India - South Bassein Offshore Gas Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 9392 PROJECT COMPLETION REPORT INDIA SOUTH BASSEIN OFFSHORE GAS DEVELOPMENT PROJECT (LOAN 2241-IN) MARCH 4, 1991 Transport and Energy Operations Country Department IV Asia Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  COUNTRY EQUIVALENTS Currency Unit = Rupee (Rs) Rs 1.0 = Paise 100 US$1.0 Rs 9.0 (SAR) US$1.0 Rs 14.6 (Project Completion 1988) MEASURES AND EQUIVALENTS 1 Metric Ton (mt) = 1,000 Kilograms (kg) 1 Metric Ton (mt) - 2,204 Pounds (1 lb) 1 Meter - 3.28 Feet 1 Kilometer (km) = 0.62 Miles 1 Cubic Meter (cm) = 35.3 Cubic Feet (cft) 1 Normal Cubic Meter (Nm3) of Natural Gas = 37.32 Standard Cubic Feet (SCF) 1 Kilocalorie (kcal) = 3.97 British Thermal Un4ts (Btu) Bbl/d = Barrels per day MMCMD = Million Cubic Meters per Day TCF - Trillion Cubic Feet toe = Ton of Oil Equivalent tpd = Ton per day tpy = Ton per year PRINCIPAL ABBREVIATIONS AND ACRONYMS USED BOP - Bombay Offshore Project GOI - Government of India LPG - Liquified Petroleum Gas NGL - Natural Gas Liquids OIL - Oil India Limited ONGC - Oil and Natural Gas Commission WGEP - Working Group on Energy Policy FISCAL YEAR April 1 - March 31  THE WORLD BANK F1 0MCL USZ ONLY Washington. D.C. 20433 U.S.A. Oibce CA OictorGOW&I Opeatiam EvaluatMm March 4, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on India South Bassein Offshore Gas Development Project (Loan 2241-IN) Attached for information is a copy of a report entitled 'Project Completion Report on India South Bassein Offshore Gas Development Project (Loan 2241-IN)" prepared by the Asia Regional Office with Part II of the report contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be discksed without World Bank authorization.  INDIA FOR OFFICIAL USE ONLY SOUTH BASSEIN OFFSHORE GAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT Table of Contents Page No. PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . EVALUATION SUMMARY .................. . ii PART I - PROJECT REVIEW FROM BANK PERSPECTIVE .2... . . . . . Project Identity .2.... . . . . . . . . . . . . . . . . . Background .1... . . . . . . . . . . . . . . . . . . . . Project Objective and Description ... . . . . . . . . . 2 Project Design and Organizacion ... . . . . . . . . . . 2 Project Implementation . . . . . . . . . . . . . . . . . . 3 Project Results .... . . . . . . . . . . . . . . . . . 4 Project Sustainability . . . . . . . . . . . . . . . . . . 5 Bank Performance . . . . . . . . . . . . . . . . . . . . . 3 ONGC's Performance . . . . . . . . . . . . . . . . . . . . 6 Project Relationships .... . . . . . . . . . . . . . . 6 Consulting Services .... . . . . . . . . . . . . . . . 6 Project Documentation and Data ... . . . . . . . . . . . 7 PART II - PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . . . . 9 PART III - STATISTICAL INFORMATION ... . . . . . . . . . . 11 Related Bank Loans .... . . . . . . . . . . . . . . . . 11 Project Timetable . . . . . . . . . . . . . . . . . . . . 12 Loan Disbursements ....... .. .. . . . 13 Project Implementation .... . . . . . . . . . . . . . . 14 Project Costs and Financing. . . . . . . . . . . . . . . . 15 Project Results . . . . . . . . . . . . . . . . . . . . . 16 Economic and Financial Impact. . . . . . . . . . . . . . . 16 Financial Performance . . . . . . . . . . . . . . . . . . 17 Status of Covenants ...... . .. . . . . . 18 Use of Bank Resources .... . . . . . . . . . . . . . . 19 Staff Inputs .... . . . . . . . . . . . . . . . . . . . 19 Missions . . . . . . . . . . . . . . . . . . . . . . . . . 20 ANNEXES 1 - Gas Requirement at Hazira ............. . 21 2 - Economic Rate of Return - The Project. . . . . . . . . 22 3 - Economic Rate of Return - The Program ........ . 23 4 - Financial Rate of Return - The Project . . . . . . . . 24 5 - Financial Rate of Return - The Program ... . . . . . 25 6 - Financial Statements .... . . . . . . . . . . . . . 26 MAP IBRD Map 16184R of June 1990. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorizat.on.  - 1 - INDIA SOUTH BASSEIN OFFSHORE GAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT Preface This is the Project Completion Report (PCR) for the South Bassein Offshore Gas Development Project in India for which Loan 2241-IN in the amount of US$222.3 million to India, and onlent to the Oil and Natural Gas Commission (ONGC), was approved on February 24, 1983. The loan closing date of December 31, 1985 was extended three times to December 31, 1988. The final disbursement of Rs 11,884,000 (US$792,000) was made on July 13, 1989 when the Loan Account was closed and the remaining balance of US$3,635,403.87 was cancelled. The PCR was prepared by the Transport and Energy Operations Division, Country Department IV, of the Asia Regional Office (Preface, Evaluation, Summary, Parts I and III). ONGC, the Beneficiary, prepared Part II which is included in the PCR without editing or other alterations. Preparation of the PCR started in January 1990, and is based inter alia on the Staff Appraisal Report, the Loan and Project Agreements, supervision reports and correspondence between the Bank, ONGC and the Borrower.  - li - INDIA SOUTH BASSEIN OFFSHORE GAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT Evaluation Summary Project Objectives The principal objective of the project was to promote the sound and economic utilization of natural gas. This was to be achieved by establishing the basic policy framework and the essential infrastructure for supplying natural gas to India's developing mL:-!et. In addition, the project supported ONGC's strategy of developing known petroleum reserves as quickly as possible (Part I, para. 3.1). Implementation Experience The project was successfully implemented, but the discovery of hydrogen sulfide in the South Bassein gas and procurement deficiencies extended implementation by about four years. ONGC's otherwise creditable - implementation performance was spoiled by the excessively long delays, sometimes compounded by a second round of bidding, in the processing of procurement contracts. ONGC urgently needs to streamline its procurement practices. Expeditious review and approval by Government agencies and at times the Bank, would also help improve ONGC's procurement performance (Part I, paras. 5.1, 5.2 and 5.4). Bidding for the offshore pipeline contract resulted in misprocurement and the cancellation of US$83 million from the Bank loan. This situation arose from ONGC's practice of excluding taxes and duties from offshore construction contracts. This presented no problem until India extended its territorial waters to include the offshore petroleum operations and an Indian firm objected to the pipeline bid evaluation because ONGC could not assume its tax liabilities. The Bank proposed a quick rebid requiring all bidders to add taxes and duties to their bid price. ONGC decided to avoid this delay and awarded a contract funded from its own resources (Part I, para. 5.3). Results The project was successfully completed with a 14Z cost underrun; the objective of providing the necessary wells and facilities to deliver 5 million cubic meters per day (MMCMD), later amended to 10 MMCMD, was fully achieved, though four years later than originally planned. Gas deliveries to Hazira during the four years, when production and desulfurization facilities were nct completed, were supplied from Bombay High which continues to deliver 30Z of the present (June 1990) 10 MMCMD Hazira requirement. The project is economically and financial sound as illustrated by the following comparison of the reevaluated economic and financial rates of return (ERR and FRR respectively) with the values estimated in the Staff Appraisal Report (SAR) (Part I, paras. 6.1-6.3).  -iii ^ SAR Reevaluated Phase I (the Project) ERR 38S 32? FRR 19? 16t Phase I and II (the Program) ERR 49Z 35? FRR 26? 202 Project Sustainability. Based on conservative estimates of South Bassein gas reserves the project benefits anticipated at project preparation should be sustainable for 20 years. There is a risk that actual reservoir performance will fall short of current forecasts and that the expected benefits will not be fully realized. The risk of a significant shortfall, however, is somewhat remote given the thoroughness with which the reservoir's extent and characteristics have been studied. Moreover, it is possible that reservoir behavior will exceed expectations. Accidents can interrupt gas deliveries, but they should be of short duration except for catastrophic offshore pipeline and production facility accldents. It should be pointed out in this regard that such risks - are inherent in offshore petroleum operations and that ONGC has had to date an excellent safety record in operating its offshore facilities (Part I, para. 7.1). Findings and Lessons Learned The high rate of gas production in association with crude oil from the Bombay High field and the satellite fields in combination with marketing and transmission restrictions has made it necessary to flare a large quantity of gas, which presently is of the order of 14-18 MMCMD. This unforeseen development made it possible to supply Hazira requirements initially meant to come from South Bassein with Bombay High gas which otherwise would be flared. In fact, with the required transmission capacity the entire present 10 MMCMD Hazira requirement could have been supplied from Bombay High. With hindsight, it can be seen that much of the Hazira offshore investment could have been deferred and more economically directed at increasing Bombay High gas trans- mission capacity. Also, it can be seen that there is an urgent need for developing gas markets to eliminate, or at least minimize, the wasteful flaring and for more fully utilizing the existing South Bassein production and infrastructure investments (Part I, para. 6.2). ONGC's procurement problems were the single main source of implemen- tation delays. Considering the high economic cost of such delays, it is ur- gent for ONGC to review its procurement practices with the aim of identifying and correcting the causes. The Bank can assist, on projects it helps to fina- nce, by (a) sponsoring appropriate procurement seminars in India, (b) requiring ONGC to minimize the turnover of procurement officers assigned to the projects, and (c) closely monitoring those procurement stages likely to give rise to problems (Part I, para. 9.1).  INDIA SOUTH BASSEIN OFFSHORE GAS DEVELOPMENT PROTECT (LOAN 2241-IN) Project Completion Report PART I - PROJECT REVIEW FROM A BANK PERSPECTIVE 1. Proiect Identity Project Name: South Bassein Offshore Gas Development Project Loan Number: 2241-IN RVP Unit: Asia Country: India Sector: Energy Subsector: Petroleum 2. B&ckground 2.1 Following the oil crisis of 1973, accelerated exploration activity led to India's two largest and most important petroleum discoveries, both in the offshore Bombay area: the Bombay High oil field in 1974 and the South Bassein gas field in 1976. These discoveries were made by the Oil and Natural Gas Commission (ONGC) which was then, and still continues to be, the primary offshore petroleum exploration and production organization in India. The development of Bombay High was supported by two Bank loans (Ln 1473-IN in 1977 and Ln 1925-IN in 1980) which helped finance oil production goods and services and included important provisions for advancing ONGC's technical and institutional capabilities. 2.2 The South Bassein field is located in the Arabian Sea in about 53 meters of water 65 km west of Bombay. By project appraisal an additional 12 wells had been drilled to delineate the large reservoir structure. It was cor.servatively estimated to hold gas reserves sufficient to support the production of 20 million cubic meters per day (MMCMD) of gas (equivalent in heat content to 6.5 million metric tons of oil per year or 20Z of India's domestic oil production) for at least 20 years. The program for developing production from the field consisted of two phases: Phase I designed for an initial capacity of 5 MMCMD implemented by the project and a subsequent Phase II designed to raise the production capacity to 20 MMCMD. 2.3 The development of South Bassein, as its first major gas development, presented ONGC with a new challenge. Aside from the new produc- tion expertise required, the project unlike an oil project not only required optimization in terms of reservoir parameters, but also with respect to future market forecasts which bore directly on sizing and phasing processing, pipeline and marketing facilities. The Bank, therefore, took an active part in discussions with the Government and ONGC concerning the scope of marketing studies, their findings and conclusions. The 5 MMCMD initial phase of production development was chiefly aimed at the manufacture of nitrogen-based  -2- fertilizer and the replacement of liquid fuels. Since industries based on natural gas require sizeable investments, the Bank participated in financing several industrial projects based on offshore gas. 2.4 ONGC, a state-owned statutory body created by an act of Parliament in 1959, was the loan beneficiary and implementing agency for the project. Its Bombay Offshore Project (BOP) group was assigned primery responsibility for carrying out the project. BOP was competent to implement the project with the assistance of consultants vhere special gas p:oduction, transportation and processing expertise was required. 3. Project Objectives and Description 3.1 The principal objective of the pro4ect was to promote the sound and economic utilization of natural gas. This was to be achieved by establishing the basic policy framework and the essential infrastructure for supplying natural gas to India's developing market. In addition, the project supported ONGC's strategy of developing known petroleum reserves as quickly as possible. 3.2 The pruject as originally appraised included the following components for the Phase I development of South Bassein: (a) Offshore platforms (one of each) - drilling, processing, living quarters and flare; (b) South Bassein to Umrat (landfall) pipeline, 36-inch diameter, 217-km long; (c) Umrat to Hazira pipeline, 36-inch diameter, 18-km long; (d) South Bassein to Bombay High gas tie-in, 20-inch diameter, 17-km long; (e) Natural gas liquids tie-in to Bombay High crude oil, 12-inch diameter, 17-km long; (f) Hazira terminal facilities; and (g) Engineering and technical services and reservoir consultancy. 4. Project Design and Organization 4.1 The scope and objectives of the project, which were clearly defined in project documents, were in full agreement with the energy policies of the Government and the Bank. A unique feature of the project was its wide range, encompassing every facet of offshore natural gas production from the drilling of wells to the delivery of gas at the onshore terminal. Implementation arrangements were thorough and well organized under ONGC's offshore BOP group. BOP was well qualified for this task through its wide experience in developing crude oil and associated natural gas production from the Bombay High field. In addition ample provisions were included to back up BOP with technical assistance from expatriate experts. These measures, however, could not have prevented the im.plementation delays which were subsequently encountered. Having to cope with adverse conditicns is not unusual with offshore petroleum  - 3 - projects, but the extent and severity of the project's implementation difficulties could not have been reasonably foreseeii during project preparation. 5. Project Implementation 5.1 The project was successfully implemented, but it was completed four years later then planned (May 1985 planned versus March 1989 actual). There were, however no adverse consequences from the delaye. completion because similar delays were experienced with completion schedules of downstream customers. The South Bassein to Hazira pipeline was completed in September 1985, one year later thLen the target date, but in time to supply the major consumer, the Hazira fertilizer plant, with surplus Bombay High gas through pipeline interconnection installed for this purpose. South Bassein gas was first introduced into the natural gas pipeline system during September 1988. Up to that point surplus Bombay High gas was available to meet the demand. All project components were completed in March 1989 and have been functioning satisfactorily since then. 5.2 A major cause of the completion delay was due to the discovery, shortly after loan approval, of hydrogen sulfide (H2S) in small amounts in the South Bassein gas. This development was completely unforeseen because there had been no previous indications of H2S during drilling in the Bombay High and South Bassein areas. H2S is a highly toxic and corrosive gas which must be removed before natural gas can be used in petrochemical processes and as a domestic fuel -- the former because it "poisons" (deactivates) the catalyst and the latter because of its extreme toxicity. Consequently, extensive changes in project scope were required, namely the addition of a desulfuriza- tion complex comprising gas sweetening (H2S removal), sulfur recover, electricity co-generation and ancillary facilities at Hazira and the institu- tion of stricter metallurgical specifications for piping and drilling material. A second drilling platform and related well drilling equipment were added to the project scope to boost the gas supply capacity from 5 to 10 MMCMD. These changes were expected to add 18 months to the completion date, but actually more than two additional years were required to finish the project. 5.3 A second major problem arose during implementation of the offshore pipeline. It was the practice at the time to exclude taxes and duties from offshore petroleum construction bids. Bidding for the pipeline contract followed closely the extension of India's territorial waters to include the offshore petroleum areas, and it included for the first time an Indian bidder in a joint venture proposal with an American firm. The Indian firm complained that the bidding conditions were unfair because its bid price included taxes and duties for which ONGC legally could not assume responsibility. The Bank suggested a quick rebid--which would have taken only two weeks--requiring all bidders to include taxes and duties in their bid prices. ONGC, however, chose to award the contract to the Indian-American joint venture on grounds that rebidding would make it impossible to complete the pipeline on schedule. This action was contrary to Bank procurement guidelines, and as a consequence US$83 million, the estimated contract price, was cancelled from the loan. Bank staff shares some of the responsibility for allowing the reimbursement provis- ion in the bidding documents, but ONGC must also be faulted for acting too  precipitously i.e. refusing to consider a quick rebid, especially since pipe- line construction was subsequently delayed anyway, even without the rebid. 5.4 Aside from the two problems discussed above, ONGC's implementation difficulties centered on procurement. ONGC did not have the ability to award procurement contracts, for services and goods, without excessively long evaluation and clarification (which tended to evolve into negotiations) periods. At times procurement matters could not be resolved, and a new round of bidding was required. OtIGC's procurement performance showed no significant improvement during the implementation period. The project illustrates that ONGC's practices, along with Government reviews, are badly in need of streamlining. Expeditious project implementation is particularly important for petroleum projects which involve such high costs and benefits which a exceedingly time dependent. 5 5 At the closing of the loan account in July 1989, US$3.6 million in undisbursed funds were cancelled. The cancellation of this amount, although small could have been averted. It was typical of ONGG's inability to execute its procurement affairs in a prompt manner. 6. Project Results 6.1 The project was successfully implemented with a 14Z cost underrun in US dollar terms largely due to (i) a depressed oil industry construction market providing keen competition for contracts and (ii) a higher than estimated local cost conten: in combination with an appreciating US dollar relative to the Indian rupee. The project objective of providing the wells and surface facilities to deliver 10 MMCMD (it was 5 MMCHD before the project was amended) South Bassein gas to Hazira was fully realized. 6.2 The large quantities of gas produced in association with crude oil from the Bombay High field and satellite fields (causing the flaring of 14-18 MMCMD of gas at present) is an unforeseen development. It has in effect inadvertently converted the project into an outlet for Bombay High gas which otherwise would have to be flared. At present (June 1990), approximately 30Z of the 10 MKCMD gas delivered to Hazira comes from Bombay High, and this proportion can increase with the installation of additional compression facilities at Bombay High. Closer coordination of developments at Bombay High and the execution of the project could have brought about some deferment of the project's offshore production investments. 6.3 The project is economically and financially sound as indicated by the following comparison of the reevaluated economic rate of return (ERR) and financial rate of return (FRR) with the values estimated in the Staff Appraisal Report (SAR) for the project and also for the overall program which includes Phases I and II. The reevaluated economic and financial rates of return are very close to the values calculated in the SAR as the result of the following compensating factors: (a) The delay in market development was proportionate to the delay in investment expenditures;  (b) Actual gas deliveries by FY 1990 were twice the SAR forecast (10 MMCMD compared to 5 MMCMD), but the economic cost of gas fell to about 60S of the SAR estimate; and (c) The actual project cost is 142 less than the SAR estimate. SAR Reevaluated Phase I (the Proiet)E ERR 38Z 322 FRR 19X 162 Phase I and II (the Program) ERR 492 35% FRR 262 2o0 6.4 So far, no specific project investments have been made in Bombay High to deliver gas to Hazira. However, with the continued high gas produc- tion of Bombay High as much as 502 of the 20 MMCMD, which is estimated to be required by FY 1994, could be delivered from Bombay High. In this case, the Bombay High compression facilities to make this possible should be included in the program (Phase I and II) investment. THe ERR and FRR would then be 312 and 172 respectively which are satisfactory results. 6.5 The project did not include activities which would cause significant long-term harm to the environment. Those environmental interruptions unavoidably caused by construction activities were of short duration. Effluent from the offshore platforms and the Hazira terminal is adequately treated before disposal. The only potential atmospheric pollutant, sulfur dioxide from the desulfurization process, is converted to elemental sulfur and not allowed to enter the atmosphere. 7. Project Sustainabilitv 7.1 Based on conservative estimates of South Bassein gas reserves the project benefits anticipated at project preparation should be sustainable for 20 years. There is a risk that actual reservoir performance will fall short of current forecasts and that the expected benefits will not be fully realized. The risk of a significant shortfall, however, is somewhat remote given the thoroughness with which the reservoir's extent and characteristics have been studied. Moreover, it is possible that reservoir behavior will exceed expectations. Accidents can interrupt gas deliveries, but they should be of short duration except for catastrophic offshore pipeline and production facility accidents. It should be pointed out in this regard that such risks are inherent in offshore petroleum operations and that ONGC has an excellent safety record in operating its offshore facilities. 8. Bank Performance 8.1 Except for the procurement incident discussed below, the Bank's performance throughout the project cycle was helpful and well directed. The project enabled the Bank to continue supporting the vitally important  6- development of India's offshore petroleum resources. In addition to providing financial support, the Bank was particularly concerned with assisting ONGC's institutional and technical development. Bank sponsored project components directed to this end undoubtedly contributed to BOP's development into the competent offshore bran.ch of ONGC's petroleum operations it is today. 8.2 As practiced on all previous offshore projects, the offshore pipeline bid documents provided that bid prices would be exclusive of taxes and duties. The rationale was that more favorable bids would be received by removing a major financial uncertainty. Furthermore, since operations were outside India's territorial waters, there would in fact be no taxes or duties. However, at the time the pipeline bids were opened two major changes had occurred: India had extended its territorial waters so that they encompassed the offshore operations, and an Indian firm had entered the bidding. The latter created a problem because ONGC legally could not take on the respon- sibility for an Indian firm's taxes. To resolve this problem, the Bank proposed a quick rebid which would require adding taxes and duties to the bid price. However, ONGC decided to proceed on its own with the contract award, which then made it necessary for the Bank to cancel US$83 million (the estimated contract amount) from the Loan. Although there was some merit for excluding taxes and duties, Bank staff should not have approved bid documents containing this provision which were at variance with the Bank's procurement guidelines. The subsequent one year delay in pipeline completion fortunately produced no adverse consequences. 9. ONGC's Performance 9.1 Over the years, ONGC has developed into a full fledged integrated oil company capable of implementing and operating a wide range of oil and gas enterprises. Its big weakness, which detracts from an otherwise creditable performance, was and still is, extensive procurement delays some of which can be of extraordinary duration. About half of the 4 years project completion delay was attributable to procurement problems. Discounting procurement deficiencies, ONGC's performance in implementing the project was entirely satisfactory. It mobilized the necessary technical and managerial resources from within its own organization, and it deployed expatriate consultants to assist in areas where it lacked the requisite skills. Commendably, ONGC had no difficulty in dealing with the extensive project alterations made necessary by the discovery of hydrogen sulfide in the South Bassein gas. 10. Project Relationship 10.1 Bank staff relations with ONGC and government officials were cooperative and cordial throughout the project cycle. This relationship has been sustained throughout the Bank's lending operations in the petroleum sector. Except for some differences in interpreting contract terms, which will arise from time to time, during contract implementation and administration, ONGC appeared to have maintained satinfactory relations with contractors and consultants. 11. Consulting Services 11.1 ONGC employed a reputable Indian consulting firm with wide experience in all aspects of the petroleum industry to assist it in carrying  -7- out the project. Expatriate consultents were appointed to deal vith situations requiring specialized expertise. ONGC states that it had a good relationship with all consultants and that all consultants performed their services in a professional and satisfactory manner. 12. Proiect Documentation and Data 12.1 The staff appraisal report was comprehensive and well prepared. It gave an excellent account of all aspects of the program to develop offshore natural gas resources and the project's role in the program. Moreover, it precisely defined the project, its objectives and execution, all of which were accurately reflected in the legal agreements. The legal agreements were clear and specific and at the same time provided flexibility to readily redefine and amend the project when hydrogen sulfide was discovered. 12.2 Both the supervision reports and the Borrower's quarterly progress reports were informative and useful. However, for both there is room for improvement in format and content to make them more suited for the purpose of preparing PCRs. In general. it can be observed that too much emphasis and effort goes into details which are necessary but not entirely relevant to an analytic approach to project evaluation. It should be a standard requirement that supervision and quarterly reports include the statistical data required for Part III of the PCR.  I  INDIA SOUTH BASSEIN OFFSHORE GAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE (a) Confirmation of the adequacy and accuracy of the factual information contained in Part II of the PCR: The figures indicated by ONGC in the various annexures of Part III are based on actual as per the records maintained. From the informations made available to World Bank in the annexure, it is evident that the actual are very close to the revised estimates. (b) Comments on the Analysis Contained in Part I of PCR Not applicable at this stage. (c) Evaluation of the Bank's Performance during the evaluation and implementation of the project, with special emphasis on lessons learned that may be relevant for the future: The World Bank's procedure did not give any problem while implementing the project. In fact all approvals of the project were obtained in time. The documents for claiming reimbursement were submitted through Ministry of Finance (Controller of Aid and Audit] for the projects financed by World Bank namely Transportation [installation of BPA Process Complex, fabrication and installation of two well platforms, Desulphurization Complex, Gas Sweetening Plant, etc. at Hazira, Technical and consultancy services. The co-ordination between World Bank Mission and ONGC was satisfactory and there was no problem while implementing the execution of projects. With the financial help of World Bank in time the South Bassein Gas Field was developed and the gas was brought to shore for proper utilization. (d) Evaluation of the Borrower's own performance during the evaluation and implementation of the project with special emphasis on lessons learned that may be relevant for the future: The BPA Process Complex. Due to several interface issues between the contractors certain problems were faced during the different stages of project execution but they were smoothly resolved. During the execution of the process complex it was felt that award of the work on a turn key basis would have facilitated the completion of the work. In other projects no major problems, namely physical, financial or managerial were envisaged while executing the work and they were completed within the targeted dates.  - 1n - As per the original plan of financJng. the pipelaying contract for South Bassein Hazira Trunk Pipeline was to be financed. However, the evaluation of bids by ONGC with particular reference to the treatment of Income Tax was not agreeable to by World Bank which ultimately led to surrender of 170 million US dollars of the loan amount of US$222.3 million. Subsequently however, World Bank agreed to amend the loan agreement by extending financial assistance to part of gas sweetening Phase I Project and Bare pipes procurement of South Bassein Gas Development Project. The total financing was however restricted to US$139.9 m. In this regard it may be pertinent to point out the evaluation of the tender for pipelaying as done by ONGC was in full conformity with the procedures prevailing in the country with particular reference to the taxation structure. The work was awarded with the consent of the GOI. This being so, World Bank should have been a little flexible and accommodated the revised evaluation. ONGC on its part however appreciates the significance of framing a comprehensive and firm Bid Evaluation Criteria as indicated bv World Bank. [e] Assessment of the effectiveness of the relationship between the Bank and the Borrower during the evaluation and implementation of the proiect: Although the completion date of the loan agreement was December 31, 1988, World Bank at the behest of ONGC extended it to June 30, 1989. The need for extension arose due to revision in the completion dates for process complex which in turn was necessitated due to change in condition of gas from sweet to sour. This extension helped a lot for the maximum utilization of fund allocated by World Bank for Development of South Bassein Phase I. The documents claiming reimbursement were submitted through Ministry of Finance (Controller of Aid and Audit) upto June 30, 1989. The coordination between the three agencies i.e. World Bank, Ministry of FInance and ONGC was very cordial throughout the implementation of the projects.  - ii - INDIA SOUTH BASSEIN OFFSHORE OAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT PART III: STATISTICAL DATA 1. Related Bank Loans Year Loan/Amount Approved Purpose Status 1473-IN, Bombay 1977 To dovelop tho Bombay High Completed 1980 Offshoro Dovelopment I offshore crude oil and asociated gas production facilitlae, an oil and gas pipelines and onshore terminal facilities. 1926-In, Bombay 1980 Continuation of the offshore Completed 1983 Offshore Development IY crude oll and associated gas production facilities. 2206-IN, Krishna-Godavari 1982 To explore for and dovelop the Completed '989 Petroleum Exploration oil and gas resources of the Projoct Krishna-Godavari Basin 2403-IN, Cambay Basin 1984 To develop Gujarat oil fields In progress 70% Petroloum and evaluste adjacent Complete prospects. 2786-IN, Oil India Petroleum 1987 To develop Assam oil and gas In progress fields and evaluato gas 20% Complete prospects in Rajasthan. 2904-IN, Western Gas 1988 To complete the dovolopment of In progress D-velopment the South Bassein gas field 60% Complete with related onshore facilities and to dovelop Oandher gan field.  12 - 2. Project Tim table item Date Plannod Date Actual Identification January 1980 Preparation August 1981 Appraisal Mission March 1982 Negotiations Novemb r 1982 Nov.mb.r 1982 Board Approval February 1983 Fobruary 1983 Loan Signature March 1983 March 1983 Loan Effectiveness May 1983 June 1983 Loan Closing May 1986 December 1988 Completion roport Decembor 1986  - i3 - 3. Loan Disbursements Cumulative Estimated and Actual Disbursements (USS million) Cumulative Disbursement Actual at S of IBRD FY and Ssmester Actual Revised Project Appraisal Estimate Revised P.oject 1983 Decembor 31, 1983 5.6 3 89.3 4 1984 June 10, .384 5.6 6 173.3 4 December 31, 1984 6.8 27 203.3 4 1986 June 31, 1956 656 28 222.3 4 December 31, 1986 65. 49.9 1988 June 31, 1988 18.8 94.6 13.5 December 31, 1988 30.6 127.9 11 1987 June 30, 1987 104.8 139.3 / 76.2 December 31, 1987 116.2 83.4 1988 June 30, 1988 129.8 93.1 December 31, 1988 131.9 94.7 1989 June 30, 1989 136.7 /b 97.4 L/ USS83 million of the original loan amount (USt4222.3) was cancelled on October 7, 1986. Lb USS3,636,403.87 of the rovised loan amount (US$139.3) was cancelled on July 13, 1989.  - 14 - 4. Project Impl...entation SAR Target Actual Project Component Completion Date Completion Date Central Platform Complex April 1985 March 1987 Well Platforms April 1985 February 1989 Drilling Six Wells January 1985 September 1988 South Bassein-Hazira Pipeline and Connections June 1984 September 1985 Hazira Terminal Facilities Hay 19 1984 November 1985 Desulfurization Complex - March 1989  - 15 - 5. Prolect Costa and Financing A. Proect Costs (USX m"illion) Proloct A argal Revigod Estimate Actul Cost /a Local Foreign Total Local Foreign Total Local For-iegn Total Offshore Platforms Complex and Connecting Pipeline$ 7.6 176.7 184.2 18.8 160-8 179.8 - 169.6 169.6 South Bassein/ Hazira Pipelinc 36.2 293.2 329.4 87.6 167.0 274.6 98.6 183.0 29.6 Hazira Terminal and T-lecom Facilities 16.4 8.7 20.1 12.7 0.6 3.2 (Included with pipeline) Desulfurlzatlon Complex - - - 63.8 83.2 147.0 101.8 23.8 126.6 Engineering and Supervision 23.0 10.1 33.1 17.9 34.4 62.3 8.8 16.0 24.6 Reservoir Consultancy 14.7 - 14.1 14.1 - 14.1 4.2 9.8 14.0 Base Cost Estimate 83.1 497.8 680.9 200.8 480.0 680.8 216.3 419.5 636.8 Physical Contingencies 8.3 49.8 68.1 10.0 31.7 41.7 Price Contingencies 7.4 61.8 69.2 11.9 8.8 20.7 Front End Fe 3. - a 8.8 3.3 - 3.3 3.3 - - Total 98.8 602.7 701.6 222.7 5238. 746.5 219.6 419.5 639.1 Note: Local Costs include taxes and duties. B. Project Financing (US$ million) Appraisal Revised Actual Source Estimate Estimate Financing Supplier's Credit (Pipes) 150 _ Supplier's Credits (Platforms, Drilling Materials, & Thermal Facilities) 100 100 Commercial Banks - 200 - IBRD 222.3 139.3 135.7 KUWAIT FUND 50 50 50.0 ONGC 179.2 257.2 453.4 701.5 746.5 639.1  - 16 - Comment 5.1 The prc,ect was completed with a 142 cost underrun comparing actual costs against the amended project following the discovery of H2S in the South Bassein gas. The principal causes of the underrun are: (a) a depressed oil industry construction market providing keen competition for cont.acts; and (b) the higher than estimated local cost content - 34? vs 14? estimated; in combination with the change in the exchange rate of the US dollar - from Rs 9.0 at appraisal to an average Rs 11.5. 6. Project Results A. Direct Benefits 6.1 The main benefits which will be derived from the natural gas made available by the project are: (a) the foreign exchange savings which are realized through the substitution of the gas for imported liquid hydrocarbon fuels; (b) the reduction in atmospheric pollution where gas displaces pollution producing fuels such as fuel oil, coal and lignite; and (c) the potential benefits from the possession of a versatile indigenous chemical feed stock. B. Economic and Financial Impact 6.2 The economic rate of return (ERR) and the financial rate of return (FRR) were reevaluated using the same methodology as in the Staff Appraisal Report (SAR) for the initial evaluation. Annex 1 gives the gas supply quantities from FY 1983 to FY 2000. Annexes 2, 3, 4 and 5 present the ERR and FRR calculations and the basic assumptions used in the calculations. The SAR and reevaluated rates of return compare as follows: SAR Reevaluated Phase I (the Proiect) ERR 38? 32Z FRR 19? 162 Phase I and II (the Program) ERR 49? 35? FRR 26Z 20Z 6.3 There is a possibility that with the combined high gas production at Bombay High as much as 50? of the 20 MMCMD shipped to Hazira under the full program will consist of Bombay High gas. In this case, the Bombay High  - 17 - compression facilities which will have to be installed to make this possible should be charged to the program investment. The ERR would then be 31? and the FRR 17? in lieu of the respective 35 and 20Z calculated without taking this possibility into account. In either case, the economic and financial returns from the program would remain satisfactory. C. Financial Performance 6.4 ONGC's financial performance for the period FY 1983 to FY 1989 was entirely satisfactory as shown by the performance indicators in the following table. Annex 6 shows the SAR forecast and the actual financial statements over the same time perid. Performane Indi eators (SAR Forocast Ye Actuwl) Fiscal Y*or 1983 1984 1985 1986 1987 1988 1989 SAR Actual SAR Actual SAR Actual SAR Actual Actual Actual Actual Total Sal.c (in RS billion.) 24.8 23.9 32.8 34.7 38.9 40.4 42.1 43.9 58.3 61.1 69.3 Crud aOil Sales (in Ilion ton.) 17.9 17.6 23.7 22.6 27.6 25.5 27.0 26.3 27.7 27.1 28.5 Cos Sales (;n bill ion cu.ns) 2.5 1.9 2.5 2.2 3.4 2.8 5.8 3.3 5.0 5.9 7.0 Nat Profit ms a S of Sale* 7.8 29.0 10.3 23.2 10.0 21.9 9.7 29.7 26.4 ?4.7 23.0 Cur,snt Ratio 1.3 1.2 1.4 1.1 1.5 1.3 1.2 1.3 1.5 1.6 1.8 Debt/Equity 4:585 49:51 48:52 42:56 468 4 40:60 46:54 33:67 32:68 31:69 34:66 06bt Service Covorago (Tissa) 9.9 6.4 7.4 7.9 8.2 4.8 S.s 5.9 5.8 9.6 8.0  18 - 7. Status of Covenants at Loan ClosinR Section Covenant Status Project Agreement: 2.03 Engagement of consultants for In Compliance certain eler.ments of the project. 2.03 Procurement provision In Compliance 2.04 Insurance provisions of goods and In Compliance services 2.05 and 2.07 General provisions for regulating In Compliance activities on the project, project schedule, access by Bank personnel to the facilities and records, etc. 4.02 Furnish Bank with financial In Compliance statements, on a yearly basis 4.03 Reporting economic and financial In Compliance evaluation of project, and yearly review of oil and gas prices to maintain a net of taxes discounted cash flow not less than 152. Loan Agreement: 4.02 Updating and furnishing production In Compliance forecasts on yearly basis, see also Project Agreement section 4.03 4.03 Revision of price of crude and gas In Compliance pursuant to review of project ROR, see also Project Agreement section 4.03.  19 - 8. Use of Bank Resources A. Staff InpIuts Stage of Project Cycle Input (Staff Weeks) Project Preparation 14.2 Project Appraisal 52.7 Loan Negotiations 15.5 Loan Processing 11.5 Project Supervision 104.4 Project Completion 5.4 Project Administration 1.4 Total 205.1  - 2r _ 8. Missions Stage of Month/ Number of Days in Specialization L! Porformance Typos of Proj-ct Cycle year persons field Rating Lb F-.bloms /c Through Appraisal: 1. 4/81 3 10 E, FA, E 2. 8/81 2 6 E, fA 3. 11/81 6 l EC, E, FA, PA, E 4. 3/82 1 6 E Through Effectiveness: 1. 6/82 4 15 E, FA, C, EC Supervision: d 1. 7/83 3 14 fA, E, PA 2 PR 2. 4/84 3 12 FA, E, EC 3 OS 3. 11/84 2 10 E, EC 3 OS, PR 4. 8/85 a 10 E, FA 2 PR, D 6. 3/a6 1 0 E 2 PR, D S. 11/88 2 7 E, E 2 OS, D 7. 8/88 1 6 E I OS, D E = Engineer, EC = Economist, FA Financial Analyst, PA z Procurwemnt Adviser, C a Consultant no minor problems, 2 = moderate probles, 8a = msor problems. PR _Procur-m nt, OS = Oversl IStatus; D a isbursewc t. Supervision mission were generally combined with other beiness In the country and region.  ANNEX 1 INDIA SOUTH BASSEIN OFFSORE CAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT Ga. Requirements at Hazira 1990-91 1990-91 1990-91 1991-92 1991-92 1992-93 1993-94 1994-96 to (Apr-Sep '90) (Oct '90) (Nov-Mar '91) (Apr-Jun '91) (Jul-Mar '92) 1999-2080 A. Consumers at Hazira 183 31 161 91 276 386 386 38S Kribhco 3.20 3.20 3.20 3.28 3.20 3.20 3.26 3.26 lIM 0.60 6.0s 0.65 0.10 6.10 0.16 0.10 0.16 Essar Guj. Ltd. 0. 0. 06 s0 .6 so 0 6.0 0.5so 0.50 0. 0 Reliance Petrochemicals Ltd. 0.60 0.00 6.28 0.66 0.50 9.66 0.50 6.66o Oujarat Cos Co. 0.60 0.06 0.66 0.66 0.10 0.30 0.30 0.36 Sub-Total A 3.70 3.76 3.96 4.30 4.40 4.68 4.80 4.68 B. Gail's Requirement Existing Pert. Plants 4.95 4.95 4.95 4.95 4.96 4.95 4.95 4.95 Anta/Auriya Power Plants 4.60 4.00 4.06 4.66 4.60 4.66 4.60 4.00 Desu Power Plant 1.00 1.06 1.60 1.66 1.60 1.60 1.60 1.60 Intl. Consmn. 0.66 0.30 6.30 0.30 0.30 0.30 6.30 6.36 LPG Shrinkage 0.00 6.30 6.36 0.46 0.96 0.90 0.90 6.90 Dodri Power Plant 0.oo o.00 0.4S 1.60 2.26 2.26 2.26 2.' Neow Fort. Plants (3) 0.00 0.000 0.00 0.00 6.00 0.20 4.16 4.96 Sub-Total B 9.95 10.66 1.00 12.20 13.40 13.60 17.6S 18.36 Comitment Ex-Hazira 13.6s 14.30 14.96 16.50 17.80 18.20 22.15 22.96 Intl. Consm at Hazira 1.60 1.00 1.00 1.20 1.20 1.20 1.20 1.20 Total Requirement Ex-Hazira (Max.) 14.68 16.30 16.9S 17.70 19.60 19.40 23.3S 24.15 Total and Avg *Commi. 2,214.630 378.185 1,913.925 1,378.650 4,456.06t 6,037.100 7,190.500 7,424.100 Reqmnt. EX-Hazura During the Period 11.610 12.136 12.676 16.160 16.200 16.540 19.700 20.340 Avg. L'kely Drawal Ex- Hzira During the Year 12.100 16.940 18.640 19.700 20.340 Avg. Likely Reqmnt. Ex-Hazirs During the Year (Incl. Intl. Consmn. Reqmnt) 13.100 17.140 17.740 20.900 21.540 Base for Cos Demand: Kribhco - 3.2 MMSCMD Other Consumers at Hazira - 90% of Committed Requirement. Cail: (a) Demand schedule for 1990-91 as per CaGl's Letter No. DLH/WTG/ONGC/1010 Dated 12/26/89. (b) Demand schedule for period 1991-92 through 1993-94 as per demand projection" obtained unofficially through lktg. Dept ONGC, New Delhi for which till today there is no off;cial confirmation from Caul. Figures for 1993-94 have been assumed constanL upto 1999- 2000. (c) Gas drawal by Cail considered 80% of their forecast give at (a) and (b) above.  - 22 - ANNEX 2 INDrA South Bassein Offshore Gas Development Project- Ph.-t. I (Loan 2241-1N) Project. Completion Report ERR of Project S Mi Ilion (1990) Gas Prod NGL LPG Revenues Capital Capital 0 & M 0 & M Reosource Net MN cm 000 MT DOOMT costs costs costs cosat rent Benefits SB Haxsra S8 Hczira (depln. Rote $/000 cm/MT 97 138 237 premium) Yr. ending March 1983 24.4 -24.4 1984 117.6 -117.6 1985 113.1 -113.1 1986 82.1 10.2 -92.3 1987 932 90.7 67.6 77.4 -54.3 1988 1273 123.8 15.2 49.9 0 58.7 1989 2520 148 195 311.6 11.0 37.6 42.0 48.3 3.74 168.9 1990 3378 373 238 436.4 10.3 43.1 59.5 6.71 316.8 1991 3511 401 223 449.5 16.2 44.1 61.9 7.96 319.3 1992 3543 390 201 445.9 45.7 62.4 9.03 328.7 1993 3553 423 221 456.3 45.7 62.6 14.68 333.3 1994 3595 465 192 459.1 45.7 63.4 16.64 333.4 1995 359^ 465 192 459.1 45.7 63.4 18.64 331.4 1996 3595 *65 192 459.1 45.7 63.4 20.87 329.2 1997 3595 465 192 459.1 45.7 63.4 23.38 326.7 1998 3595 465 192 459.1 45.7 63.4 26.18 323.9 1999 3595 465 192 459.1 45.7 63.4 29.32 320.7 2000 3595 465 192 459.1 45.7 63.4 32.84 317.2 2001 3595 465 192 459.1 45.7 63.4 36.78 313.3 2002 3595 465 192 459.1 45.7 63.4 41.20 308.8 2003 3595 465 192 459.1 45.7 63.4 46.14 303.9. 2004 3595 465 192 459.1 45.7 63.4 51.68 298.4 2005 3595 465 192 459.1 45.7 63.4 57.88 292.2 2006 3595 465 192 459.1 45.7 63.4 64.82 285.2 2007 3595 465 192 459.1 45.7 63.4 72.60 277.4 2008 3595 465 192 459.1 45.7 63.4 81.32 268.7 ERR,0 32.01 Notes: Gas price is taken at its opportunity cost, calculated On the basis of its use as fuel for power generation at 897/ 1000 cm. Other economic uses of gas in fact would yield higher netback values. NGL price after LPG is extracted is taken *t naphtha export price. LPG price is taken based on Singapore prices plus freight and insurance. Depletion premiui is calculated on the basis of Bassein Sas being depleted in 2015 and LNG (priced at S100/1000cm in that year) being substitute fuel.  -23 - ANNEX 3 INDIA South Bassein Offshore Gas Development Project- Phases I & II (Loan 2241-IN) Project Completion Report ERR of Program $ Mi llion (1990) Gas Prod NOL LPG Revenues Capital Capital 0 & M 0 & M Resource Not MM cm 000 MT OOOMT costs costs costs coats rent Benefits SB Hazira SB Hairra (depln. Rat. $/000cm/MT 97 138 237 premium) Yr. ending March 1983 24.4 -24.4 1984 117.6 -117.6 1985 113.1 -113.1 1986 82.1 10.2 -92.3 1987 932 90.7 77.7 77.4 21.2 -85.6 1988 1273 123.8 49.2 49.9 26.6 -1.9 1989 2520 148 195 311.6 76.5 37.6 46.4 48.3 3.74 99.0 1990 3916 433 276 506.0 55.9 36.2 54.1 69.0 8.30 282.5 1991 4417 505 280 565.4 39.8 27.2 59.7 77.8 10.94 350.0 1992 5818 640 330 732.2 63.6 1C2.5 17.43 548.6 1993 6037 719 376 775.3 63.6 106.4 24.95 580.3 1994 7191 929 384 918.3 63.6 126.7 33.28 694.7 1995 7191 929 384 918.3 63.6 126.7 37.27 690.7 1996 7191 929 384 918.3 63.6 126.7 41.74 686.2 1997 7191 929 384 918.3 63.6 126.7 46.75 681.2 1998 7191 929 384 918.3 63.6 126.7 52.36 675.6 1999 7191 929 384 918.3 63.6 126.7 58.65 669.3 2000 7191 929 384 918.3 63.6 126.7 65.68 662.3 2001 7191 929 384 918.3 63.6 126.7 73.57 654.4 2002 7191 929 384 918.3 63.6 126.7 82.39 645.5 2003 7191 929 384 918.3 63.6 126.7 92.28 635.7 2004 7191 929 384 918.3 63.6 126.7 103.36 624.6 2005 7191 929 384 918.3 63.6 126.7 115.76 612.2 2006 7191 929 384 918.3 63.6 126.7 129.65 598.3 2007 7191 929 384 918.3 63.6 126.7 145.21 582.7 2008 7191 929 384 918.3 63.6 126.7 162.63 565.3 Please see footnote under the ERR table for Phase I. on prices. ERR- 35.41  - 24 - ANNEX 4 INDIA South Hassein Offshore Gas Development Project- Phase I (Loan 2241-IN) Project Completion Report FRR of the Project Rs. Million (19 90 terms) Gas Prod NOL LPG Revenues Revenues Capital Capital 0 & M 0 & M Deprcn. Tax Net :ash MM cm 000 MT OOOMT Gross oxc.otate costs costs costs costs flow l.vies SB Hazira SB Hazire Rate/000 cm/MT 1836 1664 1892 Yr endLng March 1983 450.5 -450 5 1984 2172.3 -2172 3 1985 2088.8 -2088 3 1986 1516.4 188.9 .'705 3 1987 932 1711.7 1305.5 1247.6 1430.1 283.5 1122.0 -1655 7 1988 1273 2337.2 1782.5 279.8 922.5 387.1 757.7 361 9 -168 3 1989 2520 148 195 5241.2 4066.3 203.8 694.8 775.5 766.2 2777.7 0 0 1626 1990 3378 373 238 7273.3 5695.2 190.1 795.9 702.6 2157.6 1157.2 2849 1991 3511 401 223 7534.5 5902.1 814.9 737.8 1508.3 1612 3 2737 1992 3543 390 201 7533.0 5894.8 814.9 774.7 1010.6 1869.7 2435 1 1993 3553 423 221 7645.8 5994.1 855.7 813.4 677 1 2070.2 2254 3 1994 3595 465 192 7735.9 6073.4 898.5 854.1 453.6 2194 6 2126 2 1995 3595 465 192 7735.9 6073.4 943.4 896.8 303.9 2229.9 2003 . 1996 3595 465 192 7735.9 6073.4 990.5 941.6 203.6 2234 6 1906 i 1997 3595 465 192 7735.9 6073.4 1040.1 988.7 136.4 2217 9 1826 7 1998 3595 465 192 7735.9 6073.4 1092.1 1038.1 91.4 2185.9 1757 3 1999 3595 465 17 2 7735.9 6073.4 1146.7 1090.0 61.2 2142 6 1694 : 2000 3595 465 192 7735.9 6073.4 1204.0 1144.5 41.0 2090 6 :634 3 2001 3595 465 192 7735.9 6073.4 1264.2 1201.7 27.5 2031 6 1575 9 2002 3595 465 192 7735.9 6073.4 1327.4 1261.8 18.4 1966 8 1517 3 2003 3595 465 192 7735.9 6073.4 1393.8 1324.9 12 3 1896 8 1 57 9 2004 3595 465 192 7735.9 6073.4 1463.5 1391.2 8.3 1821 9 1396 8 2005 3595 465 192 7735.9 6073.4 1536.7 1460.7 5.5 1742.5 1333 5 2006 3595 465 192 7735.9 6073.4 1613.5 1533.8 3.7 1658 5 1267 J 2007 3595 465 192 7735.9 6073.4 1694.2 1610.5 2.5 1569 9 1198 9 2008 3595 465 192 7735.9 6073.4 1778.9 1691.0 1.7 1476 6 1127 3 FRR- 15 8 Notes (1) Prodi.ct Qty. Price Royalty Sales tax Excise Cose TPT BPT Total Gas 1000 cm 1400 140 295.7 1835.7 NGL One MT 1600 64.0 1664.0 LPG One MT 1546 72 8 273 1891.8 Crude One MT 1027 192 29 900 25 18 2191.1 (2) Deprcn at 332, ?iminiahing balance (3) Methodology as in SAR has been followed in calculatin FRR. But Bassein activitiee a are only a part of ONGC's total activities. Taking into account interest payable on loans which are tax deductible, also foreign exchange losses, it is seen that the income tax incidence on ONGC as a whole has been and will be of the order of 30S. 4eginet the nozcal 56.755 assumed in the above table. If 30 1 is taken as the actual corporate tax the FRR will the FRR will be 20.2S.  ANNEX; INDIA South Bassein Offshore Gas Development Project- Phases I & II (Loan 2241-IN) Project Completion Report FRR of the Program Rs. Million (19 90 terms) Gas Prod NGL LPG Revenues Revenues Capital Capital 0 & M 0 & M Deprcn Tax Net cash MM cm 000 MT oooMT Gross Not of SL costs costs costs costs flow SB flazira SB Bazira Rate RS/OOOcm/MT 1836 1664 1892 Yr. ending March 1983 450.5 -450 ' 1984 2172.3 -2:72 3 1985 2088.8 -2 ^88 8 1986 1516.4 188.9 -17C5 3 1987 932 1712 1305 1114.3 1430.1 622.8 283.5 1122.0 -2145 2 1988 1273 2337 1782 768.4 922.5 734.2 387.1 757.7 -1029 7 1989 2520 148 195 5241 4066 1298.6 638.6 811.1 766.2 2894 9 551 3 1990 3916 433 276 8432 6603 1032.1 668.6 940.9 814.6 2578.9 1287 2 1859 2 1991 4417 505 280 9477 7424 734.9 501.9 1044.1 855.3 2289.1 1836.1 2451 6 1992 5818 640 330 12369 9680 1117.6 898 1 1941.8 3247.2 4416 s 1993 6037 719 376 12990 10184 1173.5 943.0 1301.0 3839 8 4227 1994 7191 929 384 15472 12147 1232.2 990.1 871.7 5137 4 4787 1995 7191 929 384 15472 12147 1293.8 1039 7 584 0 5237 6 4575 7 1996 7191 929 384 15472 12147 1358.5 1091 6 391.3 5280 8 4415 9 1997 7191 929 384 15472 12147 1426.4 1146 2 262 2 5284 5 4289 6 1998 7191 929 384 15472 12147 1497.7 1203.5 175 7 5260 6 4184 9 1999 7191 929 384 15472 12147 1572.6 1263.7 117 7 5216 9 4v93 6 2000 7191 929 384 15472 12147 1651.2 1326 9 78.9 5158 5 .0io 2 2001 7191 929 384 15472 12147 1733 8 1393 2 52.8 5088 7 3931 1 2002 7191 929 384 15472 12147 1820.5 1462.9 35 4 5009 9 3853 5 2003 7191 929 384 15472 12147 1911.5 1536.0 23.7 4923 3 3775 9 2004 7191 929 384 15472 12147 2007.1 :612.8 15 9 4830 0 3696 9 2005 7191 929 384 15472 12147 2107.4 1693.5 10 6 4730 2 3615 f 2006 7191 929 384 15472 12147 2212.8 1778.2 7.1 4624.4 3531 4 2007 7191 929 384 15472 12147 2323.5 1867.1 4.8 4512 5 3443 8 2008 7191 929 384 15472 12147 2439.6 1960 4 3 2 4394 4 3352 3 FUR- 19 81 ---------------------- Lviea(SL)------------------ Total Notes (1) Product Qty Price Royalty Soles tax Excise Ccsa TPT BPT Gas 1000 cm 1400 140 295.7 1835.7 NGL One MT 1600 64.0 1664.0 LPG One MT 1546 72.8 273 1891.8 Crude One MT 1027 192 29 900 25 18 2191 1 (2) Deprcn at 33S, diminishins balance ;3) Methodology as in SAR has been followed in calculatin FRR. But Bassein activities a are only a part of ONGC's total activities. Taking into account interest payable on loans which are tax deductible, also foreign ezchange losses, it is seen that the income tax incidence on ONGC as a whole has bean and will be of the order of 301, against the normal 56.75S assumed in the above table. If 30 1 is taken as the actual corporate tax the FRR will the FRR will be 24.6S  ANNEX 6 INDIA SOUTH 8ASSEIN OFFSHORE CAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT ONOC Income Statseents (Mi llion Rupees) Fiseal Yesr 1983 1984 1985 1986 1987 1988 1989 Ending March 31 SAR Actual SAR Actual SAR Actual SAR Actual SAR Actual SAR Actual Actual Oseratino Re,enues Offshore 17,647 26,695 30,138 32.107 34.343 36,378 Onshore 7 199 8.070 8 754 9.963 1021 11 221 Total 24.846 23.856 32,765 34,728 3i. 892 40,350 42,070 43.879 45,064 66,273 47,5S9 61,073 69.724 Opgratina Expenses Offshor* Operating Costa 797 1,263 1.535 1,519 1.506 1.,05 Sales Tax/Royalty/Cess 2.654 3,867 4,656 4.670 4.890 1,996 Deprec.ation/Depletion 4.446 6 215 14 412 1040 9. 99 Subtotal 7.869 11,345 20.605 16,589 16.239 16,467 Onshore Operating Costs 360 432 490 540 646 546 Sales Ts./Royalty/Cose 1.234 1,394 1,506 1.704 1,829 1.916 Deprec.at.on/Depletion 1.241 2135 2680 3898 L S Subtotal 2,835 3,961 4,676 6,142 7,070 10,755 Total Operating Ewpenses 11,155 17,767 22.738 23,317 34.010 39.905 48.009 Operating Inco.e Offshore 9,778 13,350 9,533 15,518 18,104 19,911 Onshore 4.364 4.109 4.078 3.821 2.851 466 Total Operating Income 14.142 12,701 17,459 16,961 13.611 17.612 19,339 20.562 20,955 22,263 20.377 21,169 21,714 Other Incone 14 _ __ Total Incoes 14.156 12,701 17,459 15,961 13.611 17,612 19,339 20.562 20,955 22.26S 20.877 21,169 21,714 Less Interest 1.343 873 2.387 884 3.575 1.338 4,581 1,580 5,!585 1.214 6.001 746 769 Tax 5 024 4.900 4,741 8 _20 -- 7,450 S078 5 960 0_J 6 205 4.084 5.347 4 930 Net P,of,t 7.789 6.929 10.331 8,057 10,036 8.824 9.680 13,022 10.264 14,845 9,489 15,075 16,016 Rate of Return on Not Assets (t) Offshore es 8 68 9 27 5 31 4 33 1 34 4 Onsh-re 93 4 53 9 35 1 21 7 10 8 1 3 Co..b,ned 8h, 0 64.7 29 3 28 9 25.9 21 8  ANNEX 6 VT-2 SOUTH BASSEIN OFFSHORE CAS DEVELOPFMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT ON_C Sources and Applications of Funds (Mi l lon Rupees) Fiscal Year 1983 1984 1985 1986 1987 1988 1989 Ending March 31 SAR Actual SAR Actual SAR Actual SAR Actual SAR Actual SAR Actual Actual Funds Provided from Operations Operating Income 14.142 12.702 17,459 16,691 16.611 17,612 19,336 20.562 20.955 22,26e 20,377 21.169 21.714 Depreciation 5.687 4.965 S 6.112 17.09 8 14.298 6;, 15369 660I 1 8257 9.01 10L Subtotal 19.829 17.667 25,809 23,073 30,703 26,395 33,637 26,923 36,324 28,884 38,634 S0.787 31.741 Deduction Di;idend, 206 274 206 309 206 326 206 343 206 360 206 403 514 Debt Service: Principal 656 1,112 1,099 1,269 1.384 1,095 1.564 2.496 3.525 1,214 4,802 746 761 Intereat 1,343 873 2.387 884 3,575 1.338 4.581 1.560 5,585 6,205 6,004 5,347 4.930 Income la. 5.024 4,900 4,701 8.020 -- 7,450 5.078 5.960 5,106 -- 4,684 -- -- Workiing Capitol Increase (E.cluding Cash) 529 735 587 693 _778 4 452 72 3.517 896 4Aa 410 2 307 220 Subtotal 7.758 7,895 9,020 11,174 5,943 15,460 12,141 13,896 15,316 23,402 16,ZD9 14,159 8,417 Add itiona Other Incom 14 -- __ __ __ __ __ __ __ __ Funds Available for lv--tment 12.085 9,773 16,789 11.896 24.760 10.935 21,496 13,028 21,006 6,402 22,328 16.828 23,323 Investment Program 7 008 13.589 29.298 14.985 32.644 16.717 30.663 17363 302 1029 2214 895 -- 8alance to be Financed 4,923 3.817 12,509 3,086 7.884 5,783 9,167 4,535 9,262 13.6S7 3,886 2.130 -- Financed By CO Equity Contributions -- -- -- Borrowings 5,064 7,667 12,504 3,943 8,006 5,893 9,860 4.861 9,600 15.481 4,400 10.384 -- OID8 32 _-- 35 _- 40 __ 40 -- * ~ ^ ~~ Total Outeide Financing 3,096 7,667 12,539 3,943 8 046 5,893 9,420 4,861 9,640 15.461 4,400 10,84 -- Increase (Decrease) in Cash 173 16 30 76 162 S 253 241 378 547 554 878 -- Cumulative Cash 267 168 297 92 459 96 712 337 1,090 884 1,644 5 __ Debt Sernice Coverage 9.9 6 4 7.4 7.9 6 2 4.8 5 5 5.9 4.0 5.8 3.6 9.6 --  ANNEX 6 M14IA SOUTH BASSEIN OFFSHRtE GAS DEVELOPMENT PROJECT (LOAN 2241-IN) PROJECT COMPLETION REPORT ONCC 8la1*nce Sheet (M i rI ,on Rupees) Fiscal Yer 1983 1984 1985 1986 1987 1988 1989 Ending Msrc% 31 SAR Actual SAR Actual SAR Actual SAR Actual SAR Actual SAt Actual Actual Aets Current Assets Cash 267 168 297 92 459 96 712 S37 1.090 884 1.664 5 103 Accounts Receinable 1,477 3,216 1,983 2,506 2,365 4,046 2.540 3,971 2.669 5,041 2,8t8 6.362 8,338 Staff Advances 236 4,005 296 4,666 366 5,910 446 8,870 526 10.810 52t 11.104 ls.t40 Irventories 2,432 7,873 2,712 18,265 3,272 28.310 3.828 30,305 4.566 27.804 5,106 27.068 24.959 Oth., t1193 --1.19 19 1 193 -- 1.193 11 913 _ -- Subtotal 5,605 17,262 6,481 25.829 7,655 38,371 8,719 43,491 10.064 44,639 11,337 44.526 45.963 Property, Plant *nd Equipment Offshore Cross Assete 24.926 39,589 76,517 93.440 107.468 119.672 Less Accumulated Depreciation 9.769 15 93039 40.790 6056 60563 Offshore Not Asset. 15.157 23,605 46,121 52,644 56,798 58,938 On.hore Gross Aesets 14,265 20.118 27,089 38.717 53,836 70,732 Lees Accumulated Depreciation 8.504 10.639 13310 17.21 22.71 31 Onshore Not Assets 5,761 9,479 13,770 21,500 31,124 39,727 Totel Net Property, Plant *nd Equipment 20,918 33.084 59,891 74,144 87,922 98,665 Vork in Progres. Offshore 5,756 13,957 2,384 2.593 2,861 1.723 CD Onshore 953 1534 1.82 37 46 20 Subtotal 6,709 25,491 4,236 6,348 7.469 4.683 Long-Term Investments 250 250 250 250 2250 Total Assets 33 482 ;45478 55,306 63.021 72,032 83.834 89.461 10.073 105.705 115 S II,114 935 ,La 0 1 1_60 Liabilities and Shareholder Current Liabilities Accounts Payable 1,969 13,430 2.158 21,082 2,292 29,466 2.292 30.829 2,212 26,676 2,231 25,235 25,487 Current Portion Long-Ter Debt 1,099 1,274 1.384 1,921 1,564 1.910 3.535 2,770 4,802 2,224 4,035 2.570 -- Other 1.093 __ 1.163 __ 1- .26 _136_3 __ 1 .51 .. 1 713 ---_ Subtotal 4.161 14,704 4,705 23.001 5.119 31.376 7,179 33,598 8.527 28,900 8,069 27.805 25,487 Lo,.a-Ter. Debt 13.551 16,130 24.956 18,805 31,578 22.803 39,394 25,168 45.469 29,579 45,067 3.407 46.572 Less Current Portion _1009 1 274 a _384 1,921 1564 1.908 _ 5-35 2.7 4.A82 224 4 03 2.7 67 Subtotal 12.452 14,057 23.572 16,883 30,014 20.874 35.869 22.398 40,667 27,358 41,032 32,037 46.571 Crtu.it-s -- 257 -- 317 -- 353 -- 385 -- 421 -- 459 488 Shareholder Equity Cap.tal 3.429 3,429 3.429 3.421 3.429 3,429 3.429 3,429 3,429 3,429 3.429 3,429 3,429 Res-rv 13.440 12.575 23 600 20424 33 470 28 972 42 984 41. 615 53 08 _Z2405 70778 _3 Subtotal 16,869 16.361 27,029 24,168 36,899 32.714 46.413 45.428 56,511 59,755 65,834 74,665 90.245 Less Intang.bles -- 424 -_ 234 -- 1.149 -- 352 -- 405 -- 661 695 Total L,ab,l,t,es and Sharekolder Eou ty 33.482 45 478 55 306 63.021 72 302 83 834 89 461 101 073 105 705 115,805 114 935 133.841 161.608 Debt Debt Plus Fqu,ty 45 49 48 40 46 40 46 .33 45 31 41 30 34 Current Rat,o 1 3 1 2 1 4 1 1 1 S 1 2 1 2 1 3 1 2 1 5 1 4 2 6 1 8  G U J A R A r G V J A R A Y SOUTH BASSEIN OfFSHORE GAS tdwo 1 8in DEVELoPMENT PROJECT. -- BOMBAY OFFSHORE AREA so0uIi F.-t N-,ro GI RG...... , R.--oD_n O F.u,. trp s PIbl.,f/ \ < xG U{v TT CV4IVI- _v \ MlsZh N-1os t- sivm / r 6 26dC l6bh V1-1 GTXF0, N--F SRoabldru. ls- 8- I ~E.I'll, C11hO1IOttA, TR)AA\I ~_% Exlstzng Dztr.bs~~~~~5Tiolms UR( b9t9' e bEnrnmles t {-5 / D/L/Stf<< / dl~~~~~FqROh:R> - 66. 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