RIL has scrapped its plan to transfer 80% of its participatory interest in the Krishna Godavari basin gas field to its subsidiaries. According to company source, RIL has raised the requisite financial resources and is no longer pursuing the application for assignment of participating Interest (PI) to the subsidiaries. Evidently, these four subsidiaries were Reliance KG Exploration and Development, Reliance KG D6 E&P, Reliance KG Basin and Reliance E&P KG.

 

However, according to industry observers the move is intended to meet out the challenge of arguments presented by Anil Ambani's lawyer Ram Jethmalani on the issue of supply of power to Reliance Natural Resources (RNRL). Ram in High Court had pleaded for the transfer of RIL’s participating interest in the KG basin to RNRL so that the latter can sell the gas till its proposed 7,800 mega watts (MW) power plant at Dadri comes up.

 

Replying the question, the government counsel TS Doabia had admitted that RIL cannot transfer or assign its PI in favor of any other company without government approval, under the provisions of the production sharing contract. On the other hand, some experts are of opinion that RIL's move could have been partly driven by the criticism of its big shareholders; particularly foreign institutional shareholders have criticized its PI move.