Ongc May Shelve Rs 2,000 Crore Paraxylene Project

ONGC is taking a re-look at its proposed Rs 2000 crore plus paraxylene project. This follows the sharp drop in international prices of paraxylene as a result of which the projects viability is under a cloud.

ONGC director (exploration) T K N Gopalaswamy told Business Standard here that given the organisations reorientation as a corporate entity, such large investments would have to be well justified. The project, which envisaged setting up of a grassroot paraxylene plant at Hazira had been submitted to the government for first stage approval, after which a detailed feasibility report would have been prepared. Much significance has been attached to the project as it was the the first major initiative of ONGC to diversify its activities in the downstream petroleum sector.

 

Gopalaswamy, who was here to take part in the second conference and exposition on petroleum geophysics organised by the Society of Petroleum Geophysicists, said ONGC would first put up a Rs 30-crore mini-refinery at Tatipaka near Rajamudhry in Andhra Pradesh. To be funded from internal accruals, the refinery would have a refining capacity of 15,000 barrels a day.

ONGC was also talking to a number independent power producers (IPPs) to set up power generation joint ventures, based on hydrocarbon fuels, Gopalaswamy said. The navaratna public sector corporation is also strengthening its exploration and production activity.

As opposed to its present strategy of extensive exploration, ONGC would now seek to collect more reliable seismic data on oil availability and utilise the existing wells more efficiently, he said. We will be drilling fewer wells during the Ninth Plan period. However, we will be making higher investments in employing the state-of-the-art three-dimensional data technology to collect more details about new and existing reserves, he said.

Upgrading the data acquisition process is now a top priority for ONGC, he said. Already, the company is upgrading its data on Bombay High at a cost of $42 million. In phases, this process would be extended to onshore fields.

Gopalaswamy said ONGC was also in talks with multinationals to forge a joint venture to develop the deep sea project off the Kerala-Konkan coast. Deep sea exploration and the north-east are the thrust areas of ONGC in its search for new fields.

ONGC is also in the process of acquiring acreages in Kazhkistan, Turkmenistan, and Iraq. This was being done mainly to bridge the demand-supply gap in hydrocarbons.

Demand is expected to touch 165 million tonnes by the year 2009-2010 while production at present is around 35 million tonnes.