Ready to return 25% of K-G gas fields, RIL tells PAC
04 February 2012
Top Reliance Industries officials told the parliamentary public accounts committee (PAC) on Friday that the company would return 25 per cent of the Krishna-Godavari offshore gas field awarded to it for exploration to the government this year in keeping with the provisions of its contract.
The PAC subsequently issued written questionnaires to which the RIL executives will have to answer in another appearance before the panel.
The PAC investigation follows a report by the Comptroller & Auditor General of India saying the oil and gas explorer has violated the terms of its contract and also inflated development costs in order to reduce the government's revenue share (See: CAG blasts government for mishandling gas contract with RIL).
Asked about the violation of the condition that RIL was to return 25 per cent of the area awarded to it for exploration, the company team led by group president V Balasubramanian and executive director P M S Prasad reportedly argued that the firm had no ulterior motives in holding on to exploration blocks.
"There is no real estate to be made," Prasad told the PAC in an aggrieved vein.
"Retention of discovery area is a geological issue and not an accounting issue. As such it is best settled by technical experts, which was also done in this case. The CAG made no attempt to or even gave RIL the opportunity to explain how in geographical terms the entire block did qualify to be declared a discovery area as per the PSC, (product sharing contract)" RIL said in a note circulated to PAC members.