The Hindu Business Line : Private oil field cos may have to detail capex spend to CAG

New Delhi, Aug. 15 The Petroleum Ministry is likely to ask the private operators developing oil and gas fields in their respective blocks to make available the records sought by the Comptroller and Auditor General of India (CAG).

The records are sought to complete the audit of capital expenditure costs incurred by these companies.

Informed sources told Business Line that while the records relating to eight blocks including KG-DWN-98/3 (D6 block) and Panna-Mukta-Tapti (PMT) fields available with the Ministry and the Directorate-General of Hydrocarbons (DGH) have already been accessed by the CAG, the auditor was seeking records from the private operators to match the information available.

The CAG had said that lack of access to the records available with the private operators was making it difficult to complete the task.

Sources said a formal communication from the CAG had been received for accessing records of PMT fields only.

The joint venture partners for PMT fields are BG, ONGC and Reliance Industries Ltd (RIL).

In D6 block, RIL has 90 per cent participating interest and is the operator, with Niko Resources Ltd holding 10 per cent.

The Ministry has called for a meeting with the operators to discuss the same on Monday, where representatives of the CAG will also be present.

‘Complete transparency’

“Efforts are taken on a continuous basis to maintain complete transparency,” sources said. In November 2007, the Petroleum Ministry had requested the CAG to undertake special audit of eight blocks.

The issue of capital expenditure came into spotlight again when the Anil Dhirubhai Ambani Group (ADAG) alleged that the operator of D6 block — Reliance Industries Ltd — was claiming exorbitant capital expenditure.

The DGH had responded to this, saying that the experts’ views and the publicly available Goldman Sachs report on ‘Global Finding & Development Costs 2008’ indicated that the development plan of D6 is highly cost-effective, and that the CAG had recently carried out the audit at the DGH.

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