CAG cannot do performance audit of RIL, says ministry

Published: 25th October 2012 10:40 PM  |   Last Updated: 25th October 2012 10:40 PM   |  A+A-


India's official auditor will perform a second audit of Reliance Industries' (RIL) spending on KG-D6 gas fields after the petroleum ministry gave the company a written assurance that the exercise would not be a performance audit.

The Comptroller and Auditor General (CAG) has called a meeting, described as Entry Conference, with RIL on Oct 31 to begin the second round of audit, oil ministry sources said Thursday.

According to a letter issued on Tuesday, the government has also informed RIL that the oversight committee on the KG-D6 block has approved all the development plans of the company.

RIL, which is currently preparing plans for boosting output from the flagging KG-D6 field, can now include some more discoveries as part of the complete plan.

The RIL position has been that it is prepared for an audit by the CAG, but only according to Section 1.9 of the production sharing contract (PSC), which allows for only financial audit.

Production from the KG-D6 fields has dropped by over 55 percent to 26 million cubic metres per day instead of rising to planned 80 mmcmd.

The oil Ministry had been withholding approvals to RIL's investment plans saying the company must first agree to CAG doing a second round of audit of KG-D6 field for the 2008-09 to 2011-12 period.

A management committee set up by the government for KG-D6 had on Aug 17 approved the budget of the last three years spent by RIL on the field.

The committee had also approved the revised field development plan for the MA oil and gas field in the same block, but formal orders had not been issued.

The CAG had in its first round of audit questioned the "reasonableness" of the costs incurred in the gas field development and said the government should take a relook at the profit sharing mechanism.


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp