In line of fire

New Delhi, Aug. 28: The Comptroller and Auditor General (CAG) has lashed out at state-owned Oil and Natural Gas Corporation for its tardy exploration and drilling activities.

In its report on ONGC’s hydrocarbon exploration efforts tabled in Parliament, the government auditor said the PSU did not complete work in 74 per cent of its blocks and its exploration costs had exceeded the target by a huge margin.

“ONGC made lesser discoveries than Reliance Industries and Gujarat State Petroleum Corporation. It monetised only two of its 56 offshore discoveries and it paid Rs 133 crore in damages for not drilling 24 wells in 13 blocks,” the report said. “It overran its exploration costs target by 129-648 per cent.”

The auditor said, “The ministry of petroleum and natural gas or ONGC ought to do a de-novo (from the beginning) review of the MoU targets placing desired emphasis on performance parameters directly linked to exploration. It should also be ensured that such targets and achievements are measured and reported on an appropriate basis to avoid misleading the stakeholders.”

The report said ONGC mainly operated in its producing fields to meet both reserve addition and production targets. “The lack of adequate efforts and results in new fields, coupled with the ageing of producing fields, is a matter of concern for the future.”

ONGC’s output has been almost the same with a downward trend over the last decade. It produced 46.48 million tonnes of oil equivalent (mtoe) in 2010-11 against 48.29 mtoe in 2007-08.

Despite getting 89 prospective blocks out of the 120 auctioned in the first eight rounds of the New Exploration Licensing Policy, ONGC has made only 11 discoveries in eight blocks and left work incomplete elsewhere.

“A comparison of discoveries... shows that despite its large acreage and rich experience in exploration and production sector, ONGC made lesser discoveries than new entrants such as Gujarat State Petroleum Corporation,” the CAG report said.

ONGC did not give emphasis on its core exploration activity and average metres drilled per day by it were below the performance of Oil India and other private operators.

The report also said the explorer had monetised only 73 out of its 158 discoveries made during 2002-2011. Less than 50 per cent of the basins were only able to meet 2D/3D survey as ONGC was tardy in buying the seismic survey vessel. “Except the western offshore basin, none of the other basins were able to drill the targeted exploratory wells,” it said.