British Gas must suffer pain of CAG audit at PMT fields

Vol 13, PW 6 (27 Aug 09) People & Policy

British Gas has failed in its attempt to prevent a formal fresh government audit of the Panna, Mukta and Tapti fields.

PETROWATCH learns oil secretary RS Pandey made clear his wish for a formal fresh audit to BG (30%) and partners Reliance (30%) and ONGC (40%) at an August 17 meeting convened in Delhi, and also attended by officials from the Comptroller and Auditor General of India (CAG), the government’s audit watchdog. BG opposes a fresh audit, arguing the PSC limits audits to the last two years, and that regular audits are already carried out in line with the rules.

But an oil ministry source confirms that BG’s pleas have fallen on deaf ears and that a fresh audit will be carried out, regardless. “Pandey told the (August 17) meeting that a CAG audit will happen,â€‌ we are told.

“We have told the PMT consortium that it must co-operate with CAG.â€‌ For over two years BG has fought off attempts by the oil ministry to impose a CAG audit and officials tell us the August 17 meeting was called “to break the iceâ€‌ between all concerned.

“We asked them (CAG and PMT partners) to shake hands and move on with the audit.â€‌ Still unclear is how far back CAG will delve into the PMT accounts.

Will it be from December 1994, when a PSC was signed with disgraced operator Enron Or will it be from 2002, when BG replaced Enron as operator “CAG will carry out a preliminary examination of the records,â€‌ adds a source, “and then take a call on whether it should be from the inception of the PSC or later.â€‌ Fears that BG is being singled out are misplaced, adds an oil ministry source.

“There’s no agenda against BG,â€‌ we hear. “Eight PSCs will be audited, not just this one.

â€‌ Explorers Cairn, Niko, Hardy and Reliance, it seems, are also under the scanner with some of the PSCs they operate.

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