The Hindu Business Line : ONGC, Ministry standoff ends; sign MoU on production targets

ONGC officials maintained that there was no change in the MoU targets. The MoU is signed each year between the Government and the navratna company stipulating production targets for the year.

New Delhi , Dec. 30

THE standoff between Oil and Natural Gas Corporation (ONGC) and the Petroleum Ministry ended on Thursday with the signing of an annual memorandum of understanding laying down performance targets for the company during 2005-06.

According to senior Petroleum Ministry officials, the MoU was signed in line with the target set by the task force appointed by the Department of Public Enterprises (DPE).

Further, the target of ONGC Videsh Ltd (OVL) has also been incorporated in the MoU, sources said. They, however, refused to give the figures for the target fixed for the company as per the MoU.

The Ministry had been requesting ONGC to work out a revised MoU based on the recommendations of the DPE task force.

The Ministry had suggested the inclusion of ONGC's foreign venture and domestic production target for crude/gas, based on the company's own technical assessment in the MoU. It had also suggested that the expected returns from investments made by ONGC through OVL should be reflected in the memorandum.

When contacted by Business Line, ONGC officials had a different take on the MoU. While agreeing that it has been concluded, they maintained that there was no change in the MoU targets. The MoU is signed each year between the Government and the navratna company stipulating production targets for the year.

The company sources said that it was the same MoU that the company had already signed and the Ministry's seal was awaited. As regards incorporation of OVL target in the MoU, the sources said that the MoU inked by the company had information on OVL targets and that is how the situation remains.

The whole controversy had erupted with the Petroleum Ministry requesting ONGC to work out a revised MoU based on the recommendations of the taskforce of the DPE.

The ONGC management has proposed a crude oil production target of 27.8 million tonnes, but the Petroleum Ministry wanted production from OVL, and the production target raised to 35 mt.