ONGC says it expects oil production to rise 11%, gas to be up 25% by FY25

• The rise in production is expected after new discoveries in the western and eastern start producing
• ONGC is betting on discoveries in KG-DWN-98/2 in the Bay of Bengal to account for most of the increase in production

New Delhi: State-run Oil & Natural Gas Corporation (ONGC) is optimistic about reversing the decline in production that it has been witnessing over the past few years and has said that it expects its crude oil production to rise by 11 percent and natural gas output to go up by 25 percent by FY25, an investor presentation shared by ONGC after the FY22 earnings showed. The rise in production is expected after new discoveries in the western and eastern start producing. ONGC informed investors that it expects its crude oil production to rise from 19.545 Million Tonnes (MT) in FY2021-22 to 19.88 MT this financial year and 21.588 MT in the next financial year. It expects output to rise to 21.701 MT in FY2024-25.

Similarly, ONGC expects gas production to rise from 20.907 billion cubic meters (BCM) in 2021-22 to 21.097 BCM in the current financial year and 24.387 BCM in FY2023-24. In FY26, the output will reach 26.124 BCM.

ONGC relying on discoveries in KG Basin to bump up production

ONGC is betting on discoveries in KG-DWN-98/2 in the Bay of Bengal to account for most of the increase in production, while the Cluster-8 marginal fields in the western offshore will supplement the production. ONGC said it is also implementing the fourth phase of the redevelopment of the Mumbai High oil and gas fields, which will increase the recovery factor from the five-decade-old mature fields.

India's dependence on imports to meet its crude oil needs has, in recent years, risen to 85 percent as output from domestic fields continued to decline.

Oil behemoth to intensify E&P activities

ONGC, the oil behemoth that is responsible for the lion's share of India's crude oil and natural gas production, has seen a steady decline in production from its mature and ageing fields over the years. In a recent statement, ONGC had said that it is planning to intensify its exploration activities and will spend Rs 31,000 crore from 2022 to 2025 on exploration campaigns throughout the country.

The oil major has said that it will also seek global oil majors and leverage their expertise for assessment of India's sedimentary basins for future exploration and exploitation plan. ONGC's internal program has three components; re-exploration of Mature Basins, consolidation of Emerging Basins and probing of Emerging and New Basins. Under this internal program, ONGC is trying to probe around 1,700 Million tonne of oil and oil equivalent gas (MMTOE) of Yet-To-Find (YTF) reserves during FY 2022-25. This part of ONGC's Vision 2040 which aims to raise domestic production from 50 million tonnes of crude oil and oil equivalent gas to 70 MMtoe (Million Metric tonne of oil equivalent) by 2040, the presentation said.

ONGC's overseas output is seen rising from 15 MMtoe to 40 MMtoe.

With 35 Million Tonnes Per Annum (MTPA) of oil refining capacity vested in two subsidiaries — HPCL and MRPL — ONGC is targeting to raise this capacity to around 100 Million Tonnes (MT) by 2040. Also, expansion in petrochemicals will be prioritised. ONGC is also looking to scale up its renewable energy portfolio to 10 GW from less than 200 MW currently, it told investors.

Also, the firm has set up a USD 1 billion venture fund corpus for the incubation of new technologies that will aid in raising the output and finding newer resources, the presentation said.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)