17 April, 2021

A Rigged Pipeline

The Centre, RIL squirm under the gimlet-eyed CAG report

AFP (From Outlook, June 27, 2011)
A Rigged Pipeline

The CAG Charges

  • Undue concessions in extensions and area granted to operators of India’s three major oil and gas blocks: Reliance’s K-G Basin, Cairn Energy’s Rajasthan block; Panna-Mukta-Tapti JV
  • Lack of proper appraisal and monitoring of work programmes; permitting operators to flaunt field development schedules
  • Norms relating to high-value procurements violated, costs escalated without prior approvals
  • Flaws in PSC: no incentive for operator to minimise costs, as higher the capital investment, lower the government share of profit petroleum
  • Present system of bidding, awarding blocks unrealistic; need system to protect govt interest


Likely Outcome

  • Difficult to put a number on the “gold plating” charge, with many factors at play
  • Puts Murli Deora in the spotlight on the eve of a cabinet reshuffle; much depends on opposition role
  • Would intensify...

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