The Hindu Business Line : ONGC may face flak for delay

The state-run ONGC may face Directorate General of Hydrocarbons (DGH) axe for failing to complete the minimum work programme in two offshore blocks one each in Bengal and Mahanadi basin. The company was recently forced to return three blocks for its failure to complete the exploration programme in time.

According to sources, despite repeated efforts ONGC is yet to receive approvals for extension of time frame for completion of the exploration programme in the NELP-II block WB-OSN-2000/1 in Bengal offshore and NELP - I block MN-DWN-98/3 in Mahanadi basin.

The product sharing contracts for the blocks were signed in April 2000 and July 2001, respectively. While Mahanadi block is fully held by ONGC, IOC (15 per cent) partners ONGC (85 per cent) in Bengal offshore.

Environmental reasons

While blaming previous managements for not taking enough interests in the said blocks in time, ONGC sources said that delay in receiving environment clearance, especially in Mahanadi basin in the Orissa coast, which is frequented by the Olive Ridley turtles for nesting purposes had also came in the way of completing the exploratory drilling in time.

The company was trying to make up for the delay on its part in initiating exploratory work in the offshore blocks for last few years. However, the job was made extremely difficult by a consequent rise in lead-time between booking a rig and acquiring the

The boom in exploration activity has also led to doubling in costs of chartering a rig. "Close to 80 per cent of our exploration budget is now directed to hiring the rigs alone," the official said.

Criticised for lack of discoveries in the recent years, ONGC is expecting a visible change in its performance beginning March Match-April 2007. "A series of measures taken during last two years have finally started working. We are confident good news will start flowing next fiscal,", the official said, hinting that the company is closing in on new discoveries.

A number of rigs are also on the way to be acquired and if everything goes according to plan the company will be hitting the deepwater of Andamans by March 2007. "We are now pursing for necessary environmental clearances for carrying out drilling activity in the region, which will hopefully be available by December this year," the official said.

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ONGC may face flak for delay