Decision making delays by the Ministry of Petroleum and Natural Gas have led to a loss of production of oil and gas to the tune of ₹26,000 crore from one hydrocarbon field alone, according to the findings of the CAG report titled Compliance Audit Report on Ratna and R-Series Hydrocarbon field.
The CAG finds a 23-year delay in handing over of the field to the Essar Oil-led consortium.
The CAG report finds that between October 2005 to March 2015, 56 million barrels of crude oil (valuing ₹25,600 crore) and 920 million standard cubic metre of natural gas (valuing ₹550 crore) were lost due to the delay. The field was a producing field of ONGC till 1994, following which the Centre decided to bring in private investors. ONGC was a part of the consortium of successful bidders, with a 40 per cent stake. While production stopped in 1994, the auditor has only been able to ascertain a value to the non-production since October 2005.
“The value of oil and gas not produced had to be based on a production plan. The only production plan available to us was that of the consortium of successful bidder. ONGC and the Ministry of Petroleum of Natural Gas did not provide us ONGC’s production plan from 1994 onwards,” said AM Bajaj, Principal Director, Comptroller and Auditor General of India.
Apart from lack of production, the CAG has also found that the Centre lost out on ₹1,000 crore of royalty and cess. It said that damage to the equipment in the field would require ₹1,085 crore of investment for repairs.
The CAG finds that delays in the decision making shows a ‘lack of seriousness’ in the approach of the Petroleum and Natural Gas Ministry. It has also questioned ONGC’s decision to stop production.