ONGC to invest Rs 122,000 cr in the 11th Plan period

MUMBAI: State-owned oil and gas major ONGC on Wednesday said it plans to invest Rs 1,22,000 crore in expansion programmes during the current five-year plan period, including Rs 20,000 crore in the east coast of the country.

"We have plans to invest Rs 76,000 crore domestically and Rs 46,000 crore overseas during the current five-year plan period ending 2012," ONGC Chairman and Managing Director R S Sharma told reporters here.

He said domestic investments would be made through internal accruals of the company, which made Rs 15,600 crore cash profit last year. The company earns a cash profit of Rs 2,000 crore per month.

"Domestic investments will go into surveying, development, drilling and revamping of existing blocks," he said, adding that ONGC would make investmnets in MRPL for expansion.

On investments off the east coast, he said ONGC would invest Rs 20,000 crore, including operating expenditure, by 2011-12.

"The basin off the east coast has expected reserves of more than six trillion cubic feet of gas. It is also likely to produce 8,000 barrels of oil per day. This, however, excludes deep-water production," Sharma said.

ONGC has three adjoining oil fields off the east coast of the country. It owns 90 per cent of the assets while the remaining is owned by Cairn India.

ONGC has plans to dilute a maximum of 50 per cent stake in these blocks, which will start production from 2011-12. ONGC has completed five offshore projects valued at USD one billion in the current fiscal. It has 13 projects under execution and 11 projects were completed by April this year.

Sharma said ONGC has six projects under tendering, which are valued in excess of Rs 8,000 crore and 11 projects under conceptualisation by FY'12.

"We envisage additional 46 MMT of oil and 55 BCM of gas production over a period of 15-25 years," Sharma said. To a question, Sharma said the production in ONGC was better in the face of global slowdown in crude production.

"Production decline is a global phenomenon now. Except for OPEC, all OECD countries are experiencing decline in oil production. But, we have managed to arrest decline through better management," Sharma said.

Citing the example of Bombay High, he said investment in redevelopment is yielding results. "Bombay High is producing 250,000 barrels per day. If we had not invested for redevelopment, it could go down to 160-170,000 barrels per day," he said.

In the current fiscal, ONGC would invest Rs 16,000 crore, he said adding capex for the next year has been earmarked at Rs 19,000 crore.