The oil ministry should not allow Reliance Industries Ltd (RIL) to make any more investments in its KG-D6 oil & gas block because any increase in capital expenditure in the block will likely hurt government's financial interests, the Comptroller & Auditor General (CAG) of India said.

The CAG also recommended a similar action for the Panna-Mukta & Tapti (PMT) group of gas blocks, which are jointly owned by RIL, British gas giant BG and government-owned ONGC.

In a letter dated Nov. 9, the CAG wrote to the ministry, “Any increase in capital expenditure in these blocks is likely to have significant adverse impact of government's financial interests."

The CAG wants RIL to submit all records of its expenditure in its gas blocks till 2011-12 for inspection.

The national auditor wrote the letter four days after Petroleum Minister M Veerappa Moily said that federal audit was part of RIL's contractual commitments and the oil & gas giant would abide by it.

While RIL has announced it will cooperate completely with the national auditor for a financial audit of its spending in the blocks, it has argued that its contract with the government doesn’t obligate it to let the auditor to assess its performance because it is a private company.