AAMAADMIPARTY ALLEGES ANOTHER UPA SCAM IN THE MAKING – #Veerappa Moily’s $9.2 billion ( Rs. 52,000 crore ) gift to #Essar Oil Limited …

ANOTHER UPA SCAM IN THE MAKING:: MOILY SEEKS TO CASH IN BEFORE EXIT

VeerappaMoily’s $9.2 billion ( Rs. 52,000 crore ) gift to Essar Oil Limited

Background
Ratna and R-series is a discovered medium sized oil and gas field on western off-shore around 130 km south west of Mumbai. This field has estimated cumulative oil production of 12.33 million metric tonnes and 1285 mmscm of natural gas over a project life of 22 years. At current prices of $100 per barrel of oil and $4.2 per mmbtu of natural gas the value is $9 billion and $189 million respectively, totalling $9.2 billion.

Bidding was initiated in 1993 and Essar Oil and Premier Oil Ltd were the successful bidders and were given only the Letter of award in 1996. The contract was not signed. The contract negotiations with the bidders could not start due to CAG observations and CBI investigations on the contracts awarded to other parties. The issue at hand is whether the field can be given to Essar even though the bid conditions are 18 years old and the price of oil has increased 6 times in this period, given the fact that the contract was never signed.

In 1999, a Negotiating Team of Secretaries (NTS) was formed with members from Finance, Law and Petroleum Ministries. This NTS held several meetings from 1999 to 2013; however the matter could not be concluded.

The matter was also referred to Cabinet Secretariat in 2008 wherein it was stated that ( page 118 of Essar cabinet note 1, Annexure A):

Thus the Cabinet Secretary had in the year 2008 itself warned that there would be a huge revenue loss for the government and that the contract had not been duly concluded.
The Finance Secretary in two letters dated 17.11.2011 and 13.2.2012 also reiterated these views ( page 121 of Essar cabinet note 1):

The matter was also referred to the SG, AG and the Law Ministry a number of times over the years. Finally, the Law Minister opined in October 2012 that ( page 120 of Essar cabinet note 1):

First Cabinet Note

In this background the officers of Petroleum Ministry, the Joint Secretary ( Exploration) and the Petroleum Secretary, prepared a cabinet note recommending that the block should either be re-auctioned or it could be given back to ONGC, on the ground that contract had not been concluded and also the fact that government would lose billions of dollars if it was done. Detailed reasoning for this was also provided ( page 124 of Essar cabinet note 1):

It was also pointed out that this was consistent with the position of the government in the Coalgate matter wherein the AG had argued before Supreme Court ( page 125 of Essar cabinet note 1):

The Petroleum Minister, ShriVeeraapaMoily overruled the officials on dubious grounds and ordered that ( page 1 of Essar Minister order 1, Annexure B):

He also opined that :

He finally directed that the option of giving the field back to Essar be included in the Cabinet note. It is very strange that when the Law Minister had himself clearly stated that the Petroleum Ministry may decide the matter upon its own assessment keeping public interest in view, the Petroleum Minister took it upon himself to pronounce the verdict that the contract was concluded. He further ignored all the recommendations not only of his own senior officials, but also those of the Cabinet Secretary and the Finance Secretary, as pointed out above.

Second Cabinet Note

Based on the orders of the Petroleum Minister, a second cabinet note was prepared, wherein the option of giving the field to Essar was also included. However, all the earlier issues were also highlighted in the present Cabinet note as well by the officers of the ministry. In addition, the windfall gain to Essar, totalling $1.8 billion, if the field was handed over to him was also highlighted ( page 168 of Essar cabinet note 2, Annexure C):

During the inter-ministerial consultation that followed, the proposal to cancel the contract was supported by all the three departments that were consulted; Finance, Planning Commission and Law. Finance opinion was as follows ( page 170 of Essar cabinet note 2):

The matter was also referred to the AG who gave his opinion on 13.3.2014 ( page 1 of AG opinion,

Annexure D):

Even though he admitted that the contract was not signed, he gave a very ambiguous opinion and did not state conclusively whether the contract had been concluded. Examination of the views of AG show that para 5 &13 and para 12 are contradictory This opinion also is contrary to the view the same AG has taken in the Coalgate hearing before the Supreme Court. The use of convenient and often dishonest opinion of law officers as a cover for corrupt decisions of the Government has become the most favoured modus operandi of this UPA government. The same AG has been found to have given such convenient and indeed dishonest opinions earlier in the 2G scam to Mr. Raja (used by him to justify the tampering with first come first served), the diversion of coal by Reliance from the Sasan block which the CAG has found to be Rs 29,000 crore scam.

The officers of the Ministry again re-iterated their view that the contract had not been concluded( page 172 of Essar cabinet note 2):

The response of the Petroleum Minister to this note shows the brazenness with which he has been acting ( page 2 of Essar Minister order 2, Annexure E) :

Even though the AG had left some room for ambiguity by stating that the Ministry could come back to him if it did not agree with his views, the Petroleum Minister gave a categorical finding on the question overruling all his senior officers in the process.

He also rubbished the huge financial losses to the government by a casual remark that it would be considered appropriately by the CCEA. He has then ordered that the CCEA note be reworked and all the inconvenient portions be removed from the cabinet note.

Conclusion
This is another mind boggling scam being executed by the Petroleum Minister during the middle of elections. A field that was put out for bidding in 1993, 21 years back, and has not been concluded till date, is sought to be handed over to Essar on a platter on the eve of elections. In fact this decision at this time would be a violation of the medel code of conduct and ought to be stopped by the Election Commission just as they stopped the decision to double the gas prices to paid to Reliance that was to come into effect from 1.4.14 It should be noted that the reserves are valued at Rs. 52,000 crore and would increase substantially after further exploration takes place. Moily is using the ambiguous opinion of the AG to overrule the opinion of the Cabinet Secretary, Finance Ministry, Petroleum Secretary, Planning Commission and the earlier opinion of the Law Minister. This needs to be stopped immediately and a detailed investigation by a court-monitored SIT to uncover the conspiracy to hand over natural assets of the country to suspect and favoured corporates.