Sujay Mehdudia

NEW DELHI: Amid the bitter battle between the Ambani siblings over the KG Basin gas distribution, the Petroleum and Natural Gas Ministry has written to the Prime Minister’s Office (PMO) that the Memorandum of Understanding (MoU) between Mukesh Ambani and Anil Ambani would “harm” public interest.

The Ministry was responding to comments sought by the PMO on the letter written by Reliance Natural Resources Limited (RNRL) chairman Anil Ambani on July 15 accusing the Ministry of favouring Reliance Industries Limited.

Mr. Ambani had sought the intervention of Prime Minister Manmohan Singh.

Meanwhile, an RNRL statement here said: “It is our considered view that the Petroleum Ministry continues to misguide all concerned including the PMO by hiding, misquoting and misrepresenting facts. As we have communicated earlier and reiterated, the Petroleum Ministry was in full knowledge of the details of the gas supply arrangements between the RIL and the RNRL way back in June 2006, if not earlier. Copy of the gas supply agreement was duly submitted by us to the Petroleum Ministry in June 2006. The Petroleum Ministry’s repeated stand that they have come to know about this arrangement only now is inexplicable and untenable.”

Further, the statement said: “The Petroleum Ministry is of the firm view that gas supply arrangements between the RIL and the RNRL are against the provisions of the Production Sharing Contract (PSC). If the Petroleum Ministry is firmly convinced of the facts, it is within their powers under the provisions of the PSC to terminate the PSC it has signed with the RIL. The RIL-RNRL agreement was fully compliant with the PSC. The Bombay High Court has held that the RIL can fulfil its obligation to the RNRL in compliance with the PSC.”

The Ministry is understood to have stated that the part of the MoU that divides the gas found by RIL between the two brothers was against public interest, flouts government authority and will set a wrong precedent. It has written to the PMO that the family MoU was clearly against the provisions of the PSC. “Any private arrangement to distribute natural gas for private business plans is nothing but monopolising a vital natural resource and will set a bad precedent under which production from other fields may also be appropriated.”