CAG report unlikely to impact RIL-BP, Cairn-Vedanta deals

The Comptroller and Auditor General of India (CAG) report has put Mukesh Ambani-led Reliance Industries in a tight spot. In its first ever audit of oil companies, the CAG has said that the government favoured private oil explorers including RIL.

However, the oil ministry is optimistic that the CAG report will not play a dampener in pending deals like RIL-BP and Cairn-Vedanta, reports CNBC-TV18 quoting sources.

"Both the deals are being considered for approval on merit," say oil ministry sources. According to sources, clearance of the RIL-BP deal is at an advanced stage while the other one Cairn-Vedanta has to deal some more issues.

Oil ministry sources add, :We will see if both Cairn and Vedanta agree to pre-conditions post Cabinet Committee on Economic Affairs (CCEA)."

It is learnt that the oil ministry will send a reply to draft CAG report shortly.

The group of ministers headed by finance minister Pranab Mukherjee had, on May 27, asked for the contentious issue of royalty-sharing between state-owned ONGC and Cairn India in the Rajasthan fields to be renegotiated and stated that Cairn should accept its liability to pay cess on oil production.

(Also see: Government favoured RIL, others in gas exploration contract: CAG)