After Coal, CAG slams to ONGC in its report
Shacking the country through its report on coal gate scam, the Comptroller and Auditor General of India Tuesday slammed public sector oil and natural gas company 'Oil and Natural Gas Corporation' (ONGC) for its inefficiency in its oil and gas exploration performance.
The CAG report, which was tabled today in parliament, slammed ONGC for its lower performance and tardy in monetising its reserves in the comparison of private sector companies state enterprises.
"ONGC did not place the desired emphasis in its core exploration activity," said CAG in its report on hydrocarbon exploration efforts of ONGC. The company did not complete work in 74 percent of exploration blocks, it added.
"There was a shortfall of 332,855 metres and 109 wells in ONGC's exploration performance. ONGC was also tardy in monetising its discoveries which contributed to low production."
The report says ONGC's finding or explorations costs overran targets by a steep range of between 129-648 percent.
The CAG wanted the petroleum ministry to reset annual targets set out in the memorandum of understanding the company signs with the government. It was hinting at a fudging of targets.
"Coupled with the low priority on exploration are the anomalies in MoU target setting and reporting as well as performance measurement which can potentially mislead the stakeholder," the report said.
It recommended that the petroleum ministry "ought to do a de-novo review of MoU targets placing emphasis on performance parameters directly linked to exploration."
The CAG pointed out that ONGC showed a healthy reserve replacement ratio (RRR) of more than one while production continues to remain static. It recommended a review of RRR as a performance parameter for ensuring performance in exploration activity.
The CAG held ONGC as having made lesser discoveries than private sector explorers like RIL as well as state enterprises like the Gujarat State Power Corporation (GSPC).
"While external benchmarking of performance was not done, nationally ONGC had among the lowest efficiency in drilling compared to private as well as public sector enterprise (Oil India Ltd), which led to non-achievement of work commitments as well as payment of liquidated damages."
The CAG said that less than 50 percent of the basins were only able to meet 2D/3D survey as ONGC was tardy in purchase of seismic survey vessel.
"Except Western Offshore Basin, none of the other basins were able to drill the targeted exploratory wells," it said.
The report said that ONGC rigs were less efficient than hired ones and the company took 7-16 percent extra days for drilling when it came to its own norms.
ONGC stock prices fell more than one percent Tuesday after the CAG report was tabled in parliament.
--With IANS Inputs--
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