In an indication that all is not well within the Petroleum and Natural Gas Ministry and the functioning of the private operators, the Comptroller and Auditor General (CAG) has stated that its audit faced interruptions, non-cooperation and difficulties in obtaining the records of the operators for scrutiny.

Making detailed comments on the hurdles created in its path for a smooth audit, the CAG stated that despite repeated efforts, the Panna Mukta Tapti Joint Venture (PMT JV – joint operators BGEPIL, RIL and ONGC) did not provide “important and relevant” records on the ground that scrutiny of these records did not fall within the audit scope of the CAG, which they said was limited to accounting records in terms of the PSC (Production Sharing Contract) provisions.

“The PMT JV did not respond to the majority of our preliminary observation memos, on the ground that the issues therein were outside the scope of audit rights envisaged in the PSC,” the draft report has stated.

“We do not agree at all with the ‘misleading interpretation' of both the PSC provisions and our audit scope by the PMT JV. Further, we believe these records were essential to meet the audit objectives, notably verifying whether GoI's financial interests were adequately protected. In the absence of these records, we are unable to vouchsafe the reliability of the expenditure stated to have been incurred by the PMT JV during 2006-07 and 2007-08. Consequently, the impact on government take (current/future), if any, could not be quantified,” it stated.

Interestingly, going further, the CAG has recommended that keeping in view the nature of the (investment multiplier) IM-based profit sharing formula, and the severely adverse implications on GoI's financial interests of any incremental capital expenditure, that pending complete submission of all supporting records relating to expenditure for 2006-07 and 2007-08 and comprehensive and detailed scrutiny thereof to verify that GoI's financial interests have not been adversely affected in any way, the Government closely and carefully consider the desirability of any further approvals of capital expenditure through the Annual Work Programme and Budget, Development Plans or otherwise, except on an emergent nature.

The CAG has also listed the records that were not provided to it. The premier audit agency has also listed the delays and interruptions in a chronological manner indicating the hurdles created by private operators and Ministry officials at various levels.