CAG not given full access to RIL's KG-D6 records

Last Updated: Tue, Dec 11, 2012 16:40 hrs

New Delhi, Dec 11 (IANS) Since full access by Reliance Industries (RIL) to KG-D6 block records was pending, the national auditor has asked the petroleum ministry to examine all issues carefully before considering any more approvals for capital expenditure, Petroleum Minister M. Veerappa Moily said Tuesday.

In a written reply to parliament, the petroleum minister said that RIL had not granted full access to KG-D6 block records to the Comptroller and Auditor General (CAG).

The CAG had recommended that pending complete submission of all supporting records by operators of Panna-Mukta-Tapti (PMT) and KG-D6 relating to expenditure for previous years up to 2011-12 and a detailed scrutiny to verify that government's financial interests have not been adversely affected in any way, the ministry may examine all relevant issues carefully before considering the "desirability of any further approvals" of capital expenditure "except those of an emergent nature."

Moily clarified that the CAG had not asked petroleum ministry to withhold approvals to RIL.

The oil minister informed the Rajya Sabha that RIL had agreed to audit by the CAG for block KG-DWN-98/3 for the years 2008-09 to 2011-12 without prejudice to the rights and contentions of the contractor under the contractual provisions.

Moily said the government had directed the RIL to provide access to all records, accounts, documents of the block to CAG as per Production Sharing Contract (PSC) and extant legal framework.

Meanwhile, an official of the petroleum ministry told mediapersons here that the CAG has agreed to restrict its audit of KG-D6 block gas fields to financial scrutiny of the spendings and a performance audit, if any, would be done by the ministry.

"CAG had a few days back given to us in writing that the audit of Block KG-DWN-98/3 (KG-D6) will be strictly as per Section 1.9 of the Accounting Procedure to the Production Sharing Contract," the official said, declining to be named.

The PSC provides for a financial audit but not a performance audit that scrutinises efficacies of processes or technology used in the deep sea operations.

"CAG has agreed for a financial audit (of RIL's KG-D6 spendings) and a performance audit if it has to be conducted, will be done by the Petroleum Ministry and the Directorate General of Hydrocarbons (DGH)," the official said.

The CAG is also likely to examine whether the government's profit take from KG-D6, and its subsidy output on power and fertiliser, increased on account of use of imported LNG owing to KG-D6 output of just 23 million standard cubic metres per day (mmscmd) not matching the projected output of 80 mmscmd.

The official source said that through the performance audit of the ministry and the DGH, the CAG would properly scrutinise all documents, records, financial statements, and would seek documents from RIL in this regard.

The CAG has clarified that the audit would not be for internal consumption, as demanded by RIL, and the report would be presented to parliament for scrutiny.

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