The Central Bureau of Investigation (CBI) is likely to register a first information report (FIR) against executives of Reliance Industries Ltd (RIL), former director general of hydrocarbons V K Sibal and other government officials for allegedly favouring India’s largest private sector company.
The investigating agency is likely to frame charges on RIL having been allowed to retain the entire KG-D6 block acreage without mandatory relinquishment of 25 per cent of the contract area.
CBI is taking off from a report by the Comptroller and Auditor General (CAG) tabled in Parliament last month. The statutory auditor’s reports have become the basis of prosecution in scams related to 2G spectrum allocation and the Commonwealth Games, putting the UPA government in a spot.
“CBI is probing whether RIL was granted undue favours by way of extension of area and time of exploration without following the necessary guidelines,” a senior CBI official said. CBI since 2009 has been conducting a preliminary inquiry into the links between government officials, including Sibal, and RIL. Sibal is alleged to have taken favours from RIL. When contacted, Sibal offered no comments. RIL did not respond to a request for comments by the time of going to press.
Sibal is already facing charges of favouring GX Technologies in the award of a contract for conducting speculative seismic survey.
The official said an FIR would be filed in order to enable investigations, though searches and raids had yet been conducted only at DGH offices and Sibal’s residence. The CAG report had alleged DGH undertook an “about turn” in early 2005 after initially objecting to the contractor’s view that it was not in a position to identify any area for relinquishment.
The government allowed RIL to enter the second and third phases without relinquishing the required area based on finding of seismic surveys instead of actual drilling of wells. Daniel Johnston & Co Inc, an independent US-based consulting firm hired by RIL to examine the CAG allegations, has defended the company, stating that drilling was “simply not the only way to appraise a discovery... Technology advances with 3D seismic data have placed seismic technology almost on a par with drilling respect of its ability to aid in appraising a discovery in establishing a geological mode”.
Though CAG has alleged the ministry avoided taking a clear decision on the issue in line with the production-sharing contract till April 2007, the final approval for the extension, however, came from the ministry of petroleum and natural gas in February 2009 after the matter was examined by a committee under the additional secretary and had the approval of the then minister Murli Deora.
The current officials in the ministry defend the decision, saying it was prudent to allow the company to retain an area, especially if work had been carried out in the difficult deepwaters of the Bay of Bengal.
CAG, in its audit report, too admitted the fault was with the defective system of awarding points at the bid evaluation stage based on well depth. “This acts as a perverse incentive to some potential bidders to commit to high well depths on a purely hypothetical basis.”
The auditor also recommended that in future if exploratory well drilling was to be retained as a bid evaluation criterion, then either no weightage be allocated for well depth or it be categorised.
