CAG cautions government against approving RIL's investment plan for KG-D6

A day after the Director General of Hydrocarbons (DGH) approved Reliance Industries' plan to start drilling for developing a new area in KG-D6, the Comptroller and Auditor General (CAG) has asked the oil ministry not to approve any of RIL's investment plans for the KG-D6 gas field unless the company gives it unfettered access to audit its spendings.

Referring to media reports of the government's move, the first major decision after Veerappa Moily took charge as minister of petroleum and natural gas, the CAG has advised the ministry not to approve any such investment except those of "emergent nature".

The ministry has been keeping in abeyance approval to RIL's annual capex plans for KG-D6 for the past three years.

"It is well within the knowledge of the ministry that any increase in capital expenditure is likely to have significant adverse impact on government's financial interests," CAG had pointed out in its letter to oil secretary on 9 November.

Reports, meanwhile, said contrary to reports, the ministry was yet to sign on resolutions approving capital expenditure on the KG-D6 block for 2010-11, 2011-12 and 2012-13 fiscal pending resolution of CAG audit of spending on the block.

The ministry wants RIL to give CAG "unfettered access to account books" and pending that it has not approved the firm's investment proposals including annual budget for three years, reports said.