The Comptroller and Auditor General (CAG) on Tuesday slammed public sector oil & gas producer ONGC for its shoddy efforts in hydrocarbon exploration over the past three years. CAG has pulled up ONGC for not placing desired emphasis on discovering oil and gas and being tardy in monetising its discoveries.
"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.
The national auditor wants the Union Petroleum Ministry to reset annual targets set out in MoU signed with ONGC.
The CAG performance audit of ONGC, which examines the company's hydrocarbon exploration efforts from FY08 to FY11, finds faults with the working of the company.
CAG's report was tabled in Parliament today.
"ONGC's lack of adequate efforts and results in new fields, coupled with the ageing of producing fields, is a matter of concern for future," CAG says in its report.
The report further adds that ONGC’s exploration processes have resulted in cost overruns and shortfalls in survey and drilling targets.
There was a lack of independent assurance on its technology, while its HR policies and practices revealed critical gaps, the CAG report says.
"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) which led to non-achievement of work commitments and payment of liquidated damages," it says.
The national auditor also notes several deficiencies in operations (procurement, hiring and contracting).
"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 says.