CAG pulls up ONGC for slack efforts in oil and gas discovery
28 August 2012
The Comptroller and Auditor General (CAG) has faulted state-owned Oil & Natural Gas Corp (ONGC) for not placing required emphasis on oil and gas discovery and being tardy in monetising its discoveries.
CAG's report on the hydrocarbon exploration efforts of ONGC, tabled in parliament today, expressed concern at the company's lack of adequate efforts and results in new fields and wanted the oil ministry to reset annual targets set out in MoU that the firm signed with the government.
"ONGC did not place the desired emphasis on its core exploration activity. 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," it said.
According to the CAG, ONGC showcased a healthy reserve replacement ratio even as production continued to be static.
"ONGC was also tardy in monetising its discoveries which contributed to low production," CAG said. "While external benchmarking of performance was not done, nationally ONGC had among the lowest efficiency in drilling compared to private as well as central public sector enterprise (Oil India Ltd) which led to non-achievement of work commitments and payment of liquidated damages," it said.
The official auditor also pointed to several deficiencies in operations (procurement, hiring and contracting).