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The Reliance Albatross Around Firstpost’s Neck On Display Yet Again

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The Reliance Albatross Around Firstpost’s Neck On Display Yet Again

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No prizes for guessing where you won’t find any news on the latest in the ONGC-Reliance gas feud.

 

This is a screenshot of the Firstpost Business page on the evening of October 8. The lead article shown here began thus: “Last weekend the top-notch buyer for India, Messrs Petronet LNG Ltd, broke its 25-year LNG supply contract with Qatar.”

 

The article went on to explain why Petronet had reneged on a contract with Qatar in spite of the prospect of a diplomatic embarrassment for the government: “Buying LNG from the distressed spot market was around 40 percent cheaper for the company willing them to risk steep penalties for breaking their steel clad long-term contracts with Qatar.”

 

And then the article came to its main point: “By artificially suppressing domestic gas price, the government of India only ended up with more loss to exchequer in royalty and cess along with a depressed investment climate. Left to the souks of the world to decide, India would by now have a rational, equitable and affordable gas price as it happened in oil.”

 

Consider the facts: Firstpost in owned by Network18, which is now in the hands of Reliance Industries. If you scratch your memory, you will remember that Reliance was in the eye of a storm in February 2014 when Arvind Kejriwal had come out with damning allegations of corruption against the company in the pricing of gas that it drills out of the KG-D6 basin. This NDTV article explains that controversy.

 

For Firstpost to run an article claiming that the government’s gas policy has been detrimental to India’s interests, without any mention of the misdeeds in the gas sector committed by the website’s owner, is a blatant conflict of interest. No mention of Reliance’s interests in the gas sector is made in the article.

 

But here is another thing. One of the major business stories of October 8 was a report by D&M, an international consultant, which raised questions on the gas extracted by Reliance in KG-D6. As per a report in Mint, “D&M… in the preliminary observations stated that some 11.9 billion cubic meters (bcm) of gas belonging to ONGC may have been produced from RIL’s KG-D6 field. According to D&M, RIL had drawn 58.67 bcm of gas from the wells up to 31 March 2015, out of which 11.9 bcm may belong to ONGC. It is likely to submit its report on the issue by next month.”

 

On the back of this news, the stock price of Reliance Industries fell 3 per cent in Thursday’s trades and the buzz in the business press was whether the gas extracted by Reliance from ONGC’s wells was pilferage or an unwitting error.

 

The Economic Times quoted Piyush Jain of Morningstar, an investment research firm: “It [resolving the issue] is not going to be easy despite the expert committee. It will be a complicated task for the government, because that block is adjoining block between ONGC and RIL, and the dynamics are quite interrelated. It will be very difficult to establish whether it was because of the gas pressure or something that was deliberately done by Reliance Industries.”

 

In Financial Express, Sunil Jain tackled the question of compensation that Reliance would need to pay ONGC: “The issue of compensation, at the end of the day, has to depend upon the investments made. After all, if ONGC had also invested Rs 40,000 crore – its current draft investment plan for one part of the field is in the region of $7 bn – to develop the field, what would matter is the profit it would have made per unit of gas after netting out the cost of capital and various royalties to be paid to the government. Since RIL argues it has not made profits on its investment so far, the resolution is going to be that much tougher for the ministry.”

 

On ET Now, this was the main story in the afternoon of October 8, with the channel’s Nikunj Dalmia and Ayesha Faridi discussing the issue with former ONGC chairman RS Sharma. Sharma has long maintained that ONGC’s claims in the matter be accorded due importance. Krishn Kaushik, who did a cover story on ONGC for the Caravan last July, wrote in his piece: “Two former ONGC chairmen, RS Sharma and Sudhir Vasudeva, told me this [drawing gas from an adjacent site] was geologically possible. Sharma pointed out that it has happened in the past between sovereign nations—including Kuwait and Iraq, where it led to war.”

 

Since the story goes to the heart of Reliance’s find in KG-D6, it no doubt merited all-round national coverage. Yet, Firstpost was completely silent on the issue. Not only did the business page on the website have no links to this story, it chose to run a story that showed the government in poor light on the gas price discovery mechanism.

 

This is not the first time that questions have been raised on Firstpost’s independence. An editorial critical of Finance Minister Arun Jaitley was taken down from the website on August 2. The editorial had been written by editor-in-chief R Jagannathan. With this latest incident of selective – and, in the circumstances, one-sided — reportage, more questions are likely to be raised on the ill effects of big corporate houses taking over news organisations.

 

This article was republished from Newslaundry.com.

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The author can be contacted on Twitter @VohariJikram

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