RIL has agreed to CAG audit: Oil Ministry

Reliance Industries has agreed to audit by the Comptroller and Auditor General of India (CAG) of its spending in KG-D6 gas block, the Rajya Sabha was informed. "RIL has agreed to audit by CAG for block KG-DWN-98/3 (KG-D6) for the years 2008-09 to 2011-12 without prejudice to the rights and contentions of the contractor under the contractual provisions," Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi said in a written reply to a question in the House.

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The company had initially objected to audit by CAG for time barred years as per Production Sharing Contract (PSC) and had not accepted the 'exceptional circumstances' advanced by the ministry, she said. As per PSC, audit of spending has to be done within two years.

"However, RIL has agreed for audit for those years with mutual consent," the minister said. RIL had sought confirmation from the ministry that the audit report would be submitted by CAG to ministry and all information submitted during the course of the audit would be kept confidential and not disclosed to any third party. Also, it wanted all such information not to be used for any other purpose other than as allowed under the PSC, she said.

"Ministry of Petroleum has advised RIL that Parliament is part of Union of India, a signatory to the contract (PSC), and not a third party," she said. "RIL has been directed to provide access to all records, documents, accounts of the block to CAG as per the contractual provisions." Lakshmi said CAG had not asked the ministry not to approve any of RIL's investment plan.

But it has "recommended that pending complete submission of all supporting records...relating to expenditure for previous years up to 2011-12 and comprehensive and detailed scrutiny thereof to verify that government's financial interests have not been adversely affected in any way, the Ministry may examine all relevant issues closely and carefully before considering the desirability of any further approvals of capital expenditure through the annual work programme and budget, development plans or otherwise, except those of an emergent nature," Lakshmi added.