ONGC has appointed consultants to undertake third-party mandatory audit of its oil and gas reserves even as there is a distinct possibility of the company?s planned follow-on public offer (FPO) spilling over to the next fiscal. The government plans to sell its stake in the company through the FPO.
?We have appointed DeGolyer and MacNaughton (D&M) and Gaffney, Cline and Associates as reserve auditors to value our reserves,? ONGC chairman RS Sharma told reporters on the sidelines of the Economic Editors? Conference on Wednesday.
The auditors will assess oil and gas reserves in only 15 out of the company?s 150 oil fields because of time constraint.
The government holds 74.14% stake in ONGC. It plans to sell 5% equity in the company through the proposed FPO in March to meet its target of mobilising Rs 40,000 crore from disinvestment in the current fiscal.
However, as many as five PSUs including PowerGrid, Indian Oil and SAIL are lined up for disinvestment in the current fiscal. If ONGC also joins the queue, the market could get overcrowded.
Besides, there is issue of subsidy-burden sharing by ONGC. Mechanism for subsidy sharing is usually decided by the government at the end of the fiscal year given the quantum of under-recoveries.
?Further discussion is required with the department of disinvestment on the timing for ONGC?s FPO,? petroleum secretary,? S Sundareshan said.
At the current market prices, the government is expected to raise Rs 15,000 crore from the sale of 5% stake in ONGC.