Petroleum minister Veerappa Moily on Monday said audits of oil and gas blocks are integral to the contractual obligation and KG-D6 operator Reliance Industries Ltd (RIL) will have to abide by it.
“I have already gone on record to say that it is a contractual relationship between the government and the respective contracting parties... Audit (of spending on oil and gas fields) is part of this (contractual obligation)”, he told reporters here.
“They (RIL) will abide by that (contractual obligations). We need not create problems for either for them (RIL) or for the government and Comptroller and Auditor General (CAG).”
A meeting between CAG, the oil ministry and RIL set for October 31 to begin the audit process was postponed by the ministry earlier, leading to speculations on differences between the parties on the scope of the audit.
A petroleum ministry statement later clarified that the postponement was due to administrative inconvenience and will in no way affect either the procedure or the content of the audit by CAG of these blocks.
CAG clarified last week that it does not conduct performance audit of private auditors and the same had been clarified to the petroleum ministry that the audit would be conducted to same lines as done earlier.
In a Saturday evening statement, RIL said it “has at no time contested the government's right to conduct an audit by any agency, including the CAG, as provided in Section 1.9 of the Accounting Procedure of the Production Sharing Contract”.