FDI IN INDIA: Delhi gives nod for Reliance Industries-BP $7.2bn deal!

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• July 22, 2011 
• IANS 
• New Delhi / DC.

The Indian government on Friday gave its go-ahead to global energy major BP buying 30 per cent stake in some of the oil and gas blocks held by Mukesh Ambani-led Reliance Industries. The deal is worth $7.2 billion and is one of the single largest foreign direct investments in the country.

"The CCEA has given approval for a stake in 21 of the 23 blocks. For technical reasons we did not approve two other blocks," Petroleum Minister Jaipal Reddy told reporters here after a meeting of the cabinet committee on economic affairs.

BP had announced in February that it would buy a 30 per cent stake in 23 of Reliance's oil and gas blocks, including India's largest gas field KG-D6, for $7.2 billion. It would also pay the Mukesh Ambani firm another $1.8 billion, based on successful exploration.

The deal size may increase to $20 billion, depending on future performance payments.

The remaining two blocks are not yet producing any oil or gas and once some issues are resolved, the government will take a call on these as well, Reddy added.

Full Story at,

http://www.deccanchronicle.com/channels/business/companies/delhi-gives-nod-reliance-industries-bp-72bn-deal-269

CAG AUDIT REPORT-KG-D6 GAS FIELD: RIL blames it on rivals!

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PTI / The Hindu /  NEW DELHI, July 14, 2011.

Mukesh Ambani-led Reliance Industries has said the CAG has not found any false inflation of its KG-D6 gas field costs or any dishonesty in developing the gas fields. File photo - The Hindu.

Reliance Industries has said the Comptroller and Auditor-General of India has not found any false inflation of its KG-D6 gas field costs or any dishonesty in developing the nation’s largest gas fields.

Replying to the draft audit report of the CAG, which accused it of being a beneficiary of undue favours from the Oil Ministry and its technical arm, the DGH, Reliance said, “Corporate rivalry motivated a few people with vested interests to indulge in a vicious smear campaign.”

Without naming anyone, it said “baseless insinuations were made through public advertisements questioning the increase in cost estimates” from $2.4 billion proposed in 2004 to $8.8 billion in 2006 due to a 250 per cent jump in the cost of services between the period of initial assessment and the actual commencement of field development.

The CAG, in its draft report, had said the increase in field cost would mean a lower profit take for the government.

“There is no finding or observation in the CAG’s draft audit report that Reliance has falsely inflated its contract cost or that it has dishonestly colluded with any of its suppliers to have them inflate the cost of the goods and services supplied by them,” Reliance said.

After an extensive and detailed audit process, in which eight CAG representatives spent some six months on Reliance premises, “CAG does not state that any evidence exists to support any case that the contract cost has been dishonestly inflated.”

In its voluminous 250-page reply, the Mukesh Ambani firm asked the CAG to state in “clear terms” in the final report that the contract cost has not been dishonestly inflated.

Full Story at,

http://www.thehindu.com/business/companies/article2226819.ece

CAG Investigations: Oil Ministry calls for restraint on CAG report on KG-D6!

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PTI / The Hindu.

Amidst a raging controversy over the Comptroller and Auditor General’s (CAG) draft report severely criticising the role of the Oil Ministry in approving Reliance Industries’ KG-D6 field cost, the Ministry on Thursday called for restraint saying the top auditor has not finalised its report yet.

“The CAG report is at the draft stage,” the Ministry said in a press statement in New Delhi. “This Ministry is examining the draft report, it involves scrutiny of administrative/ policy issues and technical issues. The preparation of a detailed reply will take some time.”

“It is only after taking into account the reply of government that the office of CAG will suitably amend the draft report and send the final report for placing it on the table of Parliament,” it added.

The CAG in its draft report had alleged that the Oil Ministry and its technical arm Directorate General of Hydrocarbons favoured Reliance but did not say if by doubling of cost of developing eastern offshore KG-D6 field, the Mukesh Ambani firm had over-billed the government and thereby caused loss to the state exchequer.

It also pulled up the Ministry for going out of its way to grant nearly 1,700 sq km of additional area to Cairn India adjacent to its oil discovery in Rajasthan block.

OK, lets wait for the final CAG Report, on the matter!

Full Story at,

http://www.thehindu.com/news/national/article2110110.ece