CAG report slams ONGC for incorrectly reporting crude oil production -The Total Investment & Insurance Solutions

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8Th Aug 2016

The Comptroller and Auditor General (CAG) of India has slammed the "over-reporting and incorrect reporting" of crude oil production by the ONGC, and recommended that the company should not include items like condensate, basic sediment and water as crude oil production.

 

"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 from 2012 to 2015," said the CAG report tabled in Parliament on Monday.

 

It said the "measurement and metering system" for crude oil production in the state-run company also had "several infirmities".

 

The CAG report recommended that the company should report condensate as a "separate stream as opined by the international consultant".The Total Investment & Insurance Solutions

 

The official auditor maintained that in western offshore for the ONGC operations, the reported production quantity measured at offshore platforms were higher than the actual sale quantity "with the bulk of differences in volume arising during transportation of crude oil in a closed pipeline".The Total Investment & Insurance Solutions

 

The CAG added: "Reasons for the differences should have been investigated and corrective action should have been taken."

 

Moreover, the report said: "In onshore areas, it was noticed that to reconcile over-reported production, fictitious inflating of closing stock of crude oil, erroneous reporting of theft of crude oil and reporting non-existent pit oil as stock were adopted."The Total Investment & Insurance Solutions

 

The CAG said: "The company should strictly adhere to prescribed schedules laid down for calibration of all crude oil measuring devices such as storage tanks and Mass Flow Meters, Turbine Meters, Auto Suppliers etc in both offshore and onshore assets to ensure accuracy of their measurement".Total Investment & Insurance Solutions