OilMin calls for restraint on CAG's KG-D6 report

Amidst a raging controversy over Comptroller and Auditor General of India's (CAG) draft report severely criticising its role in approving Reliance Industries' (RIL) KG-D6 field cost, Oil Ministry today called for restraint and not jumping to conclusion saying the top auditor has not yet finalised its report.

"The CAG report is at the draft stage," the ministry said in a press statement here. "This 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."

"It is only after taking into account the reply of government that the Office of CAG will suitably amend the draft report and send the final report for placing it on the table of Parliament," it added.

The CAG in its draft report had alleged that the oil ministry and its technical arm DGH favoured Reliance but did not say if by doubling of cost of developing eastern offshore KG-D6 field the Mukesh Ambani firm had overbilled the government and thereby caused loss to the state exchequer.

It also pulled up the ministry for going out of its way to grant nearly 1,700 sq km of additional area to Cairn India adjacent to its oil discovery in Rajasthan block.

"As the process of preparation of reply and its vetting by the Office of 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 at this stage," it said.

"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," the statement added.

On receipt of ministry's reply, the Office of CAG will examine the reply on merits and will hold an exit conference with it before making its final observations.

"The ministry, therefore, appeals to all concerned to exercise restraint and allow the process to be completed," the statement said.

The ministry said it was at its request in November 2007 that the CAG agreed to carry out special audit in respect of certain blocks/fields operated under pre-New Exploration Licensing Policy (NELP) and NELP regimes.

"The draft Performance Audit Report has been received in this Ministry on June 8, 2011," it added. "While the above process is underway, the leaked draft report is being reported and commented upon in sections of the media."

The CAG in its draft audit report on KG-D6 block said the ministry and DGH also bent the rules to grant "huge benefits" to Reliance when it was allowed to retain the entire block, but said gains cannot be quantified.