CAG seeks D6 audit for 2012-13, RIL agrees for 2013-14 too

RIL said audit should be in letter and spirit of the Production Sharing Contract signed by the government for KG-D6 fields

The Comptroller and Auditor General of India (CAG) had sought last Tuesday an audit of Reliance Industries Ltd (RIL)'s spending on the KG-D6 block for 2012-13. The company asked it to add 2013-14.

"This is because data and documentation for 2012-13 and 2013-14 are all in a server, and administratively and to save time and effort, it should be convenient to both the audit team as well as the operator if the audit for both the years are done together," RIL wrote to CAG.

It said the audit be in the letter and spirit of the production sharing contract (PSC) signed by the government for KG-D6 fields.

RIL said, "Was happy to note the CAG has been appointed by the petroleum and natural gas ministry under Article 25 and Section 1.9 of the accounting procedure of the PSC as the government's representative."

The company said it was agreeable to an audit whose scope and nature be in line with the ministry's letter of last January.

The ministry had in January 2013 agreed the audit under the PSC be a financial and not a performance one.

It had told the CAG the provisions of the PSC provided for a government-appointed auditor.

The CAG had in the first round audited KG-D6 spending for 2006-07 and 2007-08 and in the second completed audit of spending till 2011-12.

The report of the second part is to be tabled in Parliament in the winter session.

In response to draft CAG findings, RIL had raised concerns.

"Given the complexity of the project, various technical and operational decisions are made during the course of project implementation, with the objective of overall costs and schedule rather than the impact of a single decision," it had said.

"Challenging every decision on a stand-alone basis with the benefit of hindsight would destroy the risk-taking ability of the industry and would impact the implementation of complex projects in any sector."