ONGC gains on buzz of green nod for onshore exploration in Assam

State-run ONGC has reportedly received environment clearance (EC) for carrying out onshore exploration, development and production of oil and gas in 100 locations in non-forest area of Assam, that would entail an investment of Rs 3,500 crore.

The scrip rose 0.23% to trade at Rs 128.35. It has traded in the range of Rs 128.15 and Rs 129.80 so far during the day.

According to the media reports, the Union Environment Ministry has given green clearance to ONGC after taking into account the recommendations of a green panel.

The environment clearance (EC) is however subject to obtaining prior permission from the wildlife angle, including clearance from the Standing Committee of the National Board of Wildlife, reports added.

Reports added that ONGC proposes to carry out drilling in 100 locations to evaluate the hydrocarbon potential of 21 different onshore Petroleum Mining Lease (PML) blocks in a non-forest area covering 944.39 km in Assam and Assam Arakan Basin covering whole of the Upper Assam North in Sivasagar district. After establishing the potential, the company will put the field under development and production. The project cost is estimated to be Rs 3,500 crore.

The scrip has witnessed significant amount of volatility since the first week of November. The stock has corrected by 15.43% from its close of Rs 147.40 recorded on 4 November 2019 to end at 124.65 on 23 December 2019. Since then, the stock has recovered 2.96% to currently trade at Rs 128.35.

On the RSI front, the stock's RSI (relative strength index) stood at 49.433. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The corporation reported 36.2% fall in consolidated net profit to Rs 5,275.51 crore on 10.5% fall in net sales to Rs 1,01,554.26 crore in Q2 September 2019 over in Q2 September 2018.

ONGC is the largest oil and gas exploration and production company in India in terms of production and reserves of oil and gas for the 2019 fiscal year according to the Ministry of Petroleum and Natural Gas.

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