Lackadaisical Approach of ONGC

The government has decided to cancel the license of ONGC for exploration of 3 blocks in Krishna Godavari basin won by the company on a nomination basis a few years ago. The government has also rejected the company’s proposal of forming a joint venture with UK’s British Gas for exploration of these three deep-sea blocks

Despite posting the highest ever net profit of Rs. 14,431 crore, an increase of 11% from the previous year and revenue of Rs. 50,556 crore in the fiscal year 2005-06, the easygoing approach of Oil and Natural Gas Commission (ONGC) has costed it heavily.

ONGC was triumphant in 59 out of 108 blocks offered under the New Exploration Licensing Policy (NELP). For the uninitiated, the New Exploration Licensing Policy (NELP) was launched by the Government for accelerating the pace of hydrocarbon exploration in the country.

Due it its sluggishness in its efforts to produce results in the past eight years the government has called for cancellation of ONGC’s license. The license of one of the three blocks has already expired while those of the other two blocks are due to expire in January and May 2007.

Minister of State for Petroleum and Natural Gas Dinsha Patel in his written reply in the Rajya Sabha said that the Government has decided to offer these blocks afresh in the next round of tender under the NELP VII.