RIL representatives to face PAC tomorrow on gas block issue

The alleged violation in the contract of a gas block in the Bay of Bengal awarded to Mukesh Ambani-led Reliance Industries (RIL) will be examined by a key Parliamentary Committee tomorrow when its representatives appear before the panel.

The representatives are expected to be grilled by the members of the Public Accounts Committee (PAC) in the backdrop of adverse observations by the Comptroller and Auditor General (CAG) which had sought review of the production-sharing contracts signed under New Exploration Licensing Policy (NELP), evolved in 1999 during the BJP-led NDA government.

The CAG had said that the policy provides inadequate incentive to contractors like Reliance to reduce capital expenditure.

It had faulted the Oil Ministry and its technical arm, the Directorate General of Hydrocarbons (DGH), for allowing Reliance to retain the entire 7,645 sq km KG-DWN-98/3 (KG-D6) block in the Bay of Bengal after the giant Dhirubhai-1 and 3 gas finds were made in 2001.

As per the PSC, Reliance should have relinquished 25% of the total area outside the discoveries in June, 2004, and 2005, but the entire block was declared as a discovery area and the company was allowed to retain it.

RIL, in turn, has claimed that it was not given enough time to respond to the observations made by the CAG whose recent report was critical of the Mukesh Ambani-led company and the Oil Ministry for violation of contract over the showpiece KG-D6 gas block.