Sunday, February 16, 2014

The Pricing of GAS at KG Basin

All State or Government owned Companies are bound by very strict rules to become successful in Drilling in Exploratory areas as granted to it by the Government where taking of risk is a order of the day being the formations encountered while drilling are often unknown which require making of frequent deviations from normal procedures to become successful in Exploration within a particular area as assigned to it through carrying out successful Drilling of wells up-to the Target depth. In ‘Tanot Area’ at the district of Jaisalmer’; ONGC attempted to drill many wells for nearly 25 years{during the base year 1989} without success, due to complex nature of formations encountered during Drilling Operation; being the area was located nearer to ‘Sui Gas Field’ in Pakistan, so also ‘OIL’ while doing so but for a few years. Accordingly, I was transferred to ‘Rajasthan Project’ during late 1989 to supervise the Field where Drilling Operation was carried out by a hired Drilling Rig operated by ‘Deutag’, a German Company having a fleet of about 250 Rigs all across the Globe. Being within the area, I took the opportunity of looking after both the operations of ‘OIL’ as well as ‘ONGC’ {indirectly} to drill rest of all wells successfully {with100% Success}.

The ‘Rig move’ time allowed to the contractor was 30 days between 2 Locations as per contract which too was found short by the contractor for moving 2500 HP rig within time due to bad condition of Roads. After I took over; I taught the Contractor, the trick of moving the Rig in just 5/ 6 day’s time instead of stipulated 30 days. While it saved 25 days of idle time of the Rig to earn more by the contractor; ‘OIL’ too could able to drill an extra well (the deepest well} saving a handsome of @10 cr. amount to the Company by drilling the said extra well within the currency of the same contract wherein both parties gained {The Company had stopped hiring another rig to drill the said well}. Following expiry of the Contract; we switched to all Indian Contractors with Rupee payment option. This is called mutual benefit earned by both the Contractor as well as by the Company.

As far as pricing of Gas at KG Basin is concerned; since Reliance Industries is an Indian Company; our choosing to pay the Contractor in Dollars is possibly wrong. Furthermore, hiking of Gas price after a gap is dangerous as the Contractor concerned shall try its best to hide facts about holding of production from the wells from the Government to increase the profit margin or deviate from the procedure from the normal pattern of production of Gas by the operator to secure a gain. While it is not exactly an afar decision by a particular contractor {being it might possibly be followed by all everywhere under such a situation or having such an arrangement}; it might damage the Field to a large extent which is a direct loss of the National wealth; even though we might able to compensate it through drilling more wells in and around the area. However, if the operator is engaging Rigs from abroad, asking for Dollar payment towards bearing its cost may be justified as a part of payment option agreement with the Contractor.

ONGC & OIL are PSUs. Therefore, whatever sum incurred by the Government for maintaining the said two entities shall return to the Country or to the Tax Payers either as cash or commodity; spent under the Hawkeye of CAG. However, in case of Reliance, the Profit earned by it, is beyond Scrutiny by any Government Agencies to know of how and for what purpose it is being used. China adopted exactly the same strategy to fund all Business Houses in its own currency, irrespective of whether or not it is Big enough to build huge Foreign Reserve in the tune of ‘Trillions’ for the purpose of claiming a Powerful Position within Globe Financially; which however worked reverse to force the entire us to face the current situation or consequence of it everywhere within the Globe. Earlier Reliance or its sister Concern too intended to use the Fund for its expansion. Such allowing of desire of one to expand limitlessly not only bad to oneself but is a threat to the entire humanity being it is nothing but granting of a Power to an outside entity with the backing from the concerned Government. Since it is an elementary knowledge; it requires no further elaboration.                                                           

Once the M.O.U is signed we are govern by it up-to the length of time, we had indicted mutually to do so for doing of a Business. Therefore, all those who were or are involved in the matter are answerable for ignoring the basic requirement that govern doing of a Business between two Parties of whatever nature to cause us damage which is beyond repair. By saying so, we (I) are criticizing ourselves (myself) only and none else for ignoring the well health of ourselves (self) to remain sound all the time, standing on one’s feet. This is certainly an act exactly opposite to that of the action taken against a particular wireless Operator most recently by us.  


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