Govt showed favour to private oil explorers: CAG draft report

NEW DELHI: The Comptroller and Auditor General ( CAG) has said oil ministry and its regulatory arm for oil hunting companies, Directorate General of Hydrocarbons, showed favour to at least three explorers.

The draft report, which is awaiting oil ministry's comments, has said that the ministry and DGH allowed Mukesh Ambani's Reliance Industries Ltd to violate terms of the contract with the government for its showcase Andhra offshore fields and increase its capital expenditure plan to start production from India's biggest gas discovery in recent years.

In case of Krishna-Godavari basin field accounts, CAG has also pointed out sweetheart deals in RIL's contracts, contending government's oversight officials allowed the company to recover, from sale of gas, expenditure on the field before the money was actually spent.

The report also raises questions on favours shown by the ministry to oil explorer Cairn India Ltd, which operates India's biggest onland oilfield in Rajasthan's Barmer district. A joint venture of Reliance, BG (formerly British Gas) and state-run ONGC that operates the Panna-Mukta and Tapti group of gas fields, has also been criticized for stonewalling the audit by the government agency.