New Delhi: In the backdrop of the CAG severely criticising its decisions on RIL's KG-D6 gas block, the Oil Ministry on Wednesday said none of its actions were taken with malafide intentions, but it may have erred in certain cases where it was open to a course correction. (Agencies)
"We would explain why a particular decision was taken. Why was it justified in those particular circumstances," Oil Secretary G C Chaturvedi said at a FICCI conference on energy security here.
"If any mistake had occurred, then it could be an error of judgement. There is a difference between an error of judgement and decisions (taken) on the basis of some malafide intentions," he said, referring to the CAG scrutiny, but did not name RIL or KG-D6.
The Comptroller and Auditor General (CAG) had in its September report sharply criticised the ministry for not exercising adequate oversight and control over procurements done by RIL and allowing the private firm to retain the entire 7,645 sq km block in the Bay of Bengal in violation of the contract.
Chaturvedi said when decisions are taken, no one is 100 percent sure of their correctness.
"Whosoever takes decisions cannot be 100 percent sure of correctness. There might be certain circumstances in which anybody's judgement may go wrong," he said. "It has to be looked at in the right perspective."
He said the CAG report is under the examination of the Parliamentary Accounts Committee (PAC) and the ministry's position on the decisions would explained to it.
"... Earth is not going to shake just because somebody has objected. When we have taken a decision, we would have been sure of certain outcomes and we should be ready to project those things," he said. "Yes, it is a temporary jolt, people get a little hesistant. But it is very temporary phase. It will pass over," Chaturvedi said.
"I would say this should be treated as a corrective phase. If there are some systematic problems, then definitely, we should correct them," he said.
"It is time for us to take stock and go for certain corrections," he said.
The CAG is a very old institution that has been auditing for a long time, he said. Of late, things have been a little different because before the PAC considers those audit observations, they have become a subject matter of public debate, he added.
The CAG had faulted the Oil Ministry and its technical arm, the Directorate General of Hydrocarbons (DGH), for allowing Reliance to retain the entire 7,645 sq km KG-DWN-98/3 (KG-D6) block in the Bay of Bengal after the giant Dhirubhai-1 and 3 gas finds were made in 2001.
As per the PSC, Reliance should have relinquished 25 percent of the total area outside the discoveries in June, 2004, and 2006, but the entire block was declared as a discovery area and the company was allowed to retain it.
It said the fall in gas output from KG-D6 to 39 million standard cubic metres per day, which is close to the 40 mmscmd output level envisaged in the original 2004 investment plan, raised "doubts if upgradation (of the development plan) to 80 mmscmd with substantial increase in development cost (to USD 8.8 billion)" was warranted.
The CAG has sought a review of Production Sharing Contracts like the one Reliance signed for KG-D6 in 1999 when the BJP-led NDA was in power, which were designed to encourage investment and induction of technology by private contractors in exploration and development of the country's oil and gas resources.
Chaturvedi said private oil firms do not object to audit of their accounts by the Comptroller & Auditor General (CAG) but the decision to audit their records rests with the top auditor.
"As per the PSC (production sharing contract), the government can request CAG for the audit... CAG takes up the audit depending on availability of manpower... they (CAG) always say they are short of manpower," he later told reporters.
PSC allows two government audits of accounts of money spent on oil and gas exploration and production.
It is CAG's call whether to audit blocks auctioned under various new exploration licensing policy (NELP) rounds as it is constrained due to lack of technical manpower, Chaturvedi added.
CAG had in 2007-08 rejected the then Oil Minister Murli Deora's request for audit of certain blocks including Reliance Industries' eastern offshore KG-D6, Cairn India's Rajasthan oil block and BG Group-operated Panna/Mukta and Tapti fields.
It later relented when Deora personally intervened requesting for a special audit.
New Delhi: In the backdrop of the CAG severely criticising its decisions on RIL's KG-D6 gas block, the Oil Ministry on Wednesday said none of its actions were taken with malafide intentions, but it may have erred in certain cases where it was open to a course correction.