Petrol Stop - CAG slams ONGC for tardy exploration

CAG slams ONGC for tardy exploration

Friday, 06 August 2010

06 August 2010;business-standard.com:New Delhi: The comptroller and auditor general (CAG) has slammed the Oil and Natural Gas Corporation (ONGC) for slow exploratory efforts. It said the PSU will have to surrender 14 nominated blocks on expiry of the lease period in 2011. ONGC, however, is learnt to have sought an extension of the lease period. “A meeting was held under the chairmanship of petroleum secretary S Sundareshan last month to discuss the company’s request for extension. The ministry is considering the request,” said an official. On the 16 blocks won by ONGC under the new exploration licensing policy, CAG said though the first phase of the contractual period for 14 blocks is over, ONGC has achieved the committed minimum work programme in only five blocks. “In the remaining nine blocks, out of 28 wells committed to be drilled, only seven were drilled. There was no hydrocarbon discovery in any of these 16 blocks,” CAG said. The company was unable to meet its committed targets due to delays in conducting environmental impact assessment, delays in acquisition and tendering process. As against 130 locations planned for drilling between 2004 and 2008, ONGC was able to drill only 76 locations due to shortage of rigs. The report tabled in Parliament today said the performance audit of ONGC in its 37 shallow water blocks “revealed systemic and compliance deficiencies”. CAG said ONGC incurred a loss of Rs 853 crore (till March 2009) since it treated the condensate produced from Tapti gas field (a joint venture with Reliance Industries, British Gas Exploration and Production India Ltd) at crude oil price instead of gas.