PSU oilcos pump up production plans

NEW DELHI: Energy security is India’s top priority. The government plans to spend about Rs 2,70,000 crore in oil and gas sector during the Eleventh Plan (2007-12), a 160% jump from the Tenth Plan’s outlay of Rs 1,04,000 crore.

The prime focus of the public sector oil companies is on exploration and production (E&P) of hydrocarbon, besides acquiring more oil and gas assets abroad. Public sector E&P major ONGC is planning to enhance its outlay for 2007-12 by over 151%.

The company’s proposed outlay in 2007-12 is about Rs 83,000 crore, a significant jump from Rs 33,000 crore in the Tenth Plan, official sources said. Other PSU, Oil India’s (OIL) outlay is expected to go up from Rs 5,000 crore in the Tenth Plan to Rs 10,000 crore in the Eleventh Plan. OIL has been mandated to seek newer areas for intensifying exploration efforts.

Enhanced E&P activities for ONGC is visible from the very first year of the Plan. It has set a crude production target of 29 million tonne (mt) in 2007-08, about 6% higher than 27-mt figure in the previous fiscal, an official of the company said. The company has committed for natural gas production of 25 billion cubic metres (BCM), 14% higher than 22 BCM in 2006-07.

Besides enhancing domestic E&P activities, the government is keen on acquiring hydrocarbon assets abroad for equity oil and equity gas. ONGC’s foreign arm ONGC Videsh (OVL) is likely to get an outlay of about Rs 60,000 crore to acquire various oil and gas assets in the Eleventh Plan. The amount is significant compared to Rs 14,000 crore allotted in the Tenth Plan, more than a four-fold rise.

Enhanced E&P activities in the Eleventh Plan is visible from the very first year. ONGC has set a crude production target of 29 mt in 2007-08, about 6% higher than 27-mt figure in the previous fiscal. The company has committed for natural gas production of 25 billion cubic metres (BCM), 14% higher than 22 BCM in 2006-07.

On the downstream side, the government would focus on “upgrading, modernising and expanding refineries”. An official said that upgradation of existing refineries are a must since future availability of crude would have high sulphur content. The country must have the capacity to process heavy and cheaper crude.

Indian Oil Corporation (IOC) has committed for five major projects in the first year of the Plan period. It plans to enhance Panipat refinery capacity from 12 to 15 million metric tonne per annum (MMTPA) and set up a Naphtha cracker at the refinery. Its plan for the year include augmentation of Mundra-Panipat crude oil pipeline to 9 MMTPA, laying Jalandhar LPG pipeline and setting up a hydrocracker project at the Haldia refinery.