Oil Ministry orders detailed review of ONGC board of directors

While examining the status of oil and gas production last January, Petroleum Secretary KD Tripathi noted lapses in the development of discovered oilfield Ratna and R-Series

Written by Amitav Ranjan | New Delhi | Published: March 7, 2017 5:24:35 am
 Oil & Natural Gas Corp, petroleum ministry, ONGC board of directors, Petroleum Secretary KD Tripathi, review of ONGC board of directors, india news, indian express Oil & Natural Gas Corp

Oil & Natural Gas Corp is in for a shakedown with the petroleum ministry ordering a detailed review of its board of directors for a possible revamp of the functional heads, following prolonged delays in projects linked to output enhancement.

While examining the status of oil and gas production last January, Petroleum Secretary KD Tripathi noted lapses in the development of discovered oilfield Ratna and R-Series, restarting of oil production from Amguri field as well as in conducting two-dimensional seismic surveys to identify new oil and gas reserves.

“In this context, Secretary advised Joint Secretary (Exploration) to examine on file the re-organisation of ONGC Board of Directors, in particular the role of functional directors, with a view to have a lean structure facilitating quick decision making to boost the overall performance,” says the minutes of the meeting.

Following replies by the ONGC officials during the January 17 meeting, Tripathi directed that each of the three projects be directly monitored by Director General of upstream quasi-regulator Directorate General of Hydrocarbons.

Subsequently on February 14, sources said, the ministry directed ONGC not to promote the officers — usually executive directors and chief general managers — heading the delayed projects and to debar them as well from applying for higher level director post advertised by the Public Enterprises Selection Board.

The ministry’s reservations were evident in January with the progress on development of discovered oilfield Ratna and R-Series where “it was observed that efforts made by ONGC so far were not satisfactory and the detailed activity wise timelines for the development of the field were still awaited”.

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The field holds an estimated 87 million barrels of oil and 1.2 billion cubic metres of gas reserves. ONGC discovered the fields and created facilities before production was stopped in September 1994 after it was put up for auction. Essar Oil and Premier Oil of UK won the field in December 1996 but the production sharing contract could not be signed due to differences of rates of royalty and other issues.

On the delay in restarting production from the shutdown Amguri field in Assam, the ministry decided that DGH, not ONGC, would coordinate with Assam Company India Ltd (ACIL) “for firming up the annual work programme for 2017-18 and expedite production”.

In March last year, the Cabinet Committee on Economic Affairs cancelled the award of Ratna & R-Series to Essar Oil and Amguri to Canada’s Canaro Resources and reverted them to ONGC. However, Amguri – which used to produce 1,600 barrels of oil per day until 2010 — was given to minority 40 per cent holder ACIL last December after the latter submitted a bank guarantee with the promise to restart production.

The concluding rationale for the ministry seeking an appraisal of ONGC Board was the “unsatisfactory replies” from its officials on the status of 2D survey data acquisition where contract for more than 25 per cent of the area covering four sectors had still not been awarded.

Tripathi asked for the “corrective action” taken by the ONGC and raised “serious

concern” over it as the project was “one of the high priority programmes and any lapse in implementation of the project was not acceptable,” says the minutes.

He questioned the mechanism and level of monitoring of the project by ONGC and directed his Exploration wing and the DGH to critically review all milestones and submit a detailed report. He also advised that an inter-organisational peer team be set up for closely monitoring the projects as per pre-decided timelines.

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