Gas scam ?
The Comptroller and Auditor General (CAG) has said oil ministry and its regulatory arm for oil hunting companies, Directorate General of Hydrocarbons, showed favours to at least three explorers. The draft report, which is awaiting oil ministry’s comments, has said that the ministry and DGH allowed Mukesh Ambani’s Reliance Industries Ltd to violate terms of the contract with the government for its showcase Andhra offshore fields and increase capital expenditure plan to start production from India’s biggest gas discovery in recent years. In case of Krishna-Godavari basin field accounts, CAG has also pointed out sweetheart deals in RIL’s contracts, contending government’s oversight officials allowed the company to recover from sale of gas expenditure on the field before the money was actually spent. The report also raises questions over favours shown by the ministry to oil explorer Cairn India Ltd, which operates India’s biggest onland oilfield in Rajasthan’s Barmer district. A joint venture of Reliance, BG (formerly British Gas) and staterun ONGC that operates the Panna-Mukta and Tapti group of gas fields, has also been criticized for stonewalling the audit by the government agency. The report is, however, a draft which has been sent to the petroleum ministry for its comments, which would be incorporated. An exit conference between CAG auditors and ministry representatives is also scheduled. CAG last week submitted its draft of the Performance Audit Report on Hydrocarbon Production Sharing Contracts. The Andhra offshore and the Barmer fields are among eight acreages operated either in public-private partnership or by private companies that were put under CAG lens in 2007. The special CAG audit was ordered after charges of ‘goldplating’ — artificially jacking up costs — by RIL was raised by the Samajwadi Party and ADAG group of Anil Ambani. The two fields alone are estimated to require an aggregate investment of some $10 billion that is to be recovered from oil/gas sale. Any change in the expenditure, thus, has a bearing on the government’s share. The special CAG audit was aimed at ensuring that the explorers recover only what they have actually spent.