Government-owned Oil & Natural Gas Corporation (ONGC) has met severe condemnation from the Comptroller & Auditor General (CAG) for being inefficient in its core exploration performance.
In its report, the CAG said that ONGC did not place sufficient emphasis on its oil & gas exploration activities and added that the public sector company did not finish work in 74 per cent of exploration blocks.
According to the report, the exploration process of the oil & gas company was inefficient, and there were critical gaps in its policies. It said the company should benchmark its exploration routine. The report added that the company needed parameters for monetization. Also, ONGC’s policies reveal critical gaps,
Out of 120 blocks auctioned in the first eight bidding rounds by the government, ONGC received 89 prospective blocks. But it made only 11 discoveries in eight blocks and failed to complete commitments at other blocks.
Criticizing ONGC for its inefficiency, the CAG said, "A comparison of discoveries ... shows that despite its large acreage and rich experience, ONGC made lesser discoveries than new entrants like Gujarat State Petroleum Corporation."
The oil & gas giant had to pay Rs 133 crore in liquidated damages because of its failure to complete minimum work in a number of blocks it attained in auction.
However, ONGC Chairman Sudhir Vasudeva defended the company’s performance, claiming that six of the seven basins in India hah been discovered by the company. He further said that 8.1 billion tonne reserves had been re-cerated by ONGC, and that thirteen new projects would increase the production by 3.5-4 million tonne.
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