UPA government came under attack when Comptroller and Auditor General (CAG) tabled two high-profile audit reports that could bring attention back to political corruption and misdeeds at the highest levels. The audit reports on Air India and oil exploration contracts, including the one for Reliance’s KG Basin were tabled in Parliament. It was in 1983 that Gas was first struck in Rajole Well No.1 when ONGC had a small office in Rajahmundry and Narsapur that was headed by Iqbal Farooqi. Since that discovery there has been no looking back. Reliance and others are late players in that area, 14 trillion cubic feet of gas by Reliance Industries in KG-DWN-98/l (KG-D6) in 2002.
The CAG report on performance of oil and gas blocks operated by firms including Reliance Industries and Cairn India was tabled in Lok Sabha. The CAG in its report has asked the Oil Ministry to review decision to allow Reliance Industries to retain entire KG-D6 block. It has also called for an indepth review of 10 contracts, including 8 awarded to Aker Group, by Reliance for developing KG-D6 finds. According to the CAG report, RIL did not relinquish 25% of Total Contract Area and violated Production Sharing Pact on KG D6. The CAG report also slammed the Directorate General Hydrocarbons (DGH) for having failed to Pursue Technical Aspects of KG DWL Block. DGH should have stopped RIL from proceeding on D6 Phase 2. In its report on RIL’s KGD6 contract, the CAG stated that the company notified discoveries without details and declared entire contract area as discovery area.
There was lots of noise by rival parties on Manmohan’s role in 2G scam, KG Basin contract, but as the new government came to power the scam is getting diluted due to the involvement of corporate firms which are close to BJP. The role of Prime Minister Manmohan Singh in both the 2G scam and the allocation of the KG Basin gas contracts can be questionable but if we look at another aspect even present Prime Minister Narendra Modi too comes under scanner. On June 26, 2005, then Gujarat Chief Minister Narendra Modi announced that Gujarat State Petroleum Corporation (GSPC), a State government public sector corporation, had discovered India’s biggest gas reserves in the deep waters of the Krishna Godavari (KG) river basin. He said the discovery was 20 trillion cubic feet worth Rs. 2,20,000 crore. It caught the entire nation by surprise. Officials in the Ministry of Petroleum were flummoxed by this bold claim. Modi further, in his characteristic flamboyance, promised the nation that GSPC would start production in December 2007 and make our nation energy independent. It is 2016 now, nearly 11 years since that grandiose announcement by Modi. There has been zero gas recovery from the KG basin, because there is no gas there. GSPC spent Rs. 19,700 crore during this period, ostensibly looking for the missing gas, but recovered nothing. The Comptroller and Auditor-General (CAG) of India has rapped the Gujarat government’s blue chip Gujarat State Petroleum Corporation (GSPC) for its KG basin project, which is yet to see any production of gas, a decade after then CM, Narendra Modi, declared that it had struck “20 TCF gas in the KG basin block” in 2005.
The CAG noted that without any experience and expertise in exploration and production, the company acquired the blocks and then surrendered them, leading to Rs. 2,514.65 crore being written off. The company went ahead acquiring overseas blocks during 2006-10 mainly as an operator with considerably high participating interests without any experience overseas,” the report said, recommending, “risks associated with cost, technology and price realization be properly considered while venturing into exploration and development activities.”
“Out of the 64 blocks on hand as on April 1, 2011, the company surrendered 37 blocks between 2011 to 2015, and wrote off exploration expenditure worth Rs. 2514.65 crore for 29 surrendered blocks. The CAG has slammed the company for “not recovering Rs.2,329.52 crore in dues from joint venture partners.” The two joint venture partners are Geo Global Resources Inc and Jubilant Group. On the KG basin block, where the GSPC has invested Rs 12,249.06 crore between 2011 and 2015, has seen a huge delay in commissioning the project which was supposed to go for commercial production in 2011-12. However, the GSPC and top officials of the Gujarat government have defended the investment in the KG basin on the ground that its “high temperature high pressure (HTHP) area where even British Petroleum (BP) in partnership with Reliance Industries (RIL) is struggling to produce the gas.
Inspite of such big scam Bharatiya Janata Party kept “mum” on the Reliance gas issue in which Mukesh Ambani is among others named in a first information report filed by the Anti-Corruption Branch of the Delhi government. Ambani’s KG basin scam is one of the biggest scams in the country’s history and much bigger than any other scams. It is shocking that Modi and the BJP have remained tight-lipped on the issue. When UPA was in power BJP and CPI (M) made all allegations against Manmohan Singh and UPA when it’s BJP in power all of sudden KG scam became negligible.
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