The Union Oil Ministry has informed the Prime Minister's Office (PMO) that the private firm, Reliance Industries has not agreed to an audit by the comptroller and auditor general (CAG) into its expenditures.

The Oil Ministry said that it has not given final approval to the company's plan to improve natural gas output from the flagging KG-D6 fields. Oil Secretary G C Chaturvedi informed a meeting with meeting that was presided by Pulok Chatterji, Principal Secretary to the Prime Minister on September 24, that KG-D6 block oversight committee has agreed to all the proposals of the company on the site.

He also said that the final decision has not been announced due to the reluctance of RIL to an audit by CAG into the way it manages its expenditures. Reliance Industries (RIL) and the ministry of petroleum and natural gas have a disagreement over the recovery of cost for developing the eastern offshore KG-D6 gas fields. The Supreme Court had approved the setting up of the arbitral panel for the resolution of the dispute. Justice SS Nijjar has disposed a plea from RIL and said that the two arbitrators will appoint a third arbitrator and aim to resolve their differences.

The government had maintained that there is no dispute and no arbitral panel is required for the matter. However, it has now appointed Justice Khare as its nominee. The government is now looking to resolve the issue through arbitration. Oil Minister Jaipal Reddy has been asking the company to stat sharing the accounts with the CAG.