ONGC to complete 12 projects worth Rs 13,000 cr by May 2016
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State-owned petroleum explorer Oil and Natural Gas Corporation (ONGC) announced it would be implementing 12 projects worth a combined Rs 13,000 crore by the end of May 2016, seeking to gain from low oilfield services and equipment costs in the current depressed crude oil price scenario.
“Nine projects with an investment of around Rs 22,000 crore have already been completed till now in 2015-16,” Chairman and Managing Director D K Sarraf told shareholders at the 22nd annual general meeting here.
He added the board of directors had since April 2014 approved implementation of five development projects of around Rs 20,000 crore. These included the Integrated Daman Development, Enhanced Recovery from Bassein and Additional Development of Vasai East projects.
“With a capital outlay of over Rs 14,500 crore, ONGC has also moved into the next phase of its re-development programmes for some of the prolific western offshore fields — Mumbai High North and Mumbai High South and Neelam,” Sarraf said.
Globally, he added, the oil and gas sector faced challenging times due to the collapse of crude prices, now below $50 a barrel. Among the causes were lower demand growth from China, slow recovery in developed economies and steady build-up of new supplies, backed by strong North American output.
“While many of the global E&P (exploration and production) companies have responded by cutting investment, ONGC takes this as an opportunity to build its assets in this environment of lower costs as well,” he said.
“Important projects have been given the go-ahead for development and more proposals to monetise our reserves are under various stages of finally being approved. Having reversed the decline in crude oil production in 2014-15, ONGC is now fully focused on implementing programmes to raise output from ageing and old fields.”
The latter programmes had resulted in about a third of ONGC's crude oil production during 2014-15. Sarraf said they'd invested Rs 36,187 crore in these projects and realised an incremental oil gain of close to 95 million tonne till FY15.
Sarraf refused further comment on ONGC's claim that Reliance Industries had stolen natural gas worth Rs 30,000 crore from the former's KG-DWN-98/2 and Godavari PML blocks. He said the high court here had given time to the government to act on the report of the international consultant appointed to look into the matter.
The company said its foreign arm, ONGC Videsh (OVL), had given a $10 billion proposal to Iran for developing the Farzad-B gas field in the Persian Gulf and shipping the gas to India. ONGC had discovered the 12.8 trillion cubic ft of gas reserves in the Farsi block in 2008.
"In April, we met in Iran and as per discussions, we have worked out a fully integrated proposal and submitted to Iranian authorities. Iran had asked for a plan for developing the field as well as options for taking the gas. A fully integrated proposal with lots of options has been submitted," OVL Managing Director Narendra K Verma said.
ONGC has notified three new discoveries in the current financial year taking the total number of discoveries in the fiscal year to seven. Last fiscal, the explorer had made 22 new oil and gas discoveries.
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