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CAG report indicts DGH and RIL


CAG report indicts DGH and RIL
The Comptroller and Auditor General of India's report on KG-D6 gas fields expenditure was tabled in the parliament. According to the report the company has violated the production sharing pact (PSC) on KG D6 block.

The report also stated that DGH has failed to pursue technical aspects of the KG DWL block, reports CNBC-TV18. With this the CAG has indicted the DGH, that is the technical arm of the Oil Ministry.

In the report CAG states that Reliance hoarded D6 exploration space despite lack of rigs. It also added that the oil major didn't relinquish 25% of total contract area of D6 block as required.

Suggesting for an immediate review by the Oil Ministry to determine the contracted area in the KG basin, the CAG has said there is enough ground to revisit profit sharing mechanism for KG basin.

The report does not quantify the losses but it said that that the government suffered substantial royalty losses. ONGC holds 40% in the field while BG and RIL hold 30% each.

There were allegations that the cost of development of gas and oil field were artificially inflated with the auspices of the Oil Ministry, when Murli Deora was the Minister. Therefore, an audit was ordered by the Oil Ministry in 2007 to assess the facts of costs. The audit reviewed the accounts of four oil & gas blocks including Reliance and Cairn India. Cairn India developing gas fields in Rajasthan.

Story first published: Thursday, September 8, 2011, 14:50 [IST]
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