SEBI Reg. Investment Advisor

Download App
Help Center Pricing
Money Works 4 Me Logo MoneyWorks4Me
Login Get Free Account
Sign Up

MoneyWorks4Me

Log In Sign Up Schedule Free 15‑min Call
Login Get Free Account
Sign Up
  1. Home
  2. Stock Market News
  3. CAG audit may not be required for CBM blocks: Rangarajan Panel

CAG audit may not be required for CBM blocks: Rangarajan Panel

27 Dec 2012 Evaluate

Giving a new twist to the enduring dispute between Reliance Industries (RIL) and CAG, a panel headed by Prime Minister’s Economic Advisory Council Chairman C Rangarajan has said that CAG audit may not be required in case of Coal Bed Methane (CBM) blocks, as these do not have elements of cost recovery as they were allotted on the basis of share of production a company offered from first day of production and the firm bidding the highest, got the blocks. 

By adding further he said, as the element of cost recovery is not applicable to CBM blocks and nominated (oil and gas) blocks (given to ONGC and OIL), CAG audit for such blocks may not be required, and production monitoring through field surveillance may be considered adequate. The report also said that audit was required in convention oil and gas blocks only and that too within a period of two years of closing of annual accounts. Further, a suitable mechanism of concurrent audit may be considered for blocks, where investment is over $1 billion.

In conventional oil and gas blocks, such as the eastern offshore KG-D6, companies are allowed to first recover their cost before the government gets a share in profit. CAG had earlier criticized this cost-recovery model and said it encouraged operators to keep raising costs to defer government profit.

Meanwhile, RIL has argued over the scope of a second round of audit of its spending on the flagging KG-D6 fields. RIL had contended that the government can appoint an auditor, including CAG, to verify its expenses within two years of the spending. Last month, it agreed with government to allow CAG to carry out inspection for 2008-09 and 2009-10, though it was time-barred. The recommendation of Rangarajan panel would be a big relief to RIL which has CBM blocks in Sohagpur, Madhya Pradesh, for which it has been seeking a price of almost $13 per million British thermal unit.

Register Now to get our Free Newsletter & much more!
2026 ©The Alchemists Ark Pvt. Ltd. All rights reserved. MoneyWorks4Me® is a registered trademark of The Alchemists Ark Pvt. Ltd.

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

×