MPs criticise ONGC but praise private explorers

Vol 8, PW 16 (03 Nov 04) People & Policy

Parliaments standing committee on petroleum and natural gas has castigated the government for a string of failures in its management of the oil industry, particularly the upstream sector.

It seems the government has not learnt from the mistakes committed during the 9th Five-Year Plan (1997 to 2002), said the committee in its latest report. Results are not encouraging, except in the expansion of refining capacity.

MPs said the governments performance was particularly unsatisfactory in deepwater and frontier area exploration, acquisition of equity oil abroad, improved oil recovery, strategic crude oil storage and regulation to protect consumers. Wasteful expenditure in drilling dry wells is another of its searing criticisms.

In-place hydrocarbon accretion was low during the 9th Plan, reads the report. A similar scenario has emerged in the 10th Plan.

In a tersely worded report, the committee demands an explanation from ONGC for a drop in gas production this year over last year. We would like ONGC to make concerted efforts to improve its performance.

MPs also accuse junior explorer Oil India of failing to meet crude oil and natural gas production targets for the past two years. Vigorous implementation of improved oil recovery methods and use of the latest technology and equipment can improve the situation to a great extent.

MPs advise Oil India and ONGC to improve their data so that dry wells are not drilled, thereby saving wasteful expenditure in drilling. MPs are unflinching in their praise of private and joint sector explorers and are enthusiastic about NELP.

A number of oil and gas discoveries have been made recently from the blocks offered under NELP, write MPs. In view of the encouraging results obtained from NELP, the committee recommends that the frequency of bids under the policy should be enhanced.