RIL gas production cost comparable with others: DGH

In a strong rebuttal to Anil Ambani Group's claim that it had approved inflated cost quoted by Reliance Industries (RIL) to develop gas fields, sector regulator Directorate General of Hydrocarbons (DGH) today said the cost of production even after higher capex was comparable to any other field in the country.

The cost of production for Dhirubhai 1 and 3 fields at the approved field development cost of $8.836 billion came to $1.28 per million British thermal unit, said V K Sibal, director general, DGH.

This compares to the $1.25 per mmBtu cost of production of gas from Tapti field operated by BG Group of UK and $ 1.12 per mmBtu cost of gas production from Hazira field of Niko Resources of Canada. The D6 cost of production was lower than $2.86 per mmBtu cost of producing gas of state-run Oil and Natural Gas Corp (ONGC) and $1.59 per mmBtu of Oil India.

Reliance Power CEO J P Chalsani today claimed that inflated capex would result in up to Rs 30,000 crore lesser revenues to the government.

Sibal said world over exploration and development is not judged by the capital expenditure incurred but by the actual cost of production.

"I don't want to join issues with them but you should let people who know this subject decide on the issue," he said. "If Rs 45,000 crore capital expenditure claimed by them was inflated, the cost of production in terms of cost per million British thermal unit would also come higher."