RIL plans transfer of KG basin stake

Mumbai: Reliance Industries (RIL) has spiked its plans to transfer a slice of its participating interest in the D-6 block of the Krishna-Godavari basin gas field to some of its unlisted subsidiaries.

Reliance, controlled by Mr Mukhesh Ambani, had made an application to the Government in April, seeking permission to “assign a part of our participating interest to our 100 per cent owned subsidiaries”, in order to gain flexibility for raising finances for the project.

The company, in a statement , said, “Our projects are nearing completion and we have successfully raised the finance. So we do not wish to pursue the application seeking approval to assign our participating interest to our subsidiaries and have since withdrawn it”.

RIL had planned to transfer 80 per cent of its participatory interest to four of its unlisted subsidiaries and had sought the Government’s nod, which is mandatory if any contractor wanted to transfer stake in any asset under the production sharing contract.

Sources close to the development said the proposal was cleared by the Directorate General of Hydrocarbon, and had subsequently, moved to the Petroleum Ministry for the final nod. However, the company chose to withdraw the application before the Ministry could take a final call on it.

The sources said the company had been able to raise the required finances for the KG basin’s D-6 block operations internally and through external sources.

However, the timing of RIL’s withdrawal of its application assumes significance in the light of the ongoing legal case between the two Ambani brothers in the Bombay High Court over the gas sharing agreement. In fact, RIL’s announcement of withdrawal of the application coincided with the hearing of the RIL-RNRL case today.

It is also significant that during the last hearing, Anil Ambani-controlled RNRL’s counsel, Mr Ram Jethmalini, had asked for transfer of RIL’s participating interest in the KG Basin to RNRL so that the latter could sell the gas till its proposed power plant at Dadri was ready, in line with the Government policy. RIL is scheduled to commence production from the KG basin within the next two months.