New Delhi:
Sources tell NDTV that the technical arm of the Oil Ministry, the Directorate General of Hydrocarbons (DGH), has refused to clear Reliance Industries' capital expenditure for the Krishna-Godavari basin for this year. The government and the regulator believe that Mukesh Ambani's RIL is not adhering to approved development plans for the gas field. The DGH wants Reliance to drill 11 wells in this fiscal year whereas the company plans to drill less than seven wells. The government is concerned that Reliance is producing 45 million units of gas a day instead of its target of 60 million units. The shortfall, according to government sources, is impacting power and fertiliser plants.
It has been a turbulent week for RIL. Stock prices fell after a report by the government's auditor, the Comptroller and Auditor General (CAG), was leaked to the media. The report finds that the Oil Ministry in 2006 may have sacrificed national interest to favour Reliance. The Oil Ministry has two weeks to respond to the audit.
The CAG report says that Reliance violated several features of its contract for developing India's largest gas field in the Krishna-Godavari basin. The audit concludes that bureaucrats and others in the Oil Ministry should be asked to explain why Reliance was given alleged sweetheart deals. For example, the company revised the capital expenditure for the Krishna-Godavari project by 6 billion. Because private operators are entitled to recover their expenditure before profits are divided with the government, the auditor worries that Reliance inflated its costs.
The company has in an earlier statement stressed that it followed the terms of its contracts, and "had acted responsibly."
It has been a turbulent week for RIL. Stock prices fell after a report by the government's auditor, the Comptroller and Auditor General (CAG), was leaked to the media. The report finds that the Oil Ministry in 2006 may have sacrificed national interest to favour Reliance. The Oil Ministry has two weeks to respond to the audit.
The CAG report says that Reliance violated several features of its contract for developing India's largest gas field in the Krishna-Godavari basin. The audit concludes that bureaucrats and others in the Oil Ministry should be asked to explain why Reliance was given alleged sweetheart deals. For example, the company revised the capital expenditure for the Krishna-Godavari project by 6 billion. Because private operators are entitled to recover their expenditure before profits are divided with the government, the auditor worries that Reliance inflated its costs.
The company has in an earlier statement stressed that it followed the terms of its contracts, and "had acted responsibly."
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