The Comptroller and Auditor General of India has pulled up public sector oil companies – Oil India Ltd and ONGC – for not paying adequate attention to the available latest technologies and poor utilisation of drilling rigs.

The CAG has rapped ONGC for poor planning in hiring and use of drilling rigs that resulted in a loss of ₹7,995 crore. 

In a report on utilisation of rigs in ONGC that was tabled in Parliament, the CAG said, “The efficiency of rig operation was poor. The rigs that were deployed or drilling idled for considerable periods; bulk of this idling could have been avoided by the company. The inefficiency led to lower cycle speed and commercial speed of rigs, besides the company incurring significant idling costs (₹6,418 crore).”

ONGC’s non-productive time or idling time of rigs ranged between 19 per cent and 23 per cent over the 2010-14 period.

The PSU, which is the country’s largest oil and gas producer, also did not adhere to safety procedures and continued with its drilling/testing operations even after one anchor of its rig Sagar Vijay had snapped.

As a result, ONGC incurred additional expenditure of ₹1,577.27 crore on drilling of the original location and drilling of a relief well by using another rig, said the report.

Similarly, in an audit report on hydrocarbon exploration efforts of Oil India Ltd, the CAG noted that the firm’s contribution to the net increase of hydrocarbon reserves was only under probable category as its reserves under proven (1P) and possible (3P) categories decreased.

Dip in reserves “Gas reserves under all the categories also declined,” said the report tabled in Parliament on Wednesday, adding that OIL must build necessary capability to ensure proving of reserves by commensurate upgradation from 3P to 2P and 2P to 1P category of reserves. It also said the PSU must pay attention to research and development activities and keep abreast of latest technologies given that it is a cash-rich company.

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