ONGC appoints auditors to certify its oil and gas reserves

State-owned Oil and Natural Gas Corporation (ONGC) on Wednesday said it has appointed two international auditors to certify its oil and gas reserves, ahead of a planned share sale early next year.

"We have appointed D&M (DeGolyer and MacNaughton) and Gaffney, Cline and Associates as reserve auditors to value our reserves," Chairman and Manging Director R S Sharma told reporters at the Economic Editors Conference here.

The government plans to sell 5 per cent of its shares in follow-on public offer (FPO) in March 2011.

"We are ready for the FPO, but not before the first quarter of 2011 calendar year," he said.

ONGC may ask two reserve auditors to certify reserves in its 15 key oil and gas fields out of the about 150 discoveries it has made in the country.

"Certifying reserves for all the 150 fields will take six to eight months and we do not have the kind of time," he said.

Sharma said ONGC usually gets its reserves audited every five years, but this time it is getting a certification in the third year because of the planned FPO.

The proposed 5 per cent divestment in ONGC may fetch the government about Rs 10,800 crore.

Post offer, the government shareholding in ONGC will come down to 69.14 per cent from current 74.14 per cent.

"The Ministry of Petroleum and Natural Gas has accorded in-principal approval (to the share sale) and the Department of Disinvestment has circulated a note for inter-ministerial consultations," Oil Secretary S Sundareshan said.

Before the ONGC offer, Indian Oil Corp, the nation's largest company, will come out with an FPO in January 2011.

"It is proposed that IOC will issue fresh equity capital of upto 10 per cent of its paid up capital, along with a simultaneous disinvestment of 10 per cent of the government shareholding in the company," he said.

The government is likely to realise about Rs 8,000 crore, while IOC will fetch about Rs 10,100 crore to meets its capital expenditure requirement.

Government holding post fresh issue and disinvestment will coming down to 62.65 per cent from the current 78.92 per cent.

Sundareshan said Department of Disinvestment will decide on the timing and slotting of the issues keeping in mind issues like overcrowding the market.