CAG report on oil field spending, 2G spectrum by Nov

The country's top auditor CAG today said it would submit in the next six months the audit of private oil companies' spending on oil and gas fields and the pricing of 2G spectrum by the Telecom Ministry.

"The audit process (oil exploration companies and telecom operators) will take about 4-5 months more. (After that there is) the process of formulating the report, and then we will hand it over to the government.

"So, I would see about six months time," Comptroller and Auditor General Vinod Rai said here on the occasion of the diamond jubilee celebrations of the National Academy of Audit and Accounts.

CAG, which is looking into pricing of spectrum for 2G telephony amid Opposition's charge that air waves were underpriced, last month had sought clarification from the Department of Telecom about why 343 aspirants who had applied for licence between September 26, 2007 and October 1, 2007 were not considered.

Also, CAG is auditing the Rs 45,000 crore capital spending by Mukesh Ambani-led RIL to tap natural gas from the D-6 block in KG basin. This audit followed a request from the petroleum ministry in 2007.

Rai said records of over 3-4 years have to be looked into.

Asked about the objective of such audits, Rai said, "In the case of gas companies it is to find out the nature of capital expenditure because it is revenue sharing with the government.

"Revenue sharing is based on certain costs incurred by the companies. They have done their costing and government wants to verify that costing and tell them how reasonable or otherwise."

Besides RIL, CAG is also auditing spending by Cairn Energy India and British Gas.

The CAG will present a single report on the issue of capital expenditure incurred by the private oil companies.

Rai, however, said that pricing is the prerogative of the government of India and the CAG will not comment on the gas pricing and the report would be restricted to expenditure.

On the telecom front, CAG would go into the market price that prevailed at the time of the 2G spectrum sale.

The opposition has levelled allegations that the government distributed new telecom licences and spectrum at throwaway prices, causing huge losses to the exchequer. Nine new licenses were issued in January 2008 at Rs 1,651 crore for pan-India operations.

CBI is also investigating the alleged irregularities in the spectrum allocation. But it is yet to submit any report.