ONGC to draw perspective plan to integrate business
New Delhi: State-owned Oil and Natural Gas Corporation will draw a new perspective plan to integrate recent acquisition HPCL and just commissioned petrochemical unit with its mainstay oil and gas exploration and production operations, its Chairman and MD Shashi Shanker said.
The nation's largest oil and natural gas producer is keen that its recent diversification into refining business as also petrochemicals is leveraged to full by integrating them with its core business.
"Post-acquisition of Hindustan Petroleum Corporation Ltd (HPCL) and commissioning of OPaL petrochemical plant at Dahej (in Gujarat), the company is drawing up a perspective plan to achieve proper synergies from the integration to maximize value, optimize cost and enhance efficiency," Shanker said.
Synergies like the use of naphtha and other liquid hydrocarbons ONGC produces in the petrochemical unit set up by ONGC Petro-additions Ltd to produce value-added products as well as integrating refining stream of HPCL with company's existing subsidiary, Mangalore Refinery and Petrochemicals Ltd can result in huge opportunities, he said.
"ONGC today is chasing the hydrocarbon molecule to the last mile to derive the best value from it at the minimal cost," he said, adding the company wants to put in place a well-knit strategic plan to bolster its presence in the entire hydrocarbon value chain.
ONGC earlier this year bought government's entire 51.11 per cent stake in HPCL for Rs 36,915 crore, adding 23.8 million tonnes of annual oil refining capacity to its portfolio that made it the third-largest refiner in the country after Indian Oil Corp (IOC) and Reliance Industries Ltd.
ONGC already is the majority owner of Mangalore Refinery and Petrochemicals Ltd, which has a 15-million tonnes refinery.
The idea is to prepare a strategy to strengthen the integration further so that business growth is well diversified and risk well distributed to tide over the volatility due to fluctuations in global crude oil prices, he said.
The company has already mapped the production profile from its deepwater project in the KG Basin.
Block KG-DWN-98/2 will help double ONGC's gas production by 2022.
The current gas production stands at 23 billion cubic meters, which is expected to reach nearly 42 BCM by 2022. Oil production is also set to increase from the present level of 22 million tonnes to 25.6 million tonnes by 2022.
Also, the acquisition of Gujarat State Petroleum Corp's (GSPC) Deen Dayal West (DDW) block in KG basin has given ONGC ready infrastructure and facilities to produce from its high-pressure, high-temperature (HP-HT) fields.
This will also help in early monetization of other fields in the vicinity, which are a part of HP-HT Corridor, Shanker said. "Rig has already been deployed in Deen Dayal West (DDW) field for drilling and hydro-fracturing in order to boost production from this field".
ONGC Group recorded a net profit of Rs 22,106 crore on a turnover of Rs 204,019 crore in 2017-18 fiscal year.
The business strategy being finalised would also focus on opening up of new basins to replenish reserves and increase its production, he said.
The company already operates in six out of seven discovered basins in the country.
The oil production is also planned to be ramped up with various ongoing projects worth Rs 77,000 crore out of which Rs 10,000 crore is being invested towards redevelopment and enhanced oil recovery (EOR) projects only.