ONGC to miss target

New Delhi: State-owned explorer ONGC Ltd is likely to miss its target date of gas production from its KG basin block because of changes in government policies and the introduction of the goods and services tax.

"The new policies concerning the oil and mining sector, as referred in the reply of ONGC to the NSE and the BSE, though not amply clarified in the reply, were pertaining to policies such as purchase preference policy, steel policy, GST policy and not regulatory policy," ONGC said in a statement.

While the ONGC board had in March 2016 approved a $5.07 billion investment for bringing oil and gas discovered in the KG-DWN-98/2, or KG-D5 block, in Bay of Bengal to production, new policies were formulated last year.

Last week, ONGC had informed bourses that after the board approved its field development plan, it began procuring goods and services for drilling, completion of wells, creation of production and processing facilities and transportation pipelines.

"Meanwhile, the introduction of various new policies concerning the oil mining sector led to the deferment of tendering activities. As of now, the project schedules are being maintained as planned.

"However, because of the very complex nature of the project, there is a possibility that the schedules may get exhausted, which will only be known at a later date," it had said.

Oil and Natural Gas Corporation Limited (ONGC)