CAG unable to access RIL books for auditing gas PSC

CAG unable to access RIL books for auditing gas PSC

"Audit has gone into a limbo, so we cannot share much details," a top official at the Comptroller and Auditor General said on the condition of anonymity, when asked if the audit has been done on the capital expenditure of Rs 45,000 crore by RIL in its Krishna-Godavari basin gas fields.

"The CAG team has carried out the audit work," V K Sibal, Director General, Directorate General of Hydrocarbons, had said earlier this week.

The comments by the oil and gas regulator, on its official website, followed allegations made by Anil Ambani, fighting a bitter gas battle with elder brother Mukesh, that RIL had overstated its expenditure and demands for a probe by the Central Vigilance Commission and audit by CAG.

The CAG official said the special audit was being done on the government's request under the New Exploration Licensing Policy (NELP) for finding natural gas and other petroleum products.

Auditing was being done not only of the Production Sharing Contract between the government and RIL, but also for at least half a dozen other contracts. But the account books of these contractors were not accessible, he added.

Another official, who also did not want to be named, said that CAG was trying to work out a solution to take forward the audit that started about two years ago.

In his comments, Sibal had rejected Anil Ambani's charges that DGH had approved RIL's Rs 45,000-crore "exorbitant capital expenditure" plan for gas fields, saying the actual expenditure was subject to three audits including one by CAG.

The Production Sharing Contract (PSC) provides for auditing of the actual expenditure by three sets of auditors - the management committee appointed auditors, government appointed auditors and by the CAG.

RIL is investing USD 8.836 billion (about Rs 42,500 crore) in developing the Dhirubhai-1 and 3 gas finds in block KG-D6 - first two of the 18 gas finds in the block.

"The idea of gold plating betrays a lack of knowledge of business economics. Inflating the expenditure does not benefit any stakeholder- neither the contractor nor the government. No company would like to increase its investment unproductively. Every additional dollar of wasteful investment dents the profit of the contractor," Sibal had said without naming Anil.

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