PMS Prasad: we'll make an effort to reach out to RNRL

RIL executive director PMS Prasad, a long-serving hand since the late 1980s, has been the company’s public face all through the gas battle — whether at Court Room No 1 at the Supreme Court, or the corridors of Shastri Bhavan that houses the petroleum ministry. Prasad was present on Friday too as the drama was about to be capped in the Supreme Court. ET caught up with him immediately after the judgement

What is it that came to your mind when the judgement was announced?

Relief! That it’s all over.

Who was the first to congratulate you after the judgement?

My boss Mukesh Ambani. He said it was a good job done and we need to get back to work. I also got a call from Mrs Ambani, who said we have to move on to the next generation of value creation.

How is Monday 9 am going to be different?

It’s going to be a different day. We are relieved of the tension. We have to get down to business and begin negotiations with RNRL.

Is this the best judgement?

Under the given circumstances, one could not hope for a better judgement.

How do you plan to go about negotiating the agreement with RNRL?

We have to negotiate a fresh gas sale and purchase agreement, which has to be bound by the broad parameters laid down by the court. Any fresh gas sales purchase agreement will have to uphold the price approved by the government, honour the utilisation policy of the government and various empowered Group of Ministers’ (eGoM) decisions with regard to utilisation.

What are the parameters that you will need to thrash out with RNRL?

The issues will include other parameters of GSPA like liability, penalty, alternative arrangements for fuel, the quantity of gas, quality of gas, etc. We have already concluded GSPA with several consumers and this GSPA will have to be similar to those.

Did the court mention the family MoU?

Yes. Although the court held the production-sharing contract was supreme, it directed RIL & RNRL to renegotiate in the context of the existing MoU; more like the MoU being a backgrounder under which we could renegotiate. But at all times, it is the supremacy of the PSC and the government decision that have to be kept in mind.

How long will you have to reach that agreement — do you have a timeframe?

We have to go back to the Mumbai HC within six weeks and then if we can mutually agree to a GSPA, it will need to be verified and approved by the government.

Are you saying RNRL & RIL can possibly be business partners where RIL is the gas seller and RNRL the buyer?

Yes! There is every possibility that we will work as partners and we will make a genuine effort to reach out and settle this GSPA in accordance with the court order and government law.

So, what is clear is that you are willing to provide gas at $4.2 mmBtu if the government approves the contract.
Yes, that is the price we will start negotiations at.

What are the key takeaways of today’s verdict?

It is clear that we have to follow all government policies and eGoM decisions and the PSC is the basis for all contracts. Secondly, the court order has also made it clear that the government has the right to determine prices and allocate the gas as per national interests. It has in a way only reaffirmed what the government has been saying. Thirdly, by directing us to renegotiate, but referring to the family MoU, the court has asked both RIL and RNRL to initiate talks and take action within six weeks.

How do you think this order will be received by investors, particularly global oil majors?

We expect the government to come out with a clear policy, which will state all that the verdict has said so that investors have complete confidence in consistency of policies. If companies like Exxon, Chevron and Shell can go to countries like Nigeria or Venezuela where there is so much political uncertainty, there is no reason why investors should not come to India.

Any regrets?

Yes. Too much time was wasted. There is not a single decision that the government has taken in the last seven months. And institutions like the Director General of Hydrocarbons, the petroleum ministry and even the CAG have suffered a huge reputation damage. And as for the advertisements in the newspapers where it was said that the petroleum minister was in RIL pockets.(laughs) I constantly looked for him but didn’t find him. We need to get back to business, value creation and positive thinking.

Source:http://news-views.in/pms-prasad-well-make-an-effort-to-reach-out-to-rnrl/