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The Comptroller & Auditor General of India has taken the Government to task on the D6 gas fields while seemingly letting off Reliance Industries Ltd.
In the much-awaited Performance Audit Report on Hydrocarbon Production Sharing Contracts tabled in the Lok Sabha on Thursday, the CAG has questioned the Petroleum Ministry and the Directorate-General of Hydrocarbons for allowing RIL to retain the entire area of the giant D6 fields. But the report was silent on whether the capital expenditure raised from $2.4 billion to $8.8 billion by the contractor was unjustified or inflated.
On allowing the contractor to retain the area, the report observed that the contractor was allowed to enter second and third exploration phases without relinquishing 25 per cent each of the total contract area at the end of the phases as provided in the production sharing contract (PSC).
Asked about alleged gold plating, Ms Rekha Gupta, Deputy CAG, told reporters that, “Audit terminology does not recognise the term gold plating. Our performance audit is not intended to estimate the quantum of losses. The report is self explanatory on the issue of capital expenditure.”
The report has found deficiencies in compliance with PSC provisions by the Ministry and the DGH with regard to irregular declaration of entire contract area of the RIL operated block as discovery area as well as notification of discovery and submission of test reports.
Asserting that scrutiny of RIL records relating to D6 block was entirely consistent with the provisions of the PSC, the Government auditor contented that it was not making bureaucratised decisions, as stated by RIL, the operator of D6. “Concerns have been raised in certain quarters as to our conducting performance audit of individual blocks and the operations of the contractors/ operators thereof. We take this opportunity to clarify that scope of our performance audit covered the Ministry and the DGH and not the private operators of individual blocks,” she said.
“Consequently, the access to the records of the operators of the selected blocks was only supplementary to the scrutiny of records of the Ministry and DGH,” she added.
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