CAG rejects RIL claim on inadequate time for response

Asserting that the Comptroller and Auditor General (CAG) office was in the process of finalising the report on irregularities in KG-D6 blocks and Production Sharing Contracts (PSCs), the Comptroller and Auditor General (CAG), Vinod Rai on Tuesday rejected Reliance Industries Limited’s (RIL) claim that it was not given enough time to respond to observations relating to its KG-D6 gas field.

“We have given RIL enough time to respond. The CAG report is in the process of being finalised,’’ Mr. Vinod Rai said on the sidelines of a function here. RIL had earlier issued a statement that the time allocated to the company by CAG was far too inadequate to answer issues raised in the audit report.

The CAG had on June 27 refuted the charge by RIL that the company had not been consulted before preparing the draft report on the KG-D6 gas fields. This came after RIL raised fingers at the manner in which CAG was conducting the whole audit. “As per the standard practice for all performance audits conducted by the CAG, an entry conference and exit conference is conducted with the audited entity, in this case, the Ministry of Petroleum and Natural Gas,’’ the CAG statement had stated.

“In the case of performance audit on hydrocarbon PSCs, interactive meetings were held with two operators, including RIL, prior to the finalisation of the draft performance audit report. At no stage did this office refuse any operator an opportunity to respond to observations made by us,’’ it said.

The CAG draft report had raised questions about the working of the Petroleum Ministry and the Directorate General of Hydrocarbons (DGH) accusing them of giving undue benefits to RIL at the cost of the public exchequer. It had charged both RIL and Cairn India by allowing them to retain the entire exploration acreage in their oil and gas blocks, turning a blind eye to increases in capital expenditure and giving additional area in violation of the PSC.

The CAG had stated that rules were bent, enabling RIL to retain the entire 7,645-sq. km. KG-D6 block in the Krishna-Godavari Basin, off the East Coast. On July 12, the CAG held an Exit Conference with private firms and the Petroleum Ministry prior to finalising its audit report on RIL’s KG-D6 gas field, Cairn India’s Rajasthan oil block and BG's Panna-Mukta and Tapti oil and gas fields. The conference was held as a prelude to finalising its report on KG-D6 fields and taking comments from the companies on its June 7 draft report.