New Delhi, Oct 31 (IANS) The oil ministry postponed Wednesday’s scheduled meeting for India’s official auditor to begin audit of Reliance Industries’ (RIL) KG-D6 oil and gas producing block.
The Comptroller and Auditor General (CAG) had called an Entry Conference for Wednesday with RIL and the oil ministry to begin its second round of audit that is to cover RIL’s spending on KG-D6 gas fields during 2008-09 to 2011-12.
Official sources told IANS that the meeting was called off by the ministry earlier this week.
The meeting was seen as the government’s attempt to break the impasse on the proposed second round of the CAG audit on the oil field.
RIL has sought written assurance that CAG’s audit would be of accounting books and records as provided under the Production Sharing Contract (PSC) and that the company would not be “required to provide documents, information or any clarification of matters which go beyond scope of audit under Section 1.9 of the Accounting Procedure of the PSC”.
The oil ministry, instead, wants RIL to give CAG “unfettered access to account books”, and is yet to approve the company’s investment proposals including annual budget for the last three years.
According to RIL, the pending investments are necessary to reverse the drop in output from the fields. There has been a decline in output at KG-D6 in recent years.
The CAG audit had questioned the company’s revision of capital expenditure of the block to $8.8 billion from $2.39 billion.
RIL holds 60 percent share in the block followed by UK-based BP with 30 percent, and Canada’s Niko Resources owns the remaining.
The KG-D6 block accounts for more than 80 percent of RIL’s total oil and gas production.
