Comptroller and Auditor General red-flags deficiencies in ONGC's marine logistics ops

New Delhi: The Comptroller and Auditor General of India (CAG) in its latest performance audit report of Oil and Natural Gas Corporation (ONGC) has found deficiencies concerning safety in marine logistics operations by the company.

"Non-adherence to procedures laid down in Marine Operations Manual by vessel operators and selective adoption of guidelines lead to a compromise of safety in marine logistics operations. Besides, ONGC does not have a separate marine cadre to supervise the quality of services provided by its operation and maintenance contractor and to ensure adherence to standards defined by the company for chartered vessels," the CAG has said in its report. The marine logistic services of ONGC provide vital support to the offshore platforms and rigs through vessels and by storing and supplying various types of materials/equipment required for smooth exploration and production operations. According to the report tabled by CAG in the Parliament on Wednesday, the ONGC had not planned for an adequate number of offshore supply vessels (OSVs), resulting in compromise of mandatory safety duty.

The report further added that ONGC's decision to reduce OSVs instead of costlier platform supply vessels (PSVs) increased the cost of marine logistics operations by Rs 26 crore. The auditor also highlighted deficiencies in awarding of new vessel construction contract.

"CAG pointed out deficiencies in awarding of new vessel construction contract to an inexperienced contractor solely based on the experience of the foreign technical collaborator. Against scheduled delivery of 12 vessels by December 2011, the contractor could deliver only seven vessels by March 2018," CAG said. The audit commented on the inordinate delay in finalisation of tender for hiring of tankers due to which the company had to procure fuel through costlier alternative source leading to additional cost of Rs 163 crore.

Further, the audit observed that as against the requirement of two barges, ONGC hired only one barge leading to an extra burden of Rs 307 crore to the company on account of more costly fuel sourced from oil marketing companies. The apex auditor has also pointed out non-implementation of recommendations of the consultant to schedule vessels on a fixed basis than on an ad-hoc basis to reduce the turnaround time of supply vessels.

According to the CAG report, the excess vessel trips to drilling rigs as compared to average trips made by vessels to similar type of rigs in European waters indicated an increased cost of Rs 376 crore to the company.