Parliament accounts panel poses 4 key questions to Centre on oil, gas contracts

The newly constituted Public Accounts Committee of Parliament has asked the Centre to explain its role in the implementation of the production sharing contracts signed for hydrocarbon discovery and production including with Reliance Industries Ltd. for the East Coast block – KG D6.

A PAC member told BusinessLine that while much of the work has already been done by the earlier committee headed by BJP leader Murli Manohar Joshi, the new panel has sought answers from the Ministry for Petroleum & Natural Gas on four critical issues – calculation of revenue sharing, role of the Centre in deciding the relinquishment of the unexplored areas, appointment of auditors, and issue of gas pricing.

So far, there is a consensus among the PAC members that the pre-qualification criteria for awarding the blocks and system of auditing itself were faulty and need improvement. The PAC is in sync with the Comptroller and Auditor General’s performance audit report on the hydrocarbon production sharing contracts.

CAG had commented on the D6 operator challenging the scope of the auditing at various points, indicating that the Government auditor has conducted performance audit which was not permitted under the production sharing contract. The CAG has disagreed with this view of the operator time and again.

The PAC member said that 'auditor of the operator doing the audit is likely to be biased. There is need to clearly state in the PSC what the scope of the audit is and where CAG can conduct an audit.'


HBL