ONGC investing Rs 22,500 crore in redevelopment projects

Company made 16 discoveries on new sources of output in 2014-15, says CMD

Oil and Natural Gas Corporation (ONGC) is in the process of investing Rs 22,500 crore in redevelopment projects, to add capacity of 16.7 million tonnes of oil and 56 billion cubic metres of gas, Chairman and Managing Director D K Sarraf said on Monday.

"(In 2014) we launched Mumbai High North Redevelopment Phase-III, Mumbai High South Redevelopment Phase-III, integrated development of the Bassein, Mukta and Panna formations and Daman development," he said at a Republic Day function at ONGC's headquarters here.

The first gas output from the KG-DWN-98/2 (NDA) field in the eastern offshore is anticipated by 2017-18 and the first oil output by 2019. "These are very important projects for us and a lot of hope rides on their success. They will also serve as a litmus test for our project management skill to implement the projects without time and cost over-run and safely," he said.

Offshore output, he said, had risen very significantly. "Although this has, to an extent, masked the worrying trend of decline in our onshore portfolio, we must spare no effort to reverse this," he added.

In 2014-15, he said, 16 discoveries were made on new sources of output, surpassing last year's total of 14. "Therefore, the reserve replacement ratio is again expected to be in excess of one for a 10th consecutive year."

ONGC Videsh, the foreign arm, clinched deals for a gas field in Azerbaijan, a 16 per cent stake in the Rovuma offshore Area-I discovery in Mozambique and raised its stake in a deep-water offshore field in Brazil. Its production rose 15 per cent and the profit after tax would be the highest ever, at Rs 4,445 crore.

ONGC Videsh has, in recent times, won an exploratory block in New Zealand, signed production-sharing contracts for two on-land exploration blocks in Myanmar and another for two shallow-water exploration blocks in the Bay of Bengal of Bangladesh (in a 50:50 partnership with Oil India Ltd). Its business presence is spread over 36 projects in 17 countries.

On Mangalore Refinery and Petrochemicals, a subsidiary, Sarraf said the refinery achieved its highest ever throughput of 14.59 million tonnes. It had commissioned all the units under its Phase-II expansion, save one of polypropylene, to be done soon.

Sarraf said ONGC's gross earnings in 2013-14 were the highest ever at Rs 84,201. Profit after tax was Rs 22,095 crore, five per cent higher than in 2012-13, despite the highest-ever subsidy outgo.