Companies & Sectors
ONGC suffered Rs.8,000 crore loss for poor rig management: CAG
India's official auditor, the Comptroller and Auditor General (CAG), on Wednesday censured state-run Oil and Natural Gas Corp (ONGC) for poor planning in hiring and use of drilling rigs that resulted in a loss of Rs.7,995 crore.
 
In a report tabled in parliament, the CAG said ONGC's non-productive time or idling time of rigs ranged between 19 and 23 percent over 2010-14.
 
"The bulk of idling time costing Rs.6,418 crore was due to factors which could have been controlled by the company," CAG said.
 
The company also did not adhere to safety procedures and continued drilling and testing operations even after an anchor of its rig, Sagar Vijay, had broken, the report said.
 
A second anchor of the rig snapped, which caused drifting of the rig from its location, owing to which the well had to be closed and abandoned, it said.
 
Consequently, an expenditure of Rs.1,577.27 crore incurred by ONGC on drilling at the original location, and drilling of a relief well by using another rig proved avoidable.
 
"The insurer did not honour the claim of ONGC on the ground that the latter had not followed recognised safe operating practice," the report said.
 
Failure on the part of the company led to a situation wherein rigs were being operated with outdated and obsolete equipment, the official auditor said.
 
"The Annual Rig Deployment Plans (RDPs) had an in-built inefficiency," it said.
 
Whereas there was no uniformity in preparation of annual RDPs among the assets and basins of ONGC, the company failed to decide a policy on acquisition of new offshore rigs for over a decade -- from 2002 to 2015.
 
The CAG said four of six ONGC-owned offshore rigs have outlived their economic usable life of 30 years.
 
It asked ONGC to ensure that the plans - five year plan, annual plan, rig requirement plan, rig deployment plan - are complete and consistent with one another and are complied with.
 
The situation where one out of every three wells drilled is un-planned needs to be corrected, it said.
 
Besides, the company did not adhere to the repair schedule for dry dock management and major lay-up repairs of jack-up rigs which was against an efficient operational practice, the CAG said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Government does not guarantee EPFO's stock investments: Minister
Investments by the Employees' Provident Fund Organisation (EPFO) are not backed by any government guarantees as these are subject to market movements, parliament was informed on Wednesday.
 
"The government has not provided any guarantee for such investments in the stock market, as investment in such instruments are subject to market movements," Labour Minister Bandaru Dattatreya told the Rajya Sabha in a written reply.
 
"Some of the trade unions have expressed reservations over the decision to invest in equity as they are concerned about the risk associated with the investments in stock market," he said.
 
The minister also said that the EPFO's Central Board of Trustees has approved the proposal for investing in Exchange Traded Funds (ETFs) "after considering the possible risk associated with the investments".
 
EPFO started investing in ETFs from August this year, and the retirement fund organisation plans to invest 5 percent of its incremental deposits into ETFs during the current fiscal.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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90 percent grain, 20 percent sugar to be packed in jute bags
At least 90 percent of grain and 20 percent of sugar produced in the country would now have to be packed in jute bags, the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi decided on Wednesday.
 
An official statement said the decision would provide relief to 3.7 lakh workers employed in jute mills and ancillary units as well as support the livelihood of around 40 lakh farm families. 
 
Besides, it would help to protect the environment because jute is natural, biodegradable and reusable fibre.
 
Under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act, 1987, the government is required to consider and provide for the compulsory use of jute packaging material in the supply and distribution of certain commodities in the interest of production of raw jute and jute packaging material and of persons engaged in the production thereof and for matters connected therewith.
 
In pursuance of the Act, the government decided that 90 percent of food grain production and 20 percent of sugar would be reserved for jute packaging in 2015-16 
 
The statement however added that in case jute mills were not able to provide jute bags as per the requisition, a dilution of up to 10 percent would be permissible. 
 
Sugar packed for export but which could not be exported, sugar fortified with vitamins, packing for export of commodities, consumer packs of 10 kg and below for food grain and 25 kg and below for sugar and bulk packing of more than 100 kg may also be exempted from the reservation order under the Act. 
 
Meanwhile, packing of food grain above 10 kg and up to 25 kg should be done in jute bags.

 

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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