 "India lost Rs 26,200-cr hydrocarbons in past decade: CAG")
“Domestic production of 56 million barrels of crude oil (valuing Rs 25,650 crore) and 920 million standard cubic metre of natural gas (valuing Rs 550 crore) had been deferred during October 2005 to March 2015,” the CAG has said in its report tabled in Parliament on Friday.
“Further, government’s take to the tune of Rs 1,050 crore on account of royalty and cess on crude oil and Rs 55 crore towards royalty on natural gas for the period also remained deferred and unrealised,” it added.
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The medium-sized hydrocarbon fields were discovered by state-owned Oil and Natural Gas Corporation (ONGC) and partially developed in 1979. The firm started commercial production from one of the fields in 1983 but stopped operations after the centre put up the fields for competitive bidding for exploitation by private parties.
The fields were awarded in 1996 to a consortium led by Essar Oil and the Union cabinet approved finalising the production sharing contract (PSC) in 1999. However, the issue remained unsettled even after 23 years of the policy decision, 19 years of award and 16 years of approval of Cabinet Committee on Economic Affairs.
Delays in taking final decision on various matters and raising of already settled issues led to repeated assessments of the financial capability of the successful bidders which contributed to further delays.
“This was a clear indication of lack of seriousness in the approach of the ministry of petroleum and natural gas towards reaching at a final decision on this issue, particularly when an already developed and producing field was lying closed for more than 20 years, in contrast to the objectives of the policy to attract private investment for upstream oil sector,” the auditor has said. The CAG’s estimate of deferred production is based on the production schedule submitted by the consortium.
It has also said the redevelopment of the once-producing field, now closed, would cost more than Rs 1,086 crore.
The auditor pulled up the government for the delay in decision making – primarily owing to the issue of rate of levy of royalty and cess – even as India imports more than 80 per cent of its crude requirement through costly imports.
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