CAG headache for ONGC as GSPC deal closes

Vol 20, PW 14 (06 Apr 17) People & Policy

Not only has ONGC been forced to reluctantly take over the KG-OSN-2001/3 block from GSPC it now has to deal with stinging criticism from the Comptroller and Auditor General (CAG) over a wasted well drilled back in 2008.

On the last day of the Gujarat state assembly budget session on March 31 (2017) CAG presented a 102-page report on Gujarat's public sector companies for the year ending March 31 (2016). Included in CAG's report is the astonishing disclosure that GSPC wasted Rs478.98cr ($72m) drilling discovery well KG-21 between September 2008 and October 2009 because two years later it bizarrely installed the jacket of a Well Head Platform on top of the well location making it impossible to re-enter.

Saipem jack-up Perro Negro 3 spud well KG-21 on September 22, 2008 drilling it to 5656 metres in water depths of 60 metres. Despite an impressive flow rate of 566,000 cm/d from one of the zones the well was strangely drilled outside the planned subsea 'template', says CAG.

In its reply to CAG in November 2015, GSPC lamely but squarely puts the blame on "zero visibility and diver error" for its mistake, infuriating CAG further. Even after realising it was drilling the well in the wrong spot, says GSPC, it decided drilling "could not be held up as it was not practically and economically viable to hold the jack-up on standby."

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