Thaindian News

Mumbai, Sep 8 (IANS) Mukesh Ambani-led Reliance Industries (RIL) Thursday denied any wrong-doing in the production sharing contract with the government related to the Krishna Godavari basin and said it had complied with all provisions of the contract.

The Comptroller and Auditor General of India (CAG) said that RIL violated the agreement to share gas produced in the Krishna-Godavari (KG D6) basin and failed to part with the government’s due share of the hydrocarbon.

In a report tabled in parliament, the auditor said as per the production-sharing contract (PSC), Reliance Industries should have given to the government a share of 25 percent of the total area outside that allocated to it.

However, the company was allowed to treat the entire area as its discovered area, the report said.

RIL denied any wrong-doing on its part in executing the production sharing contract.

“In KG D6, RIL has set a global benchmark for effective, efficient project completion and capital cost competitiveness under the most trying circumstances. As a contractor we remain committed to complying with the PSC provisions,” the company said in a statement.

The RIL scrip, which fell sharply in intra-day trade Thursday after the auditor’s report become public, rebounded to close 2.62 percent higher at the Bombay Stock Exchange (BSE).

The scrip had fallen to the intra-day low of Rs.814 around noon, down 2.12 percent from its previous close at Rs.831.70.

It, however, shot up in afternoon trade and closed at Rs.853.50.

The auditor did not make any comment, though, on the manner in which the company had sharply raised its capital expenditure claimed on the project from $2.4 billion to $8.8 billion.