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
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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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