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ONGC spending Rs 83,000 cr to execute 25 projects: Shashi Shanker, Chairman
Oil and Natural Gas Corporation (ONGC), the country’s largest oil and gas producer, is currently executing 25 exploration and production (E&P) projects worth Rs 83,000 crore to monetize about 180 million tonne of oil equivalent (MMToe), said ONGC’s Chairman Shashi Shanker, in their Annual Report 2018-19.
The company plans to spend close to Rs 32,920 crore in the financial year 2019-20 (FY20), a 12 percent jump in spending as compared to Rs 29,449 crore spent in the previous financial year.
“As many as 25 projects, with an estimated outlay of around Rs 830,000 million, are currently under execution, of which 15 would directly contribute to hydrocarbon production. Envisaged cumulative oil and gas gains from these projects through their lifecycle stand at over 180 MMtoe,” said Shanker.
According to Shanker, the company completed 10 E&P projects in 2018-19 at the cost of Rs 11,258 crore and besides focussing on ramping up production through the development of greenfield projects, the company also plans to focus on ramping up production from the existing portfolio of mature fields.
The upstream giant expects 190 million tonne of incremental oil production from 29 enhanced oil recovery (EOR) projects. Moreover, one-third of the company’s standalone crude oil production in the current financial year came from EOR projects.
“There is significant scope to increase production through EOR technologies in the mature fields. ONGC has been a pioneer in the implementation of EOR technologies in India both in onshore and offshore fields. Presently, EOR projects contribute 9 percent of total onshore production,” Shanker said.
The company is currently implementing various EOR projects in the company’s oil and gas assets in Gujarat, Assam, and Mumbai.
The company drilled 516 wells in the last financial year, consisting of 105 exploratory wells and 411 development wells.
According to Shanker, the company is following a roadmap to strategically brand itself as an ‘energy’ company and not just an oil and gas producer.
“The ONGC Board recently approved the business roadmap for the company and its other group entities – ‘ONGC Energy Strategy 2040’. It envisions ONGC as ‘A diversified energy company with a strong contribution from non E&P businesses; 3x revenues and ~5x to 6x market capitalization’. It aims to transform ONGC into a future-ready energy entity, one that positions itself well to respond to the challenges and opportunities of tomorrow’s energy scene,” Shanker said.
ONGC had earlier in June this year invited partners to help the company enhance production from 64 marginal fields. The announcement came on the back of increased pressure by the government on the company to increase production profile from nomination blocks.
The government had shelved proposals to farm out or privatize ONGC fields twice in the past five years, according to a recent report by news agency PTI. The proposal was a result of the continued drop in production.
ONGC’s crude oil production in FY19 from its nomination fields fell to its lowest level in 16 years; from a high of 26,485 thousand metric tonne (TMT) recorded in 2004-05 to 21,042 in 2018-19. The worrisome trend is mainly attributed to drop in output from nearly all the offshore and onshore blocks in ageing fields.
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