<p>The Comptroller and Audit General (CAG) has been requested by Oil ministry officials to consider Reliance Industries Limited’s (RIL) views on the audit draft report prepared by the audit body on RIL’s most prolific gas field – KG-D6 block. Minister of state in the petroleum ministry RPN Singh has put in a word with CAG to consider RIL’s contention and also their response to additional issues before finalizing the audit draft report.</p>
<p>Earlier in June, CAG targeted Reliance Industries’ much acclaimed KG D6 block and suggested irregularities in its capital expenditures. It slammed oil ministry and its technical arm the Directorate General of Hydrocarbons (DGH) for allowing RIL to increase its capital cost, that too in violation of production sharing contracts (PSCs). In reply, RIL had defended its cost increment claiming that an increase in cost does not border on ‘benefits’; it is only when an operator incurs low capital expenditure that the profits increase. It also said that the audit report has failed to acknowledge the increase in exploration costs over the last few years for all oil and petroleum exploration and development operators around the world, which have equally affected the exploration and development processes of KG-D6 basin. RIL, in retort, had presented its statement in the form of a letter to CAG, clarifying any claims of irregularities. However, RIL’s views have reportedly not found ground in the process of finalization of audit report.</p>
<p>Stepping in support of RIL, the oil ministry has now urged the audit body to consider the views and opinions of the private operator, as the subject matter of deliberation is best explained and detailed by the operator itself. The issues pointed by CAG are largely legal and technical in nature, and oil ministry believes that it is important to examine and analyze data pertaining to petroleum systems and operations with the help of the field’s operator. Making allegations without cross checking and consulting with the operator is bound to lead to inconsistency and irrationality of claims.</p>
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