State-owned ONGC shelled out Rs 18,787 crore in excess subsidy over 3 years as it 'over- reported' crude oil production by 12 per cent, which also resulted in extra payment of peformance related pay to its executives, government auditor CAG said.
In a report tabled in Parliament, the Comptroller and Auditor General of India (CAG) said ONGC 'over-reported' its crude oil production by 12 per cent through inclusion of items like condensate in the output.
Out of 132.17 million tons of crude oil production claimed by ONGC in five years from 2010-11 to 2014-15, as much as 12.1 per cent of over 6 million tons was over-reported. The over-reporting and incorrect reporting of crude oil production has presented an inaccurate picture of performance of the company on crude oil production and has led to the company sharing an additional subsidy burden of Rs 18,787.43 crore during 2012 and 2015, CAG said.
Besides, the over-reporting also resulted in over payment of performance related pay (PRP) to the company executives and staff. With ageing of fields (majority bring more than 30 years old), there has been an increase in water cut. This coupled with lack of adequate handling/processing facilities at the production installations resulted in higher proportion of BS&W and off gas in the crude oil.
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| ONGC over-reported crude oil production by 12%: CAG |
Audit of the crude oil measurement and reporting system indicated that the company (ONGC) was reporting partially stabilized crude oil as its crude oil production. This led to over-reporting of crude production by including items other than crude oil, namely, off-gas, BS and W (impurities) and recoverable internal consumption, it said.
Out of 132.17 million tons of crude oil production claimed by ONGC in five years from 2010-11 to 2014-15, as much as 12.1 per cent of over 6 million tons was over-reported. The over-reporting and incorrect reporting of crude oil production has presented an inaccurate picture of performance of the company on crude oil production and has led to the company sharing an additional subsidy burden of Rs 18,787.43 crore during 2012 and 2015, CAG said.
Besides, the over-reporting also resulted in over payment of performance related pay (PRP) to the company executives and staff. With ageing of fields (majority bring more than 30 years old), there has been an increase in water cut. This coupled with lack of adequate handling/processing facilities at the production installations resulted in higher proportion of BS&W and off gas in the crude oil.
ONGC shelled out Rs 18787 crore in excess subsidy over 3 years as it 'over- reported' crude oil production by 12
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