Mandating the Comptroller and Auditor General (CAG) to audit Reliance Industries Ltd. (RIL) KG-D6 and Cairn India’s Rajasthan block and Panna-Mukta-Tapti (PMT) block, the Petroleum Ministry has rejected objections by RIL that the CAG had no powers to carry out such an exercise.
The Principal Director of Audit, Economic and Service Ministries (PDA, ESM) will carry out the audit to cover the financial years 2009-10 and 2011-12 along with financial years 2006-07 and 2008-09 in respect of PMT production-sharing contracts (PSCs) and 2008-09 relating to KG-DWN-98/3 and RJ-On-90/1 PSCs.
Following this, the Petroleum Ministry and the Directorate-General of Hydrocarbons (DGH), on June 13, 2012, advised the operators concerned to provide CAG with documents requisitioned by them, and also allow CAG access to their SAP system.
The DGH has also nominated some nodal officers who would be co-ordinating the entire exercise with the CAG team. The CAG has already held an entry conference for audit of the four blocks — KG-DWN-98/3 and RJ-On-90/1 — for 2008-09 and PMT for 2006-07 to 2008-09 on May 11 this year.
Accounting procedure
RIL insisted that as per section 1.9 of the accounting procedure, the Government was not entitled to conduct audit of the contractor’s accounts and records for the 2008-09 and 2009-10, either through CAG as its representative or a firm of chartered accountants.
However, the Government has stated that as per 25.5 of the PSC and as per section 1.9 of accounting procedure of the PSC, the government has the right to audit records of the contractors in relation of petroleum operations.
