gundeep
06-11-2007, 08:09 AM
THE Mukesh Ambani firm Reliance Industries (RIL) has offered to sit across the table and resolve the gas controversy with Anil Ambani’s Reliance Natural Resources (RNRL). The move follows a recent Bombay High Court order giving four months’ time to both parties for resolving their differences amicably.
RNRL is believed to have responded to the offer, made last week. Both companies are likely to form a team to negotiate the thorny issues involved in the dispute. In a communication to RIL, RNRL has also sought clarifications on the process, time frame or schedule for discussions and the venue for such meetings.
Spokespersons of both the RIL and RADA groups declined to respond to an email questionnaire on the issue.
While both groups are tight-lipped about the details, people close to the issue say RIL is likely to be represented by its president for petroleum business, PMS Prasad, Sandeep Tandon and LV Merchant, among others.
Similarly, the ADA camp is likely to be represented by Amitabh Jhunjhunwala, Jayarama Prasad Chalasani and Satish Seth, among others. Legal teams from both the group will also participate. Both the groups is likely to indulge in hectic negotiations, which will revolve around the price of gas from RIL’s Krishna Godavari (KG) basin to be delivered to the ADA group for fuelling the proposed 8,000 MW gas-based power plant in Dadri, Uttar Pradesh. The quantity and period of the gas to be supplied is also to be discussed.
During negotiations, RNRL is likely to ask RIL to honour its commitment to supply 28 million metric standard cubic meters per day (mmscmd) of gas (40 mmscmd if the NTPC contract does not materialise) at $2.34 per mmbtu for 17 years as per family arrangement. RNRL also says it has the right over 40% of RIL’s future gas reserves at market prices. However, with gas prices having gone up in the past five years and the government fixing a floor price at $4.2 per mmbtu, RIL may be unwilling to sell at $2.34 per mmbtu.
The venue of the meetings is not yet fixed, but sources point out it could be either Reliance Centre in Ballard Estate (which went to ADA Group following the demerger) or Maker Chambers IV, the corporate headquarters of RIL. Both corporate houses are seeking to resolve the issue as soon as possible because the commercial production of gas is less than three quarters away.
RNRL is believed to have responded to the offer, made last week. Both companies are likely to form a team to negotiate the thorny issues involved in the dispute. In a communication to RIL, RNRL has also sought clarifications on the process, time frame or schedule for discussions and the venue for such meetings.
Spokespersons of both the RIL and RADA groups declined to respond to an email questionnaire on the issue.
While both groups are tight-lipped about the details, people close to the issue say RIL is likely to be represented by its president for petroleum business, PMS Prasad, Sandeep Tandon and LV Merchant, among others.
Similarly, the ADA camp is likely to be represented by Amitabh Jhunjhunwala, Jayarama Prasad Chalasani and Satish Seth, among others. Legal teams from both the group will also participate. Both the groups is likely to indulge in hectic negotiations, which will revolve around the price of gas from RIL’s Krishna Godavari (KG) basin to be delivered to the ADA group for fuelling the proposed 8,000 MW gas-based power plant in Dadri, Uttar Pradesh. The quantity and period of the gas to be supplied is also to be discussed.
During negotiations, RNRL is likely to ask RIL to honour its commitment to supply 28 million metric standard cubic meters per day (mmscmd) of gas (40 mmscmd if the NTPC contract does not materialise) at $2.34 per mmbtu for 17 years as per family arrangement. RNRL also says it has the right over 40% of RIL’s future gas reserves at market prices. However, with gas prices having gone up in the past five years and the government fixing a floor price at $4.2 per mmbtu, RIL may be unwilling to sell at $2.34 per mmbtu.
The venue of the meetings is not yet fixed, but sources point out it could be either Reliance Centre in Ballard Estate (which went to ADA Group following the demerger) or Maker Chambers IV, the corporate headquarters of RIL. Both corporate houses are seeking to resolve the issue as soon as possible because the commercial production of gas is less than three quarters away.