Statement from Reliance Industries
The Hon ble Supreme Court of India has delivered its judgment today in the RNRLRIL
legal dispute.
The judgment recognizes the dominant role of the provisions of the Production
Sharing Contract and has upheld the policies formulated by the Government under
which it has the authority to regulate the production and distribution of natural gas.
The judgment has defined the extent of marketing freedom that RIL enjoys in the
area of sale of natural gas produced. In view of the findings of the judgment, RIL can
sell gas only at the price approved by the Government and only to the entities who
have been allocated gas under the Gas Utilisation Policy. RIL has no ability to
deviate from price, quantity and tenure as determined under Government’s policies,
or to discriminate amongst various consumers.
The judgment of the Hon’ble Supreme Court has set at rest numerous issues which
had been raised in relation to the gas discovered and produced by RIL from the KG
D6 field. RIL sincerely hopes that the clarity of findings of the judgment brings to a
permanent closure the incessant distortion of facts and malicious allegations which
were being leveled against the Government’s policies of regulating and developing
the natural gas sector for the greater good of the people of India and in the interest
of nation’s energy security.
RIL will renegotiate the gas supply agreements with RNRL in the manner and within
the timeframe stipulated by the Hon’ble Supreme Court.
The Hon’ble Supreme Court has, inter-alia, held that:
1. MoU amongst the family of the promoters does not bind the corporate entity
RIL.
2. The terms of the PSC shall have an over-riding effect;
3. The parties must restrict their negotiations within the conditions of the
Government policy, as reflected inter alia by the Gas Utilization Policy and
EGoM decisions.
While the MoU may be kept in mind during the process of renegotiation, it is clearly
held that the MoU is not binding.
RIL has always held that it is bound by the provisions of the PSC and everything
else would be subservient to this overriding agreement with the sovereign. The
Supreme Court has unambiguously upheld this consistent stand of RIL.
RIL would like to assure all its shareholders that it remains committed to creating
value for both shareholders and the nation. We are proud to state that even during
this phase, RIL made investments of over Rs 40,000 crore and created the worldclass
KG D6 asset that India can be truly proud of. This shows our abiding
commitment to creation of strategic assets for the country and value for our
shareholders even in adversity.
RIL wishes to place on record its high appreciation for the efforts and dedication of
thousands of its professionals who have exceeded all expectations and overcome all
obstacles in creating a world class facility at KG D6.
Today we re-dedicate ourselves to our core philosophy of making an even more
weighty contribution to India’s energy security in the years to come. We keenly
realize that adequate availability of energy is a pre-condition for India to achieve
double-digit GDP growth along with equity and large-scale employment creation. RIL
will now work towards setting and reaching ambitious new targets in its energy
business to create wealth for the nation and for its shareholders.
As we look forward with renewed vigor, we thank our shareholders and well-wishers
for having stood by us through the challenging years.
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