CAIRN: 'Mike' Ashar wants his Ravva money

Vol 18, PW 15 (26 Mar 15) People & Policy
     

Nowhere is the paralysis and inertia in Indian decision-making more evident than in Cairn’s long-running battle with the oil ministry and GAIL over payment for Ravva gas sales.

Seven long years after GAIL agreed to revise the Ravva gas price north from $3.50/mmbtu in a sales contract that expired on December 1, 2008, there’s scant progress to report, with the oil ministry and GAIL heaping blame on each other for the logjam. GAIL meanwhile continues to charge customers $4.20/mmbtu for Ravva gas but pays the Cairn-led consortium $3.50/mmbtu; the balance $0.70 is deposited in a ‘gas pool account’ that no one can touch.

Frustrated Mayank ‘Mike’ Ashar, Cairn CEO, is so upset he wrote a stinging letter to oil secretary Saurabh Chandra on March 2 cataloguing countless meetings and correspondence that have done little to support prime minister Narendra Modi’s vision of an ‘investment friendly’ India. “These issues have been time and again highlighted to your office,” Ashar tells Chandra, curtly.

“Despite the oil ministry’s advice to GAIL to revise the gas price to $4.20/mmbtu the same has not been implemented.” Ashar adds: “It is disappointing that the outstanding payments are deposited in the ‘gas pool account’ and not paid to the (Ravva) gas producers.

” Ashar’s blunt letter is copied to GAIL director marketing Prabhat Singh and joint secretary exploration UP Singh.

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