ONGC sees 20-30% lower capex next fiscal on crude price slump

ONGC will maintain its capex plan for this year at the same level as last year at about Rs 30,000 crore, its CMD Dinesh K Sarraf has said. However, the company sees reduction in the same next fiscal year, to the tune of 20-30 per cent. “This projected reduction in the capex for the next fiscal has nothing to do with a reduction in our work but with the projected decline in service charges given the depressed price situations. 

“So, we see 20-30 per cent decline in our capex next fiscal year. For the current fiscal it will be same as last year when we invested around Rs 30,000 crore,” Sarraf told reporters on the sidelines of an industry event here. Sarraf also called for higher gas price to make KG block Cluster-2 viable.

 

“We want the government to allow us to charge more for our output from the Cluster II of the KG blocks to make investments economically viable,” the chairman of the country’s largest oil and gas producer said. He added that the company is trying to reduce the development cost of the KG block cluster-2 by deploying better technologies. 

Asked about the projected output from these KG blocks he said it is seen at 75,000 bpd oil, 17 mscmd of gas. On whether the company has abandoned the cluster 1 at the KG Blocks, he did not offer a direct answer but said further development depends on the resolutions of issues with Reliance Industries.