Oil Ministry refutes CAG allegation on offering financial benefits to private operators

FOR IMMEDIATE RELEASE
Mumbai, Maharashtra, India, Republic of (Free-Press-Release.com) July 14, 2011 -- In a steaming issue between oil ministry and Comptroller and Audit General (CAG) body, the ministry has taken a stand and claimed that it as abided by all provisional mandates in dealing with private operators, and that its suggestion of revision of development plans is in the best interest of the sector.

CAG had raised a question of undue benefits being offered by the oil ministry to private partners, when the only reason private partnership was encouraged was to speed up the process of deep sea exploration and development of natural resources. CAG has pointed out that because of the laxity shown by oil ministry itself in dealing with private partners, the central government has faced huge capital losses.

In reply to this allegation, the oil ministry has asserted that CAG has failed to acknowledge that the central government, earlier this March, had earned Rs. 7,000 crore as royalty and Rs. 32,000 crore as profit petroleum without having made and financial investment. While there have been stances of sunk capital incurred by the government after deploying huge sums to the private exploration projects, the ministry has asserted that revenue was still generated on part of the government and that CAG's comment should encourage enhanced inflow of private and foreign capital and technology, which is much needed by the nation at the time.
As for the revision of development plans, the ministry stated that the practice undertaken to incorporate new input that is available from new geo-scientific data is quite common, and permitted under Article 10.14 of PSC.
The ministry has, needlessly, assured that it will look into any financial irregularities that may surface on account of any private or public partner and take necessary remedial actions towards the same. It also asserted that Directorate General of Hydrocarbons (DGH) will take on the ‘technical validation role’, distinct from audit functions.

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