for KG-D6) itself."
The court, however, thrashed RIL's contention on family demerger agreement and upheld the pact for splitting the Dhirubhai Ambani empire. Under the demerger agreement, RIL is to supply RNRL 28 mmscmd of gas and an additional 12 mmscmd in case RIL's deal with NTPC fails.
It said the gas supply agreements between RIL and RNRL, entered into in January 2006 with Mukesh Ambani presiding over both RIL and demerged RNRL, was breach of demerger scheme and asked the two to renegotiate the same within four months.
The court's restrain on RIL from selling gas meant for RNRL to third party would continue for the period.
Justice Anoop V Mohta delivering the final verdict in the gas supply row between RIL and Reliance Natural Resources Ltd asked the two companies to decide on a new gas price as the rate of 2.34 dollars per mBtu agreed in the family demerger agreement had already been rejected by the government.
"The respondents (RIL) cannot be directed to sell or supply gas at subsidised rate and to incur losses," he said.
Government had recently approved a market-determined price of $4.20 dollars per mBtu for gas from KG-D6.
Upholding the government's right to decide on gas price, the court on October 15 said the government's entitlement to profit petroleum from the total production will be reduced if gas is sold at sub-market price or if gas is undervalued.
RIL "cannot be compelled to commit such breaches to face the risk of termination of the contract (for KG-D6) itself."
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The court, however, thrashed RIL's contention on family demerger agreement and upheld the pact for splitting the Dhirubhai Ambani empire. Under the demerger agreement, RIL is to supply RNRL 28 mmscmd of gas and an additional 12 mmscmd in case RIL's deal with NTPC fails.
It said the gas supply agreements between RIL and RNRL, entered into in January 2006 with Mukesh Ambani presiding over both RIL and demerged RNRL, was breach of demerger scheme and asked the two to renegotiate the same within four months.
The court's restrain on RIL from selling gas meant for RNRL to third party would continue for the period.
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