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Rs 11,276 crore loss due to less water injection by ONGC, says CAG

CAG said the shortfall in water injection is one of the significant reasons for less production of crude oil

ongc, oil, oil field, natural gas, gas

The crude that could not be produced due to lesser water injection was 3.79 million tonnes during the audit period

Press Trust of India New Delhi
India lost 3.8 million tonnes of crude oil worth Rs 11,276 crore in four years due to less than planned water injection by ONGC in its western offshore fields, the Comptroller and Auditor General of India (CAG) said.
Oil and Natural Gas Corporation's (ONGC) aging Mumbai High, Neelam and Heera fields off the Mumbai coast have been on a decline and water is injected into wells to push out the remaining oil.
"There was inadequate water injection," the CAG said in a report tabled in Parliament on Thursday.
"Water injection in the field was affected due to aging of injection infrastructure, frequent pipeline leakages due to poor quality of injection water, non-implementation of feasibility report inputs and to some extent, production from high gas-oil ratio wells."

This led to drop in reservoir pressure sharply and impacted crude oil production.
"...this deficient water injection impacted loss of production of crude worth Rs 7,802.50 crore for ONGC and revenue loss of Rs 3,474.29 crore to the Government of India by way of statutory levies during the audit period (2014-15 to 2018-19)," it said.
CAG said this loss cannot be considered as deferred production but a permanent loss of oil.
"Further, even for exploitation of a part of this oil deficit, additional investment is required and this needs review from the point of economical oil recovery," it said.
Mumbai High, Neelam and Heera fields contribute around 59 per cent of ONGC's production. The mature fields, which have been operating from 1976 and 1984 respectively, are susceptible to decline in production.
CAG said the shortfall in water injection is one of the significant reasons for less production of crude oil.
The crude that could not be produced due to lesser water injection was 3.79 million tonnes during the audit period.
"The value of oil deficit of 3.79 million tonnes due to less water injection worked out to Rs 11,276.79 crore. Out of this, the value of the oil deficit was Rs 7,802.50 crore for ONGC after considering the statutory levies and the balance Rs 3,474.29 crore is revenue loss to the Government of India," it said.
CAG said there was a continuous decline in reservoir pressure due to inadequate water injection since the inception of fields which impacted crude oil productivity and its ultimate recovery.
"Decline in reservoir pressure is further accentuated by higher gas production from the reservoir," it said. "Periodic recommendations of the (Oil) Ministry on importance of water injection, its distribution and maintenance of reservoir health were not fully implemented."

ONGC's Performance Benchmarking Group did not benchmark key performance indicators of 'reservoir health' with the world's leading exploration and production companies.
"Instead, it fixed static targets based on inputs received from its strategic business units. Further, effective 2019-20, the parameter 'reservoir health' is not part of the performance contract indicating lack of monitoring of reservoir health by the management," it said.
CAG said the shortfall in water injection is one of the significant reasons for less production of crude oil.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Mar 24 2022 | 6:16 PM IST

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