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Even as ONGC set to invest Rs 30,000 cr in FY18, oil output likely to fall, but gas supply to rise
Posted on 17th March 2017
Despite state-owned ONGC likely to keep its capital expenditure budget at R30,000 crore in FY18 — this does not include the R8,000 crore it has to pay GSPC if the deal closes — its oil output is likely to fall slightly while gas supplies will rise by over 1 billion cubic metres (bcm). This is based on internal estimates made by ONGC for the next financial year.

Apart from being under fire from the Directorate General of Hydrocarbons (DGH), which has been asked to monitor its production especially in the larger fields, ONGC is in the news for its likely takeover of refining-marketing PSU HPCL.

While all oil and gas fields show a declining production profile as they age, what is odd about ONGC’s fall in production — oil production has fallen from 26.9 million tonnes in FY12 to 25.9 million tonnes in FY16 — is that the oil PSU is reporting a continuous increase in its reserves at the same time. In FY12, while it reported a 167 million tonnes of oil equivalent (mtoe) increase in in-place reserves, it estimated 58.7 mtoe as recoverable. In FY16, while it reported 65.6 mtoe of fresh recoverable reserves, it took out a lower 48.5 mtoe of oil and gas.

ONGC, according to its internal targets, is likely to drill 110 exploratory wells in FY18 and 386 development wells.

It drilled 91 exploratory wells in FY16 and is expected to drill 97 wells in FY17 against a target of 120, as reported by FE earlier.

The national oil explorer is under pressure as the company’s oil production has fallen from 26.92 million tonnes (mt) in financial year 2012 — the year since when the company’s production has been falling each year — to 25.93 mt by financial year 2016, gas production during the period fell from 25.51 bcm to 22.53 bcm. However, gas production target has been elevated to 25 bcm for FY18 though the oil production is expected at 25.3 mt.

Taking cognisance of the sustained fall in production over the years, the DGH plans to push more ONGC fields into production enhancement contracts, as reported by FE earlier.

“We are focusing heavily on activity budgeting to control cost overruns,” said an ONGC executive requesting not to be named. According to estimates, cost overruns in, say, drilling wells go beyond more the twice the initial estimates at times. The estimate for drilling exploratory wells for FY17 is around Rs6,000 crore.

The company is stressing on early monetisation of its wells to increase production, and out of the 17 discoveries notified till date this financial year, eight have been already monetised. “Some more discoveries are expected to be notified in this month’s board meeting,” said another ONGC executive who also did not want to be named.

Related Companies: Oil and Natural Gas Corporation Limited (ONGC)   

Other Latest News
Coal supply gap remains
Posted on 21st July 2017
 
Calcutta, July 20: Coal imports by India will continue despite efforts by the Centre to step up production to bridge the demand-supply gap. Market analysts expect both thermal and coking coal prices to fall in 2017-18, thus bringing down the import bill marginally.

Union coal and power minister Piyush Goyal said in the Lok Sabha today that the coal demand-supply gap will continue.


Coal supply gap remains
Posted on 21st July 2017
 
Calcutta, July 20: Coal imports by India will continue despite efforts by the Centre to step up production to bridge the demand-supply gap. Market analysts expect both thermal and coking coal prices to fall in 2017-18, thus bringing down the import bill marginally.

Union coal and power minister Piyush Goyal said in the Lok Sabha today that the coal demand-supply gap will continue.


 
Mumbai: The Indian rupee on Friday strengthened marginally against the US dollar tracking gains in the local equity and Asian currencies market.

The rupee closed at 64.32 a dollar, up 0.17% from its Thursday’s close of 64.43. The rupee opened at 64.39 a dollar and touched a high and a low of 64.30 and 64.40, respectively.


 
New Delhi: German luxury carmaker Mercedes- Benz today launched AMG GLC 43 Coupe in India priced at Rs74.8 lakh (ex-showroom Delhi).

“This new SUV Coupe is going to be a key addition to our 43 AMG line and will be instrumental in further popularising the 43 AMG range to a new customer base,” Mercedes-Benz India managing director and chief executive officer (CEO) Roland Folger told reporters here.


 
Markets regulator Sebi has asked MCX Biz Solutions and its proprietor Syed Sadaq to return the money collected from investors after finding them guilty of duping investors through false documents. Besides, they have been barred from the securities markets for 10 years. Sebi said the company allegedly solicited money from investors promising huge returns while using fake and forged broker registration documents and a name similar to that of an exchange group. The entity has no relation to the Multi Commodity Exchange (MCX). The entities had also made representations and statements on their website about their activities in securities market in an “entirely untruthful manner”.

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