The Comptroller and Auditor General (CAG) today said it will finalise its audit report on Reliance Industries' (RIL) eastern offshore KG-D6 gas fields before the monsoon session of Parliament next month.
"We will complete audit report of the KG-D6 block in the Krishna-Godavari basin operated by Reliance Industries before the monsoon session. The process is in approval stage," Deputy CAG Narendra Singh said.
The CAG is auditing Rs 45,000-crore capital spending by RIL, which is controlled by Mukesh Ambani, to tap natural gas from the D-6 block in K-G basin, following a request from the Petroleum Ministry in 2007.
The CAG plans to complete the entire audit process, which will include incorporating Oil Ministry's comments on its findings, by next month.
The CAG had started audit of India's first deep-sea field on December 21, 2009 and RIL submitted all required documents by January 2010.
Petroleum Ministry asked CAG to audit the accounts of Reliance, which is facing allegations of gold-plating gas field costs that has increased four-fold to $8.8 billion. RIL had on August 17, 2009, agreed to an audit by CAG but the nation's premier auditor began process only by December.
CAG's scope of audit covers Production Sharing Contract (PSC) in respect of the block KG-DWN-98/3 (KG-D6) awarded to Reliance, for two financial years - 2006-07 and 2007-08, with access to records of previous years linked to transactions of these years.
It is also understood that the scope of this audit will far exceed the normal course of audit by CAG and the prime objective may be to detect fraud, if any, by the operator (Reliance) allegedly in collusion with oil regulator DGH and Ministry of Petroleum and Natural Gas.
Sources said while the ministry wanted special audit of accounts from 2003-04 fiscal, CAG wanted the scope of examination of records be restricted to 2006-07 and 2007-08 only.
The government in 2002 asked CAG to audit PSCs like the one for KG-D6 block with RIL, but the premier auditor had then stated that its charter neither permitted audit of private accounts nor did it have the manpower to do so.
Subsequently, the government with the concurrence of CAG, appointed independent third-party auditors on the basis of an open bidding process. These auditors have audited accounts of companies like RIL.
However, in 2007, CAG was asked to audit the exploration spending and the agency conducted audit of all the private company reports, copies of which were available with the DGH. To close the audit, they needed to seek originals, which have now be made available to them, they said.
