A Parliamentary panel has asked the government to penalise oil and gas companies like ONGC, Oil India and Reliance Industries which have defaulted on some of their hydrocarbon production targets.
The Parliamentary standing committee on petroleum and natural gas, which recently tabled its report in Parliament, strongly criticised the companies and the Director General of Hydrocarbons (DGH), the upstream regulator, which, according to it, “has not effectively monitored and took timely action to ensure that approved targets are adhered to by the private companies.”
“In case of repeated shortfall, some penal action may be considered against the defaulter companies,” the committee told the government.
The panel noted that Reliance Industries could not achieve its gas production target in 2010-11 due to the fewer wells drilled in the D1 and D3 fields in the DWN 98/3 (D6) block in Krishna Godavari basin. The panel was also told that ONGC’s crude output was below the targeted 25.42 million metric tonne last fiscal because of the ageing oilfields, from where the company is extracting the maximum possible output using new technology.
Oil India, another state-run company, could not meet its crude output target last fiscal due to the prolonged shut down of its Numaligarh Refinery.
“The Committee would like to know the penalty imposed on these companies for their failure to achieve approved drilling targets,” it said in the case of lower gas output from the Reliance-operated D6 field. The DGH told the panel that if contractors do not fulfill their committed exploration work, they are liable to pay the government the cost of the unfinished work programme.
The average gas output in the first quarter of this fiscal from the D6 block has been 48.6 million metric standard cubic metres a day (MMSCMD) as against the 70.39 MMSCMD production envisaged in the approved field development plan. Following the shortfall in production, the government recently asked the company to first meet the requirement of strategically important sectors like power and fertilisers before supplying non-core customers.
The committee said that state-owned ONGC and Oil India have not taken their production targets seriously and most of the targets set during the last three years are not fulfilled with reasons which are often repetitive.
Reliance Industries maintains that it has fully complied with the requirements in the production sharing contract at all times in conducting petroleum operations, and refutes any suggestion to the contrary.
It also says the KG D6 project has been globally acclaimed for its cost effective, speedy and flawless execution.
The committee noted that although gas output from private and joint venture projects were below the target at 26.77 billion cubic metres in 2010-11, crude oil output from them has exceeded the target at 9.68 million metric tonnes in the same year. The panel also noted that unlike crude production, ONGC's gas output last fiscal at 23.09 billion cubic metres was above the target, while Oil India had either met or exceeded its crude output target in the previous years.
The Parliamentary standing committee on petroleum and natural gas, which recently tabled its report in Parliament, strongly criticised the companies and the Director General of Hydrocarbons (DGH), the upstream regulator, which, according to it, “has not effectively monitored and took timely action to ensure that approved targets are adhered to by the private companies.”
“In case of repeated shortfall, some penal action may be considered against the defaulter companies,” the committee told the government.
The panel noted that Reliance Industries could not achieve its gas production target in 2010-11 due to the fewer wells drilled in the D1 and D3 fields in the DWN 98/3 (D6) block in Krishna Godavari basin. The panel was also told that ONGC’s crude output was below the targeted 25.42 million metric tonne last fiscal because of the ageing oilfields, from where the company is extracting the maximum possible output using new technology.
Oil India, another state-run company, could not meet its crude output target last fiscal due to the prolonged shut down of its Numaligarh Refinery.
“The Committee would like to know the penalty imposed on these companies for their failure to achieve approved drilling targets,” it said in the case of lower gas output from the Reliance-operated D6 field. The DGH told the panel that if contractors do not fulfill their committed exploration work, they are liable to pay the government the cost of the unfinished work programme.
The average gas output in the first quarter of this fiscal from the D6 block has been 48.6 million metric standard cubic metres a day (MMSCMD) as against the 70.39 MMSCMD production envisaged in the approved field development plan. Following the shortfall in production, the government recently asked the company to first meet the requirement of strategically important sectors like power and fertilisers before supplying non-core customers.
The committee said that state-owned ONGC and Oil India have not taken their production targets seriously and most of the targets set during the last three years are not fulfilled with reasons which are often repetitive.
Reliance Industries maintains that it has fully complied with the requirements in the production sharing contract at all times in conducting petroleum operations, and refutes any suggestion to the contrary.
It also says the KG D6 project has been globally acclaimed for its cost effective, speedy and flawless execution.
The committee noted that although gas output from private and joint venture projects were below the target at 26.77 billion cubic metres in 2010-11, crude oil output from them has exceeded the target at 9.68 million metric tonnes in the same year. The panel also noted that unlike crude production, ONGC's gas output last fiscal at 23.09 billion cubic metres was above the target, while Oil India had either met or exceeded its crude output target in the previous years.
Next Story
