Sunday, May 16, 2010

CAG’s RIL K-G basin audit would take 4-5 months to finish

Comptroller and Auditor General (CAG), one of the top auditors of India, said that it would take another 4-5 months to finish the audit of the D-6 oil block in the Krishna-Godavari basin operated by Reliance Industries Ltd.

CAG General, Vinod Rai said, "We require 4-5 months to complete the audit... The process would take time, as this is the first time that we are looking at a private player’s books... It’s a very detailed process",

In 2005, RIL bid for areas offered under New Exploration Licensing Policy (NELP), and won the tender of Krishna-Godavari basin off the coast of Andhra Pradesh. The block was awarded to RIL for two financial years 2005-2006 and 2007-2008

After a request from the Petroleum Ministry in 2007, CAG is auditing about the spending of Rs. 450 billion capital to extract gas from the D-6 block of the Krishna-Godavari basin.

Mr. Rai also said that RIL had submitted all necessary documents sought by CAG at the end of January 2010.

On May 7, 2010, the Supreme Court announced its verdict ending the three year battle between RIL and RNRL. Anil Ambani led RNRL accused RIL of inflating capital to Rs. 450 billion from the initial estimate of Rs.125 billion.

The prime objective of this audit by CAG is to detect if RIL had committed any fraud with the assistance of oil regulator DGH and the Ministry of Petroleum and Natural Gas.

1 comment:

  1. The Supreme Court has also tried to pass on the buck, by asking RIL and RNRL to renegotiate.

    The answer to question – If no agreement could be reached in re-negotiation has been very cleverly evaded in the judgment. Probably, in such a case the whole litigation process for compensation / damages / questioning the validity of demerger starts all over again.

    Ripon Malhotra