Oil, gas-sharing contracts favour private players: CAG - The Hindu

If ‘first come, first served' was the structural flaw which led to the 2G spectrum scam in the telecom sector, the Comptroller and Auditor-General has identified the production-sharing contract (PSC) structure for oil and gas as the original sin which allowed private companies such as Reliance Industries Ltd. to gain “undue benefit” at the government's expense.

Visit http://allstateinsuranceproducts.wordpress.com/

Hitting out at the Petroleum Ministry and the Directorate-General of Hydrocarbons (DGH) for having “failed to protect” the government's financial interests, CAG has called for complete structural changes in the present PSCs for the management of hydrocarbon exploration and production involving the private sector.

for more information about Allstate insurance products News / Reviews

The Indian PSC today is based on a scaled formula for profit-sharing between the government and private contractors. The slabs for profit-sharing are so designed that the more capital-intensive the project — or the lower the ‘Investment Multiple' (IM), in industry parlance — the lower the government's share of profit petroleum, even as low as 5 to 10 per cent.

Oil, gas-sharing contracts favour private players: CAG - The Hindu