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Oil companies tried to duck audit, says CAG

Anupama Airy, Hindustan Times  New Delhi, June 13, 2011
First Published: 22:34 IST(13/6/2011) | Last Updated: 22:36 IST(13/6/2011)

The Comptroller and Auditor General (CAG) has said that it faced obstacles from private oil and gas companies, some of which operate India's prestigious fields, as it probed accounts to unearth their irregularities.

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The independent government auditor said its work was "interrupted due to difficulties in obtaining access to the records of operators"

The CAG specifically mentioned BG (the former BritishGas) - operated Panna-Mukta-Tapti (PMT) joint venture, in which Reliance Industries and state-controlled ONGC are its partners.

The auditor said the obstacles limited its scope to quantify the financial losses to the exchequer in the PMT operations.

As reported by HT on Monday, the CAG in its draft report to the petroleum ministry on the audit of records of the operators of three major oil and gas fields - including KG-D6 (Reliance Industries), Rajasthan oil field (Cairn Energy) and PMT fields (BG-Reliance-ONGC) had mentioned as "huge" the losses resulting from the violations of contractual provisions by these private operators without exactly quantifying them.

While all three companies including Reliance, Cairn Energy and BG were initially reluctant to share records, it was only after repeated intervention of the petroleum ministry that made Reliance and Cairn share the relevant records, the CAG said.

However, even after that, the PMT venture failed to furnish the required records to the CAG until it wrote its draft report, it added.

Reacting to this, a BG Spokesperson in India said, "All issues related with Production Sharing Contracts (PSCs) are confidential and we are unable to comment on any specific observation raised by the CAG in its audit report."

The CAG report said,  "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," adding that as a result, it could quantify the impact on the government's share of the profit under contractual terms.


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