PAC seeks explanations from Petro ministry on CAG findings

NEW DELHI: Parliament's Public Accounts Committee today sought explanations from officials of the Petroleum Ministry on CAG's findings related to shortcomings in production sharing contract, investment returns and the like in the KG Basin and other gas fields.

In today's meeting, chaired by PAC Chief Murli Manohar Joshi, the government faced a volley of questions on the observations made by CAG in its report on hydrocarbons.

Though the questions pertained to a variety of related issues, sources said most of them were directed at the reported anomalies in the oil and gas exploration and production being carried out by Reliance Industries in D6 gas fields in the Krishna-Godavari Basin.

The government was represented by Petroleum Secretary G C Chaturvedi and Directorate General of Hydrocarbons S K Srivastava, among others.

"The officials were asked about the profit sharing formula and investment return policies among other issues," sources said.

PAC has given the officials two weeks' time to reply to the queries posed by it today.

The CAG report has made adverse remarks on Reliance Industries and also criticised the government's functioning. It has pointed out failures and systemic flaws.

The report mainly deals with anomalies in Production Sharing Contract (PSC), which the government has formulated for sharing profits when a private company carries out exploration.

The PSC reportedly leaves scope for oil explorers to inflate costs and conceal revenue.