11 October: After a visit to Badrinath, Anil Ambani makes an offer to amicably resolve differences. In response, an RIL statement, while welcoming the move, points out that the dispute is under litigation and was not just a family matter. RIL says it hopes that ‘overtures for rapprochement are in no way related to the ongoing hearing of the case.’
20 October: As the Supreme Court commences hearings in the dispute, RIL’s lawyer Harish Salve, argues that the family agreement was not binding as it had not been shown to the board of directors of RIL. He adds that RIL could not supply gas at $2.34 per mBtu as that would be tantamount to violating government policy. Even as the Supreme Court suggests arbitration proceedings as an option to resolve the dispute, RIL argues that the higher price of gas would help the government earn higher revenue.
November:
4 November: Justice R. V. Raveendran recuses himself from hearing the case.
25 November: Anil Ambani makes a sudden appearance in the Supreme Court even as his team of lawyers led by Ram Jethmalani, argues that the dispute can be resolved within the parameters of the family settlement and de-merger scheme.
December:
18 December: Chief Justice of India K. G. Balakrishnan at the head of a three-judge bench reserves judgement on the case. On the last day of the hearings in the Supreme Court, sparks fly as lawyers representing both RIL and RNRL make impassioned pleas before the bench of three judges. It is, however, solicitor general Gopal Subramaniam who seems to be the most agitated because, as he said, ‘the government had been “perforce compelled” to be present in the dispute and that we do not again want to be subject to such lateral attacks’. Reacting to RNRL’s lawyer Jethmalani describing Subramaniam’s submissions as a ‘mock fight’, the solicitor general retorts that a ‘mockery’ had been sought to be made of the government’s position. He adds: ‘I want to borrow an expression used by Mr [Harish] Salve [RIL’s lawyer] to say that this was [a] trial by ambush for the government. If [there is] any person who actually has reason to complain, it is the government of India.’
2010:
February:
1 February: Subir Raha, former ONGC chairman passes away
March:
KG-D6 hits peak output of 61.5 mscmd.
May:
7 May: Supreme Court judgment goes beyond the contractual dispute between two companies headed by the Ambani brothers. While the verdict is widely interpreted as a victory for Mukesh Ambani, the Court’s decision gives complete authority to the government to price, utilise and distribute natural resources.
19 May: Cabinet more than doubles administered prices of natural gas to the level of $4.20 per mBtu from $2.34 per mBtu, ostensibly on the ground that government-owned public sector oil and gas companies are incurring losses on their sales of gas.
May: RIL and RNRL issue identical press statements; stating that the old ‘non-compete’ agreement, which prevented each brother from getting into the other’s territories, had been scrapped.
June:
8 June: Anil Ambani drops defamation suit claiming Rs 10,000 crore as damages that he had filed against his elder brother in the High Court at Mumbai.
11 June: RIL unfolds a mega-plan to enter the broadband services business.
December:
22 December: On the sidelines of a seminar organised by the Confederation of Indian Industry (CII) in Kolkata, Atul Chandra, president (operations), RIL, asserts that his company wants a further hike in the prices of deepwater gas from $4.20 per mBtu.
2011:
January:
21 January: RIL posts highest quarterly profit in three years. But, tucked away in the fine print is the news that natural gas production from KG-D6 fell 12 per cent to about 53 mscmd.
18 January: Murli Deora replaced by S. Jaipal Reddy as petroleum minister.
February:
Government’s annual Economic Survey prepared by the ministry of finance says RIL would hit peak gas output of 80 nmscmd from the KG-D6 fields in 2012-13 fiscal.
21 February: RIL announces that BP will buy a 30 per cent stake in 23 oil and gas blocks for a consideration of $7.2 billion. The government later gives clearance to BP to buy stake in 21 blocks.
April:
19 April: The DGH rejects two gas discoveries made by RIL in a deep- sea block off the Odisha coast (called NEC-25) and the directorate also refuses to approve the budget for the KG-D6 field. The grounds for the first were that tests done to confirm reserves were different from the ones recommended by the regulator. The DGH had placed the reserves at 3.5 trillion cubic feet (tcf) compared to about 5 tcf estimated by Reliance.
May:
9 May: RIL cuts natural gas supplies to non-core users like refineries and steel plants so that the full demand of fertiliser and power plants can be met.
June:
4 June: Mukesh assures investors that his company would take up their concern over gas from its KG-D6 field being sold at less than a third of the price of imported LNG.
12 June: DGH refuses to accredit three natural gas discoveries made by the company at the KG-D6 block.
12 June: Draft audit report on RIL by the Comptroller and Auditor General of India (CAG) leaked to the media.
July:
22 July: Petroleum minister Jaipal Reddy announces that the government has cleared a $7.2 billion deal for RIL to sell a major stake in 21 of its oil and gas blocks to BP.
August:
30 August: RIL announces completion of BP’s acquisition of a 30 per cent stake in 21 oil and gas PSCs that Reliance operates in India, including the producing KG-D6 block.
September:
9 September: CAG report tabled in Parliament. Its assessment on the PMT JV (Panna-Mukta-Tapti Joint Venture) is as damning as the one on KG Basin. It says: ‘Despite our repeated efforts, the PMT JV operators did not provide important and relevant records on the ground that scrutiny of these records did not fall within our audit scope.’
November:
28 November: RIL announces arbitration proceedings against government to ‘finally resolve this cost recovery issue so as not to hinder future investments in this block. It adds that ‘validity of the stance adopted by MoPNG should be finally determined by an independent tribunal.’ This surfaces when the DGH advises the petroleum ministry to disallow $1.2 billion of the $5.7 billion expenditure already made by RIL.
2012:
January:
6 January: A letter sent by the PMO to petroleum secretary G.C. Chaturvedi asks him to consider obtaining legal opinion on gas price hike request of RIL and refers it to the Empowered Group of Ministers (EGoM) on gas. Puts a 90-day window for reaching an amicable settlement.
24 February: The EGoM states that the law ministry, in consultation with the attorney general of India, could rule on the legality of a hike.
April:
20 April: BP seeks permission from the government to undertake concept validation in 16 gas discoveries in the KG-D6 block, but its request is turned down.
27 April: RIL reports natural gas production in KG-D6 down to less than 34 mscmd, according to a status report filed by the company with the petroleum ministry.
May:
4 May: MoPNG serves a cost recovery penalty notice on RIL and BP for falling natural gas output from KG-D6 fields, hiking the penalty by 18 per cent to $1.46 billion.
8 May: Petroleum minister Jaipal Reddy tells Parliament that KG-D6 gas field’s output could fall to 20 mscmd in 2014-15.
23 May: Canadian partner Niko Resources and BP say D4 block exploration cancelled.
31 May: Committee headed by C. Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, appointed by the government to review production sharing mechanism in the oil and gas sector.
June:
7 June: At RIL shareholders meet, Mukesh Ambani announces plan to double natural gas production in three to four years.
21 June: Former secretary to the government of India E.A.S. Sarma in a letter to SEBI C
hairman U.K. Sinha, asks SEBI to look into non- disclosure of information by RIL that KG-D6 blocks have 80 per cent less gas than originally estimated.
22 June: Niko Resources cuts estimates of the natural gas field’s reserves by 80 per cent.
July:
2 July: As his company grapples with a string of regulatory issues, Mukesh Ambani meets the deputy chairman of the Planning Commission Montek Singh Ahluwalia.
October:
27 October: Petroleum minister Jaipal Reddy moved to the ministry of science and technology and replaced by M. Veerappa Moily who was earlier power minister.
November:
2 November: Arvind Kejriwal of the newly formed Aam Aadmi Party (AAP) says that it is not prime minister Manmohan Singh who is running the country but India’s richest man Mukesh Ambani.
9 November: Arvind Kejriwal says that in July 2011, the government had received a list of some 700 people who were holding bank accounts in HSBC (or the Hongkong and Shanghai Banking Corporation) in Geneva, Switzerland, among whom were the Ambani siblings, Mukesh and Anil.
December:
25 December: Rangarajan Committee submits its report. New formula for fixing the price of domestically produced natural gas could double prices.
2013:
January:
18 January: The AAP posts on its website a seven-page legal notice sent by RIL in the middle of December 2012 to over a dozen companies running television channels. RIL’s lawyers demanded ‘a retraction and an unconditional apology in the form approved and acceptable to our clients’ within three days from the receipt of the notice.’
22 January: Arvind Kejriwal writes to Mukesh Ambani asking why RIL’s lawyers had sent defamation notices to the television channels when it was Kejriwal and Bhushan who had made the allegations. Was Ambani trying to ‘steamroll the TV channels into subservience’?
March:
Petroleum ministry moves a draft proposal for the consideration of the EGoM, now headed by defence minister A.K. Antony for revising gas prices for both the public sector oil companies and RIL based on the Rangarajan Committee’s recommendations. The Cabinet secretariat had returned the proposal saying that the new formula was not covered under the EGoM’s reference.
April:
14 April: BP’s chairman Bob Dudley and Mukesh Ambani meets prime minister Manmohan Singh and the Planning Commission’s deputy chairman Montek Singh Ahluwalia. Concurrently, BP holds its board meeting in India.
28 April: DGH headed by RN Choubey asks RIL to relinquish 86 per cent of the discovery area in the KG basin since under the PSC the firm had overshot the time allowed to it to develop the area.
May:
24 May: Communist Party of India MP Gurudas Dasgupta convenes a media conference during which he circulates excerpts from a note dated 14 May prepared for the Cabinet together with a letter he had written to the prime minister in which he alleged that the ministries of finance, petroleum and natural gas and the Planning Commission were ‘colluding’ to push up the price of natural gas from KG-D6 wells being operated by RIL, way above what had been recommended by the Rangarajan committee.
24 May: The petroleum ministry refutes Dasgupta’s allegations says gas prices can incentivise investment so that production in the country reaches optimum levels. Petroleum minister Veerappa Moily says price hike will apply to all firms.
25 May: RIL-BP-Niko announces a ‘significant’ gas and condensate discovery, names it D55.
June:
1 June: The DGH states that natural gas production at the deepwater KG-D6 had ‘dropped to less than 15 mscmd, the lowest since starting output in 2009’.
6 June: PMO and the Cabinet secretariat returns the Cabinet note on gas pricing to the petroleum ministry asking it to seek inter-ministerial consultations in view of the divergent opinions on the issue.
11 June: Gurudas Dasgupta alleges that Veerappa Moily has come up with another note for the Cabinet on 27 May, three days after his (that is, Dasgupta’s) expose.
13 June: Moily alleges that opposition to the gas price hike was coming from a ‘powerful lobby’ of importers of crude oil and LNG which did not want India to reduce its imports of oil and gas.
18 June: Dasgupta says the government is going slow on concluding the arbitration proceedings against RIL seeking to recover the penalty of $1 billion (not the cost recovery of $1.46 billion) imposed upon the company (on the advice of the solicitor general of India) when Jaipal Reddy was petroleum minister.
27 June: The government proposes that the administered prices of domestically produced natural gas be doubled to $8.4 per mBtu, the hike to kick in from 1 April 2014.
July:
3 July: Veerappa Moily says that at 80 per cent of income or profit from explorations would come to the government as revenue since 90 per cent of the gas discoveries had been made by the public sector oil companies.
4 July: Chidambaram says that the concerns of the power sector and fertilizer sectors would be addressed before 1 April 2014.
6 July: Petroleum ministry states that RIL will not be the recipient of ‘windfall gains’ as new gas production from the company’s fields would not start before 2017-18. The weak domestic gas production is a result of lower sale price. The Rangarajan Committee guidelines will be vaild for five years from 1 April 2014 after which market discovery price would be adopted on the basis of the roadmap prepared by the Vijay Kelkar headed ‘Committee on Roadmap for Reduction in Import Dependency in Hydrocarbon Sector by 2030’ (appointed by Veerappa Moily).
10 July: Reports of a letter written by the finance ministry asking the petroleum minister to consider placing a cap in the hike of domestic gas.
11 July: Veerappa Moily says that there will be no turning back on the gas price hike.
17 July: EGoM headed by defence minister A. K. Antony meets to consider petroleum ministry proposal to abolish priority ranking in natural gas allocation so that fuel consumed by urea plants can be diverted to fuel-starved gas-based power plants. The EGoM decides to maintain status quo.
27 July: ONGC signs an MoU with RIL to explore the possibility of sharing the latter’s infrastructural facility in the east coast
27 July: Draft report of Standing Committee on Finance chaired by Bharatiya Janata Party leader Yashwant Sinha titled ‘Economic Impact of Revision of Natural Gas Price’ asking the government to review its decision on the price of gas circulated among MPs.
29 July: Gurudas Dasgupta, CPI MP and former power secretary E.A.S. Sarma files a PIL appealing the decision to raise gas prices should be reviewed as the petroleum minister had overruled the opinion of senior officers of his ministry and his predecessor.
August:
13 August: Reports emanate that Giridhar Aramane, joint secretary (exploration) is being relieved of the ‘charge of gas pricing, acquisition of exploration and production assets abroad, all establishment and administrative matters related to ONGC Videsh and unconventional hydrocarbons. The Press Trust of India reports on 16 August that gas pricing to stay with Aramane, the coal-bed methane and shale gas responsibilities to be shifted to the joint secretary, international cooperation and gas pricing.
14 August: Common Cause, a non-governmental organisation dedicated to public causes, and three eminent co-petitioners, former Cabinet Secretary, T.S.R. Subramanian, former Chief of Naval Staff, Admiral (Retd) L Ramdas and former water resources secretary Ramaswamy R. Iyer files a PIL in the Supreme Court asking that mala fide favours to the company and its associates be undone and the collusion between the establishment and RIL be investigated.
26 August: Executive Director RIL, P.M.S. Prasad gives detailed interview to the Economic Times, his first interview at length to any newspaper after his 2009 interview with the Business Standard.
September:
3 September: Prasad of RIL writes to Veerappa Moily saying that neither the PSC nor the field development plan (or investment proposal) even suggest that a shortfall in production can be considered a breach for
which penalties can be levied.
6 September: Supreme Court adjourns hearing of Gurudas Dasgupta’s PIL for six weeks, giving time to the Union government, petroleum minister Veerappa Moily, his ministry and RIL’s partners Niko Resources and the BP group to file their replies.
30 September: Notice issued to RIL, DGH and the CBI by the Supreme Court in the cases filed by Dasgupta and Common Cause.
October:
10 October: Reports surface that MoPNG intends seeking Cabinet approval for a ‘general amnesty scheme’ for oil and gas operators which will allow companies like RIL to retain control over gas fields containing reserves worth up to $10 billion which they had been asked to relinquish for failing to meet deadlines.
November:
2 November: Director general, hydrocarbons, R.N. Choubey of the Indian Administrative Service to be replaced by B.N. Talukdar, former director, exploration in the public sector Oil India Limited.
26 November: At an investor’s meet in Mumbai, Veerappa Moily says that there can be no going back on the decision to raise gas prices.
GAS WARS: CRONY CAPITALISM AND THE AMBANIS Page 57
