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CAG wants Cairn India field cost increase to be audited

While Reliance Industries raising KG-D6 field capex from $2.4 billion to $8.8 billion have been subject matter of various scrutinies,top auditor CAG wants a similar increase in spending by Cairn India on its Rajasthan oilfields to be audited in future.

Written by Press Trust Of India | New Delhi | Published: September 9, 2011 12:26:58 am

While Reliance Industries raising KG-D6 field capex from $2.4 billion to $8.8 billion have been subject matter of various scrutinies,top auditor CAG wants a similar increase in spending by Cairn India on its Rajasthan oilfields to be audited in future.

The Comptroller and Auditor General (CAG) in its final report on Rajasthan block audit,tabled in Parliament,said Cairn had in 2006 proposed $1.24 billion for developing the Mangala oil field in the block.

A revised field development plan (FDP) was submitted three years later in 2009 due to change in delivery point of crude oil from Barmer in Rajasthan to Salaya and later to Bhogat in Gujarat,which necessitated laying of pipeline.

“On June 30,2009,the Management Committee approved the revised FDP at a cost of $2.367 billion,plus $941.05 million as the cost of the pipeline,plus $35.61 million as cost of Mangala (field) enhanced oil recovery (scheme); ie a total cost of $3.34 billion,” it said.

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