CAG refutes charges that it didn't allow operators to respond

Stocks

oi-Shoaib MD

By Shoaib Md

Published: Tuesday, June 28, 2011, 16:43 [IST]

The Comptroller and Auditor-General refuted the charge leveled at it that it didn't allow the private operator to give clarification before finalizing the draft performance audit report on oil and gas production sharing contracts. The CAG said that all parties were given the chance the respond.

The government's auditor said that as per the standard practice for all its performance audits, an entry conference and exit conference is conducted with the audited entity — in this case, the Ministry.

The statement further added, that in case of performance audit of hydrocarbon PSC, interactive meetings were scheduled and took place between the CAG and the two operators, including RIL. This meeting took place prior to the finalisation of the draft performance audit report.

“At no stage did this office refuse any operator an opportunity to respond to observations made by us," said the CAG.

The statement added: “This office sought the date for an exit conference for discussing the main audit findings in the draft performance audit report and subsequently a reminder was sent on June, 22, 2011 to the Petroleum and Natural Gas Ministry. As regards sharing of the draft performance audit report with the operators, it is stated that as per the established audit methodology, the draft report is forwarded to the Ministry, and it is for the Ministry to take a view on what operator-specific points it needs to share, at this stage, with the operators."

According to one of the leading newspaper report, the auditor has stated that it might call the representatives of the operators at the time of discussion of the operator-specific points at the exit conference. It had also informed the Petroleum Ministry that the exit conference will allow the ministry to clarify the points it does not agree to in the audit report.

The CAG concluded, “It is reiterated that the performance audit process follows a very structured, systematic and objective architecture, which involves taking into account all relevant facts furnished by the parties concerned to ensure a balanced and objective reporting".

CAG in its draft has said that the Ministry of Petroleum and Natural Gas and the Directorate-General of Hydrocarbons (DGH) favored RIL and Cairn by conceding them unfair advantage

The draft report said, rules were bent to enable RIL to retain the entire 7,645 sq-km KG-DWN-98/3, or KG-D6 block, in the Krishna Godavari Basin.

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