No loss from KG-D6 deal with Reliance Industries: Govt

NEW DELHI: The government sees no merit in CAG’s charge of irregularities in its dealings with Reliance Industries but is sympathetic to the auditor’s suggestions on better enforcement of contracts and strengthening the oil ministry’s technical arm, the directorate general of hydrocarbons.

Officials say the government did not suffer any loss by allowing Reliance Industries to retain the whole KG-D6 block. Reacting to the CAG report on performance of private energy firms released on Thursday, experts with direct knowledge of the matter questioned the technical expertise of the auditor and said it was important to understand that the spirit of the Nelp policy, which was framed to attract investments by private companies.

The government had allowed RIL to retain the entire D6 block without forcing it to relinquish a part of it only after the DGH certified on basis of technical data that the whole block was bearing hydrocarbon footprints, they said requesting anonymity.

They said Nelp allowed private energy firms to explore domestic blocks because of their deep pockets, efficiency and technical expertise.

The spirit of the policy was to augment domestic oil and gas production in minimal time. “As RIL was highly successful in the D6 block, it was logical to allow it to retain the whole block instead of re-tendering the relinquished part in another auction round. This has, in fact, saved more time and money,” one government expert said. One official said the DGH had certified that the entire block was prospective on the basis of seismic surveys.