CAG pulls up ONGC for flaring high-pressure gas from Mumbai High Field

CAG pulled up ONGC for flaring of high-pressure gas valued at Rs 816.08 crore in the Mumbai High Field during 2012-13 to 2019-20

Apex auditor CAG on Tuesday pulled up state-owned ONGC for flaring of high-pressure gas valued at Rs 816.08 crore in the Mumbai High Field during 2012-13 to 2019-20, due to the non-availability of standby process gas compressors, power shutdowns and frequent tripping of process gas compressors.

The Comptroller Auditor General of India (CAG) also said another public sector firm Indian Oil Corporation Ltd collected Rs 262.60 crore of turnover tax from consumers in Andhra Pradesh in violation of legal provisions of the Andhra Pradesh General Sales Tax Act, 1957. Afterwards, it settled the legal case with the Government of Telangana by making payment of Rs 65.65 crore against a total imposed penalty of Rs 262.60 crore.

Thus, resulting in "undue enrichment" to Indian Oil Corporation Ltd by Rs 196.95 crore, the CAG said in a report tabled in Parliament.

Regarding ONGC, CAG said high-pressure gas evolved in the process of separation of oil, water and gas in the offshore process system of the Mumbai High offshore fields is further compressed in the process gas compressors and fed to the wells for gas lift purpose.

In this process, balance gas is transported to gas processing plant of Oil and Natural Gas Corporation at Uran for further processing and sale to consumers. Any disruption in compression leads to flaring of valuable high-pressure gas which also has an adverse impact on environment.

The government auditor said that in order to maximise gas production, it is imperative that all equipment is maintained and run effectively so that there is no loss of production. Flaring of gas also has an adverse impact on environment as the emission of carbon dioxide leads to greenhouse gases and global warming.

"During 2012-13 to 2019-20, a total of 1,227.343 mmscm (million metric standard cubic metres) high-pressure gas valuing Rs 1,021.08 crore was flared.

"Value of High Pressure gas flared due to avoidable reasons viz., power shutdown, non-availability of standby process gas compressor, and tripping of process gas compressor was Rs 816.08 crore," the CAG said.

Mumbai High asset has 29 process gas compressors; of which, 22 were 15 to 36 years old, it added. During 2014-15 to 2019-20, there were 286 instances of tripping due to issues relating to gas generators.

The apex auditor has asked the ONGC that it should pay attention for preventive maintenance and adhere to the overhauling schedule as prescribed by the original equipment manufacturer so as to minimise the flaring of High Pressure gas at Mumbai High fields.

"ONGC may also fix responsibility on the officials responsible for lapses which leads to avoidable flaring of high-pressure gas," it added.

The report contains 42 individual observations relating to 32 central public sector enterprises (CPSEs) under 10 ministries/ departments. Total financial implication of individual audit observations is Rs 4,779.99 crore.