International BusinessProduction contracts shouldn't be tweaked by anyone: RIL
Energy major Reliance Industries today said that Production Sharing Contracts (PSCs) like the one it had signed for KG-D6 fields with the government should not be tampered with by anyone to maintain their credibility.
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Addressing a conference on natural gas, RIL President (International Operations) Atul Chandra said exploration was a very high risk business and any modification in the PSCs - under which operators like RIL explore for oil and gas and get paid for their effort - would lead to loss of faith in the system.
His comments assume significance in view of the ongoing tussle between the Ambani brothers, Mukesh and Anil, over supply of gas from RIL"s KG-D6 fields.
While Mukesh Ambani-led RIL says it is just a contractor under the PSC that also gives the government the right to approve gas sale price and fix users, younger brother Anil-run RRNL says the government role was limited only for the purpose of valuation of the gas and RIL had full marketing freedom.
Chandra said the PSC system in India was based on global industry practice where companies take the risk of investing in areas with no discoveries.
If they don"t find any oil and gas, the money they spent is written off. But in case of a discovery, the hydrocarbon produced is shared between the companies and the government.
RIL, he said, was producing about 50 million standard cubic meters per day of gas from two fields in KG-D6 block and the output is expected to touch 80 mmscmd shortly.