The Comptroller and Auditor General of India (CAG) has found that the wholly-owned overseas arm of Oil and Natural Gas Corporation — ONGC Videsh Ltd (OVL) — incurred a loss of Rs 1,182.42 crore from its joint venture operations in Russia.
Tipped as India’s largest overseas oil field asset acquisition, OVL’s acquisition of the producing assets of Imperial Energy Corporation in Russia was not able to achieve even half of the projected target, the apex auditor noted in its latest report on OVL’s joint venture operations.
The report, tabled in Parliament on Wednesday, said that ONGC Videsh had been able to achieve production of only 15,803 barrels of oil per day (bopd) as against the envisaged production level of 35,000 bopd and incurred a loss of Rs 1182.14 crore during the January 2009-March 2010 period.
The audit found inadequacies in nine out of 20 test cases in the evaluation process of investment opportunities and formation of joint ventures.
CAG noted that ONGC’s aborted exploration project in Sudan had resulted in an unfruitful expenditure of Rs 423.84 crore.
Similarly, ONGC Videsh incurred a wasteful expenditure of Rs 369 crore by relying on the oil reserve estimates of Qatar Petroleum without revalidation of maps and data from an independent technical consultant for an exploration block in that country, CAG said.
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The report pointed out that inspite of provisions for partner audit in all 29 joint venture agreements, the company exercised this option only in 11 JVs that too after an average delay of one to three years. This, according to CAG, resulted in irregularities going unnoticed.
In a separate report, CAG found that iron and steel makers Steel Authority of India and Rashtriya Ispat Nigam Ltd need to make lot of improvements in their corporate social responsibilities to ensure better safety of employees, environment protection and social development.