Accessing BG books most taxing, Cairn easiest: CAG
Government auditor CAG, which for the first time was asked to scrutinise books of three private oil firms, found it most difficult to access the records of UK's BG Group, while Cairn India was the most forthcoming, a top official at the premier body said.business Updated: Aug 22, 2010 10:54 IST
Government auditor CAG, which for the first time was asked to scrutinise books of three private oil firms, found it most difficult to access the records of UK's BG Group, while Cairn India was the most forthcoming, a top official at the premier body said.
The Government had asked Comptroller and Auditor General (CAG) on November 13, 2007 to undertake a special audit of BG Group-operated Panna-Mukta and Tapti fields, Reliance Industries' KG-DWN-98/3 (KG-D6) block and Cairn India's giant Rajasthan block RJ-ON-90/1.
"We faced maximum difficulty in getting access to the books of BG (Group), while we faced the least problem with Cairn," the official told PTI in New Delhi.
While the the government had originally requested CAG to audit accounts of eight blocks, CAG intimated that they would take up the special audit of only four blocks - Panna-Mukta, Mid & South Tapti, KG-D6 and RJ-ON-90/1 for two financial years i.e. 2006-07 and 2007-08 with access to records of earlier years linked to transactions of these years.
The official said while the audit of Reliance's KG-D6 fields would be ready to be sent to Petroleum Ministry by mid-September, it is on the verge of completing audit of Cairn India's books.
"We are currently examining the books of BG. It will take sometime. I am hopeful that the entire special audit of the three companies would be ready in four months," he said.
The government had asked CAG to look into accounts of the three most important oil and gas fields in the private sector after allegations were made that Reliance had gold-plated the KG-D6 gas field development costs, which had increased four-fold to USD 8.8 billion.
The companies initially resisted the special audit as their books had already been audited by government approved auditors as per the provisions of the Production Sharing Contracts (PSC), under which the companies operate oil and gas fields.
"Initially, Cairn created some problems for us. But later all complied with (the audit by giving) the records asked by the CAG," he said.
Cairn had earlier said that it did not fall under the purview of CAG audit as per terms of the PSC and oil regulator Directorate General of Hydrocarbon (DGH) had already reviewed the capital spending by it in the prolific Rajasthan block.
But once it was made clear to the companies that the CAG had been asked to do a special audit, all fell in line, the official said, adding that Cairn was the most forthcoming with all its records, followed by Reliance and BG was the most difficult to deal with.
First Published: Aug 22, 2010 10:50 IST