K. Sibal on the dispute over Krishna-Godavari gas, for which Reliance Natural Resources of Anil Ambani and his elder brother's Reliance Industries are fighting a bitter legal battle.

Going further, Chalasani said the initial output of the gas from Krishna Godavari basin was estimated at 40 million units a day, and based on that, the capital expenditure was pegged at Rs.12,000 crore (around $2.5 billion).

Subsequently, two years later, when the estimate of gas production was raised to 80 million units a day, the capital expenditure was pegged 268 percent higher at Rs.45,000 crore (nearly $9 billion), said the Anil Ambani group executive.

'Let us go beyond and see the reasonability of this. Normally when you see any production that goes up from 40 million units to 80 million, due to the economy of size, the capital expenditure will not get doubled - it will be more than 100 percent but below 200 percent.'

He also questioned the position held by the regulator that inflating the capital expenditure does not benefit any stakeholder - neither the contractor, nor the government.

Contrary to that, Chalasani said, Reliance Industries is entitled to first recover its entire capital expenditure, based on the production-sharing contract, before the government gets any meaningful share of the reserves.

'As a result of higher capital expenditure, the government's share gets reduced and the government's share gets delayed.'