Rajeev Jayaswal - The Lobbyists: Untold Story of Oil Gas and Energy Sector

THE LOBBYISTS

THE LOBBYISTS

THE UNTOLD STORY OF OIL, GAS AND ENERGY SECTOR

Rajeev Jayaswal

First published in India 2016

2016 by Rajeev Jayaswal

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This book may disappoint you if you have prejudged the rise and fall of Indian oil and gas sector, because of some corporates. According to this book that was only the half truth. In fact, the real reason was hidden in a series of events that had unfolded between 2004 and 2014. This book is an attempt to provide the other half of the truth, which politicians, corporates and civil societies did not want us to know, because it did not serve their purpose.

An event that gave me confidence to write this book was a Supreme Court Order dated October 17, 2013, pertaining to Ratan N. Tata Versus Union of India and others. According to this order, the Central Bureau of Investigation (CBI) had scanned thousands of call records of lobbyist Niira Radia and acknowledged efforts of only one journalist that was Mr Jayaswal. Incidentally, I was that journalist.

It was quite surprising because I had never spoken to Niira Radia. So, there was no question of finding my voice in those tapes. Yes, I had heard tapes available in public domain and found the mention of my name during conversations between Radia and others. I had sources everywhere, but not with lobbyists or paper-traders.

The Exuberance

It was dawn of early 2004. Mike sniffer Watts of Cairn Energy Plc was hoping against hope. He was aware that this could be his last chance. The company was on the verge of winding up its Rajasthan desert safari after sinking millions of dollars in drilling one-and-a-half dozen dry wells. Investors were increasingly getting weary which made Watts little nervous. But, the exploration director was confident about his hunch. He was keeping his fingers crossed.

God heard him. A person tracking logs found traces of oil in the heaps of geological data coming from the well that was being drilled in the desert. The sniffer had found black gold.

This was a unique case where David outsmarted Goliath. Just about two years ago, Cairn had bought out its partner, Royal Dutch Shell from the Rajasthan exploration block for a paltry sum of US$7.25 million. Shell had decided to quit after drilling three dry wells. But, what the global oil major could not achieve was done by a small Scottish firm.

The companys share instantly jumped 50 per cent on the news of Mangala discovery in January 2004. Two months later, it announced the second discovery and its share rose by another 21 per cent. Soon, it became a FTSE 100 company. Company executives say that the second discovery was named Aishwarya after the famous Bollywood actress.

Mangala was not only Indias biggest onland oilfield discovery, but it was also the countrys first major oil find in about two decades. Cairn rewarded Dr Watts with a bonus of an amount equal to his annual salary for the exploration success.

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But, gas comes out before oil. The Scottish success had followed the Indian legend of 2002. Two years ago, Reliance Industries Ltd (RIL) had announced major gas discoveries in its Krishna-Godavari basin block, popularly known as KG-D6. This was termed as the worlds largest gas find in 2002. The genesis of the discovery laid in the resolve of RIL founder Dhirubhai H. Ambani that natural treasures from beneath the land and the oceans would enrich India.

People close to Dhirubhai often talk about his belief that god couldnt be unfair to India while distributing natural resources. Overwhelmed by the achievement, Mukesh Ambani told Reliance shareholders at the annual general meeting on October 31, 2002: This new discovery is a living testimony to the farsightedness of that great visionary, Shri Dhirubhai Ambani, son of a school teacher from a remote village in Saurashtra, Gujarat, who has done India proud.

Bharatiya Janata Party (BJP) leader and former Oil Minister Ram Naik, who had witnessed the two discoveries during the NDA regime, said during a meeting days before the 2014 general elections that he was a satisfied man as the two major discoveries took place during his tenure.

Manmohan Singh Government inherited from us a stable petroleum sector that could attract huge investments, he said while sipping a cup of tea at the Maharashtra Sadan, New Delhi. He had come to Delhi to attend some personal function and I had paid a courtesy visit to him along with another journalist from a leading Hindi newspaper.

The Gloom

The two successive major gas and oil discoveries startled global energy exporters. For them, India was the fourth largest market after USA, China and Japan (now third as India surpassed Japan); having an annual appetite of about US$160 billion. Oil producers and traders were breathlessly watching developments around the Indian sedimentary basins, mainly because India imported about 80 per cent of crude oil it processed; and its increasing independence could upset the international oil trade balance.

The United States had already surpassed Saudi Arabia in terms of oil production and China was the fourth biggest petroleum producer after Saudi Arabia and Russia. Unkike Japan and India, the United States and China were fully secured. India and Japan lacked resources, hence, were largely dependent on imports. They were the two largest oil consumers and their proportional energy independence would mean proportional shrinkage of the lucrative oil market.

Indias oil and gas sector was initially hit by American interference. Later, re-interpretation of contractual provisions because of the family dispute between Ambani brothers dampened the investors sentiment. The sectors regress did not stop at that. The third phase saw a complete policy paralysis. Its impact would live for decades. It was well described by Coal Secretary Anil Swarup in a recent interview to The Times of India, Why blame only netas, 5Cs also hinder decision making. He described the 5Cs as Central Vigilance Commission (CVC), Central Information Commission (CIC), Central Bureau of Investigation (CBI), Comptroller and Auditor General of India (CAG) and courts.