News: Cash pile for oil security - ONGC confident overseas, uneasy at home

(TT 14/08/2006) Dehradun - The Oil and Natural Gas Corporation (ONGC) plans to equip its foreign arm, ONGC-Videsh (OVL), with a war chest of Rs 50,000 crore during the Eleventh Five-Year Plan (2007-12). The company was allocated Rs 15,300 crore during the tenth plan.

At the same time, ONGC will invest Rs 80,000 crore in oil and gas hunt in the country during the eleventh plan. ONGC has set a long-term target to raise its oil output to 110 million tonnes by 2020.

The proposals were unveiled here today by senior ONGC officials in the presence of petroleum minister Murli Deora at the company’s golden jubilee function.

Deora said ONGC would focus on the upstream oil exploration and production — its core area of competence. However, projects such as the petrochemical complex at Mangalore, which the company has already taken up, would continue, he added.

Riding on its success in Russia’s Sakhalin I and Sudan’s Greater Nile oilfields, OVL has expanded its stakeholding to 24 oil and gas assets across 14 countries.

OVL, which produces close to 5 million tonnes of oil per year, is expected to play a major role in securing the country’s energy security. ONGC expects to get as much as 20 million tonnes of oil per annum through OVL’s investments.

ONGC chairman R.S. Sharma said there was no move to shift the company’s headquarters from Dehradun where it was founded by former Prime Minister Jawahar Lal Nehru and the then petroleum minister K.D. Malviya.

Sharma said the company initially produced only 0.2 million tonnes of oil. It has come a long way since then with discoveries in Mumbai High despite foreign multinationals declaring that there was no oil to be found in India.

“Over these 50 years, ONGC has discovered 6,400 million tonnes of oil and oil-equivalent gas through 33 discoveries in India,’’ he added.

However, ONGC has made no major oil or gas discoveries in recent years. With crude prices hitting record highs, the company is now thinking of putting some of its marginal fields into production.