‘Move would fetch gains of US $9.2 billion to Essar and partner company’
The Aam Aadmi Party (AAP) leader and Supreme Court advocate, Prashant Bhushan, on Tuesday said that AAP will complain to the Election Commission of India (ECI) against a Cabinet note proposed to be moved by Union minister Veerappa Moily in the middle of elections in the country. The party has accused Moily and attorney general G E Vahanvati of favouring Essar Energy in the Cabinet note by proposing award of oilfields to an Essar-led consortium.
Bhushan alleged that while the revised Cabinet note would favour private oil major, Essar, leading to a loss Rs 52,000 crore to the exchequer, the note bearing April 1, 2014 as its date, also violates the model code of conduct already in force.
The said “favours” are for an already discovered medium-sized oilfield, Ratna and R-series, 130 km south-west of Mumbai that was put up for bidding in 1993. According to an earlier Cabinet note of 2008, the contract had not been duly concluded. According to the revised Cabinet note of April 1, 2014, Moily proposed it to be handed to Essar-led consortium.
Alleging that Moily’s move would fetch gains of $9.2 billion to Essar, AAP said: “This field has estimated cumulative oil production of 12.33 million tonnes and 1,285 million metric standard cubic metre of natural gas over a project life of 22 years. At current prices of $100 per barrel of oil and $4.2 per million British thermal unit of natural gas, the value is $9 billion and $189 million, respectively, totalling $9.2 billion.”
Bhushan said that Moily, who is in charge of both the environment as well as petroleum and natural Gas ministries, was using the “ambiguous opinion of the attorney general to overrule the opinion of the cabinet secretary, finance ministry, petroleum secretary, Planning Commission and the earlier opinion of the law secretary,” who had warned of a huge revenue loss to the Government and had recommended that the block either be re-auctioned or given back to ONGC, as the production sharing contract had not yet been signed..
Armed with these fresh allegations, AAP has questioned whether the field could be given to Essar even though the bid conditions were 18 years old and the price of oil had increased six-fold.
On the other hand, the Essar-Premier consortium, which includes the firm's British partner, Premier Oil, had warned of legal action, including under India-UK Bilateral Investment Protection Agreement, if the award, bagged through an open international bidding process, was cancelled.
Report: Allocation and pricing of gas
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