Govt to decide on Gas from KG basin

Mumbai: The Government of India would soon decide on which companies would receive natural gas from the Krishna Godavari Basin said Mr R.S. Pandey, Petroleum Secretary.

The gas would be sold according to the gas utilisation policy of the Government with sectors like power and fertilizer plants getting preference.

Mr Pandey said though the schedule of production has to be ascertained, the gas production would be increased in phases. He, however, declined to put any number on the production levels.

Ministry officials would be meeting with Reliance officials soon to discuss the production plan, he said.

Last week, the Bombay High Court had allowed Reliance Industries to sell natural gas from its KG basin block at a Government approved price of $4.20/mmbtu. Mukesh Ambani-controlled Reliance Industries was allowed to sell natural gas to companies other than Anil Ambani-controlled Reliance Natural Resources Ltd (RNRL) till the final judgement is pronounced by the court.

He was speaking on the sidelines of a function organised to pay tribute to the martyrs of 26/11. Mr Murli Deora handed out petroleum product dealerships to the families of army and police personnel killed in the terrorist attacks.

The Petroleum Secretary also said the remaining oil bonds would be issued to oil marketing companies in the first quarter of the next fiscal.
He estimated the total under-recoveries to be around Rs 1 lakh crore.

The Government has been issuing oil bonds to oil marketing companies to help the PSUs tide over the under-recoveries on account of selling petroleum products at administered prices.

The contribution made by oil producing companies such as GAIL and ONGC would be around Rs 32,000 crore, Mr Pandey said.

The Petroleum Minister, Mr Murli Deora, said the Government may help oil PSUs by issuing more oil bonds in case oil prices rise further.