New Delhi: The Centre has approved Oil and Natural Gas Corporation's (ONGC) proposal to raise stake in its petrochemicals subsidiary, ONGC Petro-additions Limited (OPaL), from 49.36 percent to 95.69 percent, said ONGC in a statement on Friday. The additional stake acquisition will entail an investment of Rs 18,365 crore by ONGC. The oil and gas major said that the move will pave the way for capital restructuring, leading to better operational and financial stability in OPaL.
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"The Government of India has approved the ONGC proposal for additional investment totaling Rs.18,365 Crores resulting in an increase in ONGC’s stake in ONGC Petro-additions Limited (OPaL) from 49.36 percent to 95.69 percent. This significant move paves the way for capital restructuring leading to the operational and financial sustainability of OPaL," said the statement.
"The Government’s approval to increase ONGC’s equity stake in OPaL shall help in rectifying OPaL’s capital structure with a healthy Debt Equity ratio. With this infusion, ONGC’s cumulative investment in OPaL will stand to Rs 22,728 crores," said ONGC.
The government approval also assures a sustained supply of gaseous feed to OPaL by ONGC from its new nomination fields at a premium of up to 20 percent over APM gas price, said ONGC. "The decision aligns with ONGC’s strategic vision to become an integrated global energy major by increasing its presence across the downstream and petrochemical value chain as well," ONGC added.
OPaL, situated at Dahej in Gujarat, is a petrochemical complex having the largest standalone dual feed cracker in Southeast Asia. Commissioned in 2017, OPaL is a state-of-art petrochemical complex with the capacity to produce 1.5 MMTPA of polymers and 0.5 MMTPA of chemicals. With 12 percent market share, OPaL has a good presence in India’s polymer segment.
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