OilMin appeals for restraint on draft CAG report

Faced with attacks from various sections over its role in exploration blocks awarded to private companies, the oil ministry has appealed to the media and politicians to exercise restraint. A draft report of the Comptroller and Auditor General (CAG), submitted to ministry for its comments last week, has alleged irregularities in the ministry’s action that could cause financial losses to the government.

“The ministry is examining the draft report. It involves scrutiny of administrative/policy issues and technical issues. The preparation of a detailed reply will take some time. While the above process is underway, the leaked draft report is being reported and commented upon in sections of the media. Since the reply is being prepared and vetting by the CAG is yet to be completed, it would be premature for the ministry to give any response on the observations made in the draft report. It would be equally incorrect for the media commentators, political leaders and civil rights activists to jump to conclusions and, thus short-circuit, the process,” said a ministry statement today.

It said CAG had agreed to carry out special audit in respect of certain blocks/fields operated under pre-Nelp (New Exploration Licensing Policy) and Nelp regimes at the ministry’s request in November 2007.

Once the oil ministry submits its comments, the CAG will examine the reply on merits and hold an exit conference with the oil ministry. The CAG will amend its report taking into account the government's reply.

The draft report had said the ministry and its technical arm, the Directorate General of Hydrocarbon (DGH) had bent rules by allowing Reliance Industries to inflate capital expenditure by 117 per cent on developing its D1 and D3 fields in the Krishna-Godavari basin, off India's east coast.

It further alleged the two bodies had favoured Cairn India and a trilateral joint venture between Reliance Industries, BG Group Plc and state-owned ONGC that operates the Panna-Mukta and Tapti group of gas fields.