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Report No. 42 of 2015 - Performance Audit on Hydrocarbon Exploration Efforts of Oil India Limited, Union Government, Ministry of Petroleum and Natural Gas

Date on which Report Tabled:
Wed 09 Dec, 2015
Date of sending the report to Government
Government Type
Union
Union Department
Commercial
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Sector -

Overview

Introduction

Private sector participation in hydrocarbon exploration and production (E&P) in India dates back to the Government of India’s decision of 1991 to invite foreign and domestic private sector companies to participate in the development of oil and gas fields already discovered or partly developed by National Oil Companies (NOCs1). New Exploration Licensing Policy (NELP) was formulated by the Government of India (GOI) during 1997-98 to provide a level playing field to both public and private sector companies in exploration and production of hydrocarbon. NELP became effective from February 1999. Since then, licenses for exploration are being awarded only through a competitive bidding system. Under NELP, NOCs are required to compete on an equal footing with Indian and foreign companies to secure Petroleum Exploration Licenses (PELs). Upto 31 March 2014, the GOI announced nine rounds between 1999 and 2010, inviting companies to bid for exploratory blocks under deep water, shallow water and onshore category in various basins.

Keeping in view the vital role of hydrocarbon sector in the economic growth of the country and to have a long-term policy i.e. 100 per cent exploration coverage of the Indian sedimentary basins by 2025, for the hydrocarbon sector, MOPNG formulated the Hydrocarbon Vision–2025 in March 2000.

A Performance Audit of Oil India Limited (OIL)’s hydrocarbon exploration efforts (2009-10 to 2013-14) was conducted against the above backdrop. Audit attempted to see whether OIL’s exploration efforts had been taken up with proper planning and executed with efficiency and effectiveness to achieve its own and the nation’s envisioned hydrocarbon goal. The main audit findings and recommendations are as follows.

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