Reliance Industries treads cautiously in response to CAG's report on KG D6

NEW DELHI: Reliance Industries responded to the toned-down CAG report with caution, saying it had not studied its contents yet, but declared that it had set a global benchmark for efficiency, project completion and capital costs in developing India's largest gas field in a challenging environment. "We are proud of our achievement,'' the company added in a statement.

The company faced an extremely uncertain outlook after a draft CAG report, which was leaked to the media, sternly criticised oil ministry's alleged favours to the company.

The final report focused on government procedures and systems, and was relatively mild on Reliance. It criticised the government for allowing the company to retain the entire block after the first phase of exploration but the CAG also, uncharacteristically, praised it for developing world-class, deep-sea infrastructure in record time.

The CAG also took note of Reliance's view that oil and gas industry required specialised procedures, which may be different from the way government operates. The CAG has asked for a thorough review of some of the contracts awarded by the operator, but went on to add: "In this recommendation we are not even remotely suggesting that the operator should follow government procurement procedures. Yet, any commercially prudent private acquisition would also attempt to generate competition and thereby obtain the most competitive price."

RS Sharma, former chairman of ONGC, sharply criticised the CAG's draft report. "In the process (between draft CAG report and the final report), they (CAG) have done huge damage to India's E&P reputation. Somebody must take responsibility for that." He said India needed to reach out to investors as the country desperately needs new discoveries.