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| CAG sends RIL gas field audit report to Oil Ministry |
| Press Trust of India / New Delhi Sep 07, 2010, 17:35 IST |
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The Comptroller and Auditor General (CAG) has sent to the Oil Ministry part of its audit finding of the expenditure that Reliance Industries incurred in developing Krishna Godavari basin D6 gas field, which was at the centre of an inflated billing controversy.
"We have compiled part of the report and have sent it to the Petroleum Ministry (for comments). The remaining half would also be done soon. We are waiting for the Ministry's response and then we will finalise our report," a CAG official said.
CAG, which looked into the details of the $8.8 billion incurred by Reliance in producing gas from the nation's largest field, had examined and received replies on its audit comments from the Mukesh Ambani-led firm.
It plans to complete the entire audit process, which will include incorporating oil ministry's comments on its findings, by November.
Asked whether the report would be tabled in Parliament, he said, "We will match our findings with the ministry's observations. If the report has something which the Parliament should know, then we will ask for it to be tabled."
However, he declined to divulge the findings of the CAG in the audit report.
The audit of KG-D6 is not a statutory audit, as is being done in case of public sector firms, hence it is not mandatory to be placed in Parliament.
The CAG's intention of the RIL KG D6 audit was to find out if there was any loss of revenue to the government because of "any improper increase in capital expenditure in the KG-D6 fields", he said.
The government is to get between 10 per cent and 90 per cent of the revenue generated from sale of gas over the life of the field after deducting expenses incurred by the operator (Reliance).
CAG started audit of Krishna Godavari basin D6 field on December 21 last year.
It, however, faced some difficulty in accessing new documents it sought after completing the first round of scrutiny. But within a month, RIL complied and the premier auditor made good progress thereafter.
Oil Ministry asked CAG to audit the accounts of RIL, which faced allegations of gold-plating gas field costs that had increased four-fold to $8.8 billion.
RIL agreed on August 17, 2009, to an audit by CAG but the nation's premier auditor could put its house in order for the audit only by December.
CAG's scope of audit of PSC was in respect of the block KG-DWN-98/3 (KG-D6) awarded to RIL, for two financial years -- 2006-07 and 2007-08, with access to records of previous years linked to transactions of these years.
Sources said while the ministry wanted special audit of accounts from 2003-04 fiscal, CAG wanted the scope of examination of records be restricted to 2006-07 and 2007-08 only.
The government in 2002 asked CAG to audit PSCs like the one for KG-D6 block with RIL, but the premier auditor had then stated that its charter neither permitted audit of private accounts nor did it have the manpower to do so.
Subsequently, the government with the concurrence of CAG, appointed independent third-party auditors on the basis of an open bidding process.
These auditors have audited accounts of companies like RIL. However, in 2007, CAG was asked to audit the exploration spending and the agency has now completed the audit.
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