The Hindu Business Line : ONGC to step up crude output

STEPPING ON GAS: The ONGC Chairman and Managing Director, Mr Subir Raha, at the 12th annual general meeting of the company in the Capital on Wednesday. - Kamal Narang

New Delhi , Sept. 21

MR SUBIR RAHA, Chairman and Managing Director of Oil and Natural Gas Corporation (ONGC), on Wednesday rolled out ambitious targets for the company, including plans to boost current output of crude oil by 13 per cent to 30 million tonnes by 2009-10, from the current level of 27 million tonnes, and to set up three more refineries.

Soon after the 12th annual general meeting (AGM) of the company, Mr Raha said at a press conference that the company plans to put three new fields in western and eastern offshore on fast track development. The G-1 and GS-15 fields of the company would produce 1,223 million tonnes of oil per day and 2.62 million standard cubic meters per day of gas, he said.

In the western offshore, from January 2006, D-1 field would begin producing 1,305 million tonnes of oil per day. Further, the production in the D-33 fields is to begin from December 2006 and it would produce 341 million tonnes a day of oil and 0.5 million standard cubic meters per day of gas.

ONGC has also planned to invest Rs 3,300 crore over a period of three years to restore oil production to 3 million tonnes per annum from the Assam oilfields by 2009-10, Mr Raha said. The company has discovered 6 out of the 7 producing basins in India and is engaged in opening up 5 more basins in the regions of Bengal, Vindhyachal, Kutch, Himalayan foreland and Andaman-Nicobar.

Mr Raha said that ONGC added 49.40 million tonnes of oil and oil equivalent gas reserves in 2004-05 as against production of 49.45 million tonnes of oil and oil equivalent gas. ``The reserve accretion: production ratio was 1:1,'' he said. The company hopes to arrest the decline in natural gas production in the next 3-4 years when it brings to production its new finds in Krishna Godavari basin, off the Andhra coast.

On the decline in earnings due to discounts being offered to State-run refiners, Mr Raha said that the company was earning less on each barrel of oil compared to the fiscal first quarter. ``We're now earning $55 on each barrel,'' he said.

Refinery: The company plans to build a 15 million-tonne refinery at Mangalore. Apart from this, it also proposes to build a refinery each at Kakinada in Andhra Pradesh and Barmer in Rajasthan. The new refinery at Mangalore will take Mangalore Refinery and Petrochemicals Ltd's capacity to 30 million tonnes. The refineries at Kakinada and Barmer would be implemented through joint ventures with strategic partners, Mr Raha said. ONGC was also looking at acquiring stake in Southern Petrochemcials Industries Corporation (SPIC), he added.

The current capacity of the MRPL Mangalore Refinery is 9.69 million tonnes and consequent to expanding the capacity to 15 million tonnes, ONGC plans to set up another 15 million-tonnes refinery at Mangalore, the Chairman said. ONGC has also lined-up ambitious investments in the petrochemcial complex at Dahej in Gujarat and Mangalore in Karnataka, besides foraying into power generation. It plans to set up a 7.5 million-tonnes refinery at Barmer in Rajasthan in joint venture with Cairn Energy of UK and another 5 million- tonnes refinery at Kakinada in Andhra Pradesh.

``We may form subsidiaries or joint ventures for our downstream projects,'' he said, adding that to raise capital, the subsidiary companies may go for public floats in the form of initial public offers. Raising MRPL capacity to 15 million tonnes would require an investment of about Rs 3,000 crore, he said.

Talking about the time frame to set up these projects, Mr Raha said that while the Rajasthan refinery would take 36 to 40 months for construction, Kakinada refinery would come up in 48 months. ONGC also plans to double capacity of its 0.5 million-tonne per annum Tatipaka mini-refinery to 200,000 million tonnes per annum.

ONGC plans to produce India's first deep sea gas from the G1 and GS15 fields in Krishna Godavari Basin in Bay of Bengal from April 2006.The company has secured rights to market LPG, kerosene and Aviation Turbine Fuel. It is targeting to produce the country's first coal-bed methane gas in early 2007 and will also foray into underground coal gasification in 2009, he said.

Finances: The company has reported a 50 per cent jump in its net profit to Rs 12,983 crore in 2004-05 over a turnover of Rs 46,710 crore. It declared a dividend of 400 per cent (Rs 40 per share) including an interim dividend (announced last year) of 200 per cent for 2004-05 fiscal.

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