NEW DELHI: The management committee of Reliance-operated D6 block, which is headed by the director general of hydrocarbons, has so far granted approval for the company to recover only $3.99 billion of its cost from sale of oil and gas out of its claim of $9.47 billion, oil minister Jaipal Reddy said.
According to annual audited account of the D6 block up to March 2011, the expenditure incurred by the contractor in development activities of D1 and D3 gas fields and MA oil field is about $5.7 billion and $1.73 billion, respectively, he said in a statement in Rajya Sabha on Tuesday.
“For this PSC (production sharing contract of D6 block), while contractor has claimed an expenditure of $9.47 billion and cost recovered of $5.26 billion up to 2010-11, the committee has approved only $3.99 billion up to financial year 2007-08,” he said.
“The said audited accounts are placed before the committee for adopting the same as provided under the PSC. It has approved the said audited accounts up to year 2007-08,” he said. ET wrote it first on February 8, that the committee did not approve annual accounts of the D6 block, submitted by RIL for 2008-09, 2009-10 and 2010-11.
The contract allows RIL to first recover its entire expenditure in developing oil and gas fields from block’s sale proceeds before determining profit shares of stakeholders.
The Comptroller & Auditor General of India (CAG) had conducted special audits for 2006-07 and 2007-08 and it “has also agreed to conduct regular audit for the block as per PSC for 2008-09,” he said.
The CAG report had observed that the large procurement contracts were given on single bid basis, he said. “However, CAG has not quantified any loss of revenue to government in this block for the audited years. The CAG report is under consideration of public accounts committee ( PAC),” he added.