The Hindu Business Line : ONGC, Petroleum Ministry likely to sort out MoU controversy soon

THE ongoing controversy between Oil and Natural Gas Corporation (ONGC) and the Petroleum Ministry over the signing of the memorandum of understanding for the current fiscal's performance target may end soon.

The top brass of ONGC is expected to meet senior Ministry officials this week for a quarterly performance review of the company.

In the absence of a MoU, which is signed each year between the Government and the navratna companies listing out the production targets, ONGC's performance review for the last two quarters had not taken place.

Sources in the Ministry told Business Line that performance evaluation would now be considered on the basis of the draft MoU.

According to industry grapevine, Mr Subir Raha, Chairman-cum-Managing Director, ONGC, has written to the Ministry saying that the performance for the two quarters could be considered together.

The controversy: The whole controversy had erupted recently with the Petroleum Ministry maintaining that the MoU was yet to be inked and ONGC stating that it had already signed the MoU. The Ministry, however, maintained that it had been requesting ONGC to work out a revised MoU based on the recommendations of the taskforce of the Department of Public Enterprises (DPE).

The Ministry had also requested the DPE to suggest necessary action with regard to ONGC, which exercised navratna powers but had not signed the MoU with the nodal Ministry for the current year. All MoUs are intermediated by the taskforce of DPE.

Different targets: According to Ministry officials, the taskforce was inclined to accept the Ministry's suggestion that the expected returns from investments made by ONGC through its subsidiary ONGC Videsh Ltd (OVL) should also be reflected in the MoU along with the likely domestic production of crude and gas.

In fact, the Government nominees on the board of ONGC were also reportedly raising the issue at board meetings.

ONGC, on the other hand, maintained that the DPE taskforce had approved the performance target the company was committing to in the MoU and had not insisted on including production from its overseas assets.

The ONGC management has proposed a crude oil production target of 27.8 million tonnes, but the Petroleum Ministry wants production from OVL, the company's overseas arm, also to be incorporated in the MoU and the production target raised to 35 mt.

This week's meeting is expected to sort out the differing positions.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page