New Delhi: The CAG has found discrepancies of $690 million in operation of KG D6 block by the Reliance Industries and has recommended disallowance of cost recovery in many instances.
The discrepancies have been found with respect to expenditure ($386.83 million), revenue ($250.93 million) and accounting ($52.94 million).
The CAG report tabled in Parliament said that expenditure amounting to $160 million incurred of three appraisal wells was not eligible for cost recovery and had been disallowed by the petroleum ministry. The report said the operator continued to claim the cost recovery.
A RIL spokesperson said the firm will respond to the government after formal communication of the audit exceptions.
The CAG said that the audit of production sharing contract pertaining to KG D6 "has disclosed weakness in the areas of management and contractual obligations."
"There are obvious differences between the CAG and RIL on certain basic issues concerning the production sharing contract (PSC).
Once we receive a formal communication of the audit exceptions by the government, we will respond to the government in accordance with the provisions of the accounting procedure under the PSC and also exercise such other rights as are available to us in law," said the Reliance Industries spokesperson.
The CAG report tabled in Parliament said that expenditure amounting to $160 million incurred of three appraisal wells was not eligible for cost recovery and had been disallowed by the petroleum ministry.
"However, even after petroleum ministry communicated its decision, the operator continued to claim the cost recovery.
As of June 2014, the petroleum ministry has been unable to enforce its decision," said CAG. It recommended that petroleum ministry ensure that the disallowed cost of three wells is recovered. The report said the operator continued to claim the cost recovery.
