NEW DELHI (Reuters) - India's state auditor has hit out at the country's biggest explorer ONGC for its tardy exploration and lax efforts in development in a report published on the heels of a damning view on coal which triggered a massive political row.
The report by the Comptroller and Auditor General (CAG) aimed to assess whether ONGC was up to meeting domestic energy targets set for 2025 by the world's fourth-largest oil importer and one of Asia's largest economies.
It said ONGC needed to focus more on exploration and ensure that it produced more from discoveries that it does make, adding that the Oil Ministry should reset ONGC's annual targets.
"ONGC mainly operates in its producing fields to meet both reserve accretion and production targets," the report said. "Lack of adequate efforts and results in new fields, coupled with the ageing of producing fields, is a matter of concern for future," it added.
Output by ONGC had been almost static with a downward trend over the last decade from 2001/02, the report said. The state-run company produced 46.48 million metric tons of oil equivalent (mtoe) in 2010/11, down from 48.29 mtoe in 2007/08.
The auditor said despite getting 89 prospective blocks out of 120 blocks auctioned in the first eight rounds of New Delhi's exploration auctions, ONGC has made only 11 discoveries in 8 blocks and did not complete work commitments 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 like Gujarat State Petroleum Corporation," the CAG report said.
ONGC did not place the desired emphasis on its core exploration activity and average meters drilled per day by ONGC were below the drilling performance of state-run Oil India Ltd and private operators.
The report should now be discussed in parliament, although proceedings there are paralyzed by a political row over the CAG's criticism of the government in its report on the coal industry.
The ONGC report also said the explorer had monetized only 73 out of its 158 discoveries made during 2002-2011.
"Though ONGC operates in a field of cutting edge technology, it did not have a system of independent assessment of its technical capacity which fails to assure its stakeholders," it said.
The auditor also noted cost overruns and shortfall in survey and drilling targets of ONGC's exploration process.
(Reporting by Nidhi Verma; Editing by Jo Winterbottom and Jeremy Laurence)
Obama Appointee Who Told WH A Financially Doomed Solar Panels Firm "Looks...OK To Me" IS U.S. Ebola Czar | Donald Lambro