The Ministry of Petroleum and Natural Gas had not recovered ₹3,652.64 crore ($510.79 million) on account of cost of unfinished minimum work programme in respect to 45 exploration blocks, according to the Comptroller and Auditor General (CAG) of India.

The CAG made these observations in an audit report on the Union government (Economic & Service Ministries-Civil) tabled in the Lok Sabha on Wednesday.

The CAG also said that as on September 2019, the cost of unfinished minimum work programme for nine blocks is yet to be worked out by Directorate General of Hydrocarbons (DGH).

The Centre has awarded 254 blocks under the New Exploration and Licensing Policy (NELP) I to IX rounds for exploration of oil and gas.

“As per the terms and conditions of Production Sharing Contracts (PSC), contractors are required to pay cost of unfinished minimum work programme (CoUMWP), if the block is relinquished or terminated by Government. However, contractors of 54 relinquished blocks failed to pay the CoUMWP as specified in PSCs.”

The unrecovered amount is 77 per cent of the expected amount (₹4,753.03 crore) that was estimated by the Ministry of Petroleum and Natural Gas.

“The delay in determination, working out and approval of the CoUMWP for relinquished/terminated blocks was not only on the part of contractors but was also on the part of DGH/MoPNG. DGH has not been able to finalise rates of benchmarking of costs and building of databank till September 2019. Non-maintenance of cost data by DGH, which was required as per Government Policy of December 2007, resulted in multiple and prolonged communications (sic) for seeking and collection of information and data from the contractors by DGH,” the CAG report said.

Star rating scheme

In another reported tabled in the Lok Sabha, the CAG said that the Star rating label programme of the Bureau of Energy Efficiency (BEE) was not implemented effectively. This report was also on the Union Government (Economic & Service Ministries).

The CAG report noticed that BEE had not implemented this scheme effectively as negligible check testing (0.16 per cent) of registered models was done during 2012 to 2018. In first check testing 63 per cent models failed and name of models and equipment were not published due to non provision in the Energy Conservation Act.

“The permittees had marketed 4,16,503 Room Air Conditioners (Room ACs) and 3,93,678 Frost Free Refrigerators (FFRs) of these models at the estimated market value of ₹2,238 crore till December 2018 for models failed in 2013-14 and 2017-2018,” the CAG said.

Audit also found that BEE had calculated excess energy savings by 23,624.96 MUs (equivalent to 61.50 per cent) in respect of three appliances, which contributed about 55 per cent of the total energy saving, in five years from 2012 to 2017.

Star label verifications were also not done and QR code technology for ensuring that non-compliant models are not sold in the market was not implemented by BEE, the CAG observed.