"Considering the production profile drawn up by the DGH and the cost estimates and project schedule as provided by operator (RIL), the project yields a negative Net Present Value of $239 million at the gas price of $4.2 per mmBtu," the DGH told the oil ministry in a note seeking approval for the development plan
New Delhi: Oil regulator Directorate General of Hydrocarbons (DGH) has said that Reliance Industries' (RIL) newer natural gas finds in the eastern offshore KG-D6 block are not economically viable at the government-stipulated price of $4.205 per million metric British thermal units (mmBtu), reports PTI.
Reliance had in December 2009 submitted to the regulator an optimised development plan for four satellite gas fields around the currently producing Dhirubhai-1 and 3 gas fields in the KG-DWN-98/3, or KG-D6, block. It proposed to invest $1.529 billion in producing up to 10 million metric standard cubic metres per day (mmscmd) from the four discoveries in five years' time.
"Considering the production profile (drawn up by the DGH) and the cost estimates and project schedule as provided by operator (Reliance), the project yields a negative Net Present Value of $239 million at the gas price of $4.2 per mmBtu," the DGH told the oil ministry in a note seeking approval for the development plan.
Reliance projected first gas from the Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields in 2016.
The DGH said if royalty is excluded from project cost and capital expenditure is phased over a period of two years before the date of first gas extraction, the project becomes marginally viable.
"The projected total revenue and Net Present Value (NPV) of the cash flow at a 10% discount factor are $2,360 million and $33 million, respectively. The project becomes marginally economically viable," it said.
But royalty in any case has to be paid to the government.
Reliance had in 2007 proposed a price of $4.33 per mmBtu for gas from KG-D6. The government however tweaked the formula and fixed the sale price at $4.205 per mmBtu for the first five years of production.
The DGH has evaluated the new finds in KG-D6 at the government-approved price and did not consider a higher rate that may be fixed in 2014, when the price comes up for review.
Reliance has so far made 18 gas discoveries in the KG-D6 block. It had in July 2008 submitted a field development plan for nine satellite gas discoveries (D-2, D-4, D-6, D-7, D-8, D-16, D-19, D-22 and D-23) with an estimated capex of $5.6 billion and reserves of 1,708 billion cubic feet (BCF).
The DGH, the paper said, carried out techno-economic feasibility studies at a gas price of $4.2 per mmBtu and projected total revenue and NPV at a 10% discount factor at $6.52 billion and negative $2.51 billion, respectively.
The regulator then told Reliance that the development plan needs to be optimised. Reliance submitted the optimised development plan for the four satellite gas fields in end-2009.
Reliance estimated 1,733 BCF of in-place gas reserves in the four finds, of which 626 BCF can be produced. However, the DGH trimmed down the estimates to 1,342 BCF and 617 BCF, respectively.
The CBI plea said besides Mr Raja and two former officials, all others, including DMK Member of Parliament Ms Kanimozhi and three telecom firms should be charged under section 409 (criminal breach) read with 120 B (criminal conspiracy) of the IPC
New Delhi: The Central Bureau of Investigation (CBI) Monday moved a designated special court for slapping the fresh charge of breach of trust by public servants against former telecom minister A Raja and two others in the second generation (2G) spectrum allocation case, reports PTI.
Special public prosecutor UU Lalit filed an application before special CBI Judge OP Saini, saying a case of criminal breach of trust under Section 409 of the Indian Penal Code is "certainly made out" against Mr Raja, his former private secretary RK Chandolia and former telecom secretary Siddharth Behura.
The CBI plea said besides Mr Raja and two former officials, all others, including DMK Member of Parliament Ms Kanimozhi and three telecom firms should be charged under section 409 (criminal breach) read with 120 B (criminal conspiracy) of the IPC.
"It is submitted that accused 1, 2, and 3 (Mr Raja, Mr Behura and Mr Chandolia) were public servants having a dominion over valuable 2G spectrum in their respective capacities as public servants," said the CBI application.
"The said accused public servants in pursuance of conspiracy with other accused dishonestly disposed of the valuable 2G spectrum illegally and in violation of the existing policies and the eligibility criterion in order to confer wrongful gain on accused no. 4 (Swan Telecom promoter Shahid Usman Balwa), 5 (Vinod Goenka), 6 (Swan Telecom), 7 (MD of Unitech Sanjay Chandra) and 8 (Unitech Wireless Tamil Nadu)," the CBI told the court.
"Thus, accused Mr Raja, Mr Behura and Mr Chandolia have committed an offence punishable under section 409 Indian penal Code and all other accused have committed an offence punishable under section 409 read with section 120 B IPC. With the cognisance of this court (they) should be charged accordingly," the application said.
The CBI, in its plea, prayed that "a case of framing of charge under section 409 IPC is certainly made out.
"It is humbly prayed that a charge under section 409 IPC be framed against accused Mr Raja, Mr Behura and Mr Chandolia and charge under section 409 read with 120 B IPC framed against all other accused in addition to the charges already mentioned in the charge sheets filed before this court," the agency said.
Section 409 IPC carries a maximum punishment of imprisonment for life or imprisonment for a term which may extend up to 10 years.
The CBI, in its two charge-sheets against the accused, have booked them for the offences punishable under section 120B, 420, 468 and 471 IPC besides various provisions of the Prevention of Corruption Act.
The defence counsel, however, opposed the CBI's plea saying, "They just want to delay the proceedings of framing of charges against the accused."
Special public prosecutor Mr Lalit submitted the application to the court for slapping fresh charges against 2G scam accused while arguing on a law ministry report which said a firm should have more than 10% stakes in another for being termed its associate, a plea taken by 2G scam accused Reliance Telecom and Swan Telecom.
Law secretary DR Meena, in his report to the Department of Telecom (DoT), had said the term 'associate' could be determined only by applying the 'share-holding' test between telecom firms.