The Comptroller and Auditor General of India (CAG) has pulled up the Gujarat government-run Gujarat State Petroleum Corporation (GSPC) for financial irregularities and undue favour to select companies such as Reliance Industries Ltd and Adani Enterprises Ltd. According to its report for the year ended March 2010-11, GSPC incurred losses of a little more than Rs 5,000 crore during 2006-2011 for exploration activities at its oil and gas block in the Krishna-Godavari (K-G) basin.
The CAG report, tabled in the state assembly today, says GSPC, with its consortium, had bid for acquiring the K-G block without proper technical and financial assessment. “As a result, against the estimated drilling cost of $102 million (Rs 525 crore) and the total depth committed of 45,348 metres in the minimum work programme (MWP), actual drilling cost incurred was $1,303 million (Rs 6,686 crore) and the total depth drilled was of 77,395 metrws,” the report said.
For the incorrect financial and technical estimate of exploration, GSPC’s Canadian joint venture partner, Geo Global Resources Inc (GGR), was held responsible. The JV with GGR also caused a loss of Rs 104 crore for GSPC in 2007-11, due to inclusion of GGR in the JV without taking any financial contribution from it.
