RIL to appeal against HC''s order

New Delhi: Mukesh Ambani controlled Reliance Industries may appeal this week against the Bombay High Court's interim order on Friday that restrains RIL from selling off part of the gas from its Andhra offshore field which is committed to younger brother Anil Ambani's entities as part of their 2005 demerger pact.

RIL has projected a peak production of 80 million cubic metres of gas per day and has lined up a $5.2 billion investment package.

The HC's order commits half the production figure - 28 million cubic metres a day to Anil's Reliance Natural Resources Ltd and another 12 million cubic metres a day sought to be sold to NTPC but is under litigation. The interim order said the quantity for NTPC will also go to RNRL in case the deal falls through.

HC's order is likely to affect RIL's project financing. The field is outside the company's books and has to generate revenue on its own. Also if RIL is forced to produce only half the field's rated capacity once production starts in June 2008, investors may thus be wary of pumping money into infrastructure for 80 million cubic metres a day of gas when revenue recovery through sale will only be half. This, then, throws up the possibility that the current 80-90 million cubic metres a day gas shortage in the country may continue for the time being.