ONGC foresees increased oil & gas output, launches strategic initiatives for global partnerships: OVL

Quitol (Goa): The State-owned oil and gas exploration company Oil and Natural Gas Corporation (ONGC) anticipates increased production in the current fiscal 2024-25 compared to the previous year.

In an exclusive interview with the Millennium Post, Rajarshi Gupta, the Managing Director of ONGC Videsh Limited (OVL), acknowledged the decline in production in the past.

Furthermore, he asserted that the company has initiated deepwater production from the KG-DWN-98/2 Block in the Bay of Bengal. The anticipated production is set to reach 45,000 barrels of oil per day and over 10 MMSCMD of gas.

He said that across all ONGC projects, various measures and technologies are implemented to counteract mature field decline, aligning with global practices. The objective is to enhance production wherever feasible, indicating that ONGC’s production is expected to accelerate starting from this year. “The production is expected to go up to 45,000 barrel of oil per day and over 10 MMSCMD of gas,” Gupta added.

This initiative is poised to bolster ONGC’s overall oil and gas production by 11 per cent and 15 per cent respectively. Following the completion of Phase-1 and 2, the project is now progressing into its final phase, with the remaining oil and gas fields of the block scheduled to commence production by mid-2024.

The OVL chief highlighted, “OVL holds the position of being the second-largest Exploration and Production (E&P) company in India, trailing ONGC. While ONGC’s production stands at approximately 40-45 million tonnes of oil and gas, OVL contributes around 11 million tonnes of oil and gas.”

He further added, “Our annual spending is approximately Rs 8,000 crore, a notable contrast to ONGC’s annual capital expenditure ranging from Rs 30,000-35,000 crore. Additionally, we have plans to achieve a net zero target of Rs 2 lakh crore over the years.”

Conversely, he emphasized that Venezuela has agreed to provide oil to ONGC Videsh, aiding in the recovery of its outstanding $600 million dividend for a stake in a project within the South American nation. In response to queries, Gupta stated, “The removal of sanctions is a favorable development. We are currently engaged in advanced discussions with the Venezuelan government to secure additional cargos and settle our dividends.”

OVL, the international investment subsidiary of Oil and Natural Gas Corporation, possesses a 40 per cent stake in the San Cristobal field situated in the Orinoco Heavy Oil belt of eastern Venezuela. The remaining stake is held by Venezuela’s state oil company, PDVSA.

The OVL Managing Director stated that the two projects require further investment for increased production, and the costs are yet to be finalised. Gupta emphasised, “Increased investment will result in higher production.” Simultaneously, a senior official clarified that ONGC does not need funds, being a ‘zero debt’ company with only 0.3 per cent debt and sufficient cash for investment. Gupta also highlighted ONGC’s plan to invest Rs 11,000 crore in domestic exploration.

“Our footprint extends to 18 countries, complemented by three business centers. There exists the potential for both expansion and consolidation within our existing locations,’’ he said. Strengthening this assertion, Gupta guaranteed that, given the current governance, India possesses the ability to enter discussions with any nation worldwide, paving the way for dialogues on potential partnerships in oil production.