Refer to the extracts from annual report 2005-06 of the Oil and Natural Gas Corporation Ltd. regarding valuation of its oil and gas producing properties as per the successful efforts method of accounting and related significant accounting policies as illustrated in this chapter.
Having gone through the information provided therein, answer the following questions:
1. What are the broad characteristics of the operations of ONGC?
2. The valuation of oil producing properties by ONGC is so different from the principles of valuation of general fixed assets as studied by you. What considerations guide this treatment?