ONGC, IOC and other Indian oil Public Sector Undertakings (PSUs) have plans to invest the hefty amount in FY21 with an aim to meet India’s energy requirements. The Indian oil majors intend to explore for oil and gas, refineries, petrochemicals and laying pipelines to meet this demand.
New Delhi/India – Indian major oil and gas firms Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) and other oil PSUs will invest over 14.10 billion dollars in the coming fiscal starting April 1, 2020. This will involve exploring in oil and gas, refineries, petrochemicals and laying pipelines to meet the needs of the world's fastest-growing energy consuming nation – India.
ONGC leads the pack with a 19 per cent rise in its capital spending at 4.65 billion dollars. The company is investing in finding new reserves of oil and gas and bringing to production discoveries it has already made. It is developing discoveries on both east and west coast of India. The top Indian oil producer's overseas arm, ONGC Videsh Ltd (OVL) will invest almost 10 per cent more at 1.04 billion dollars in oil and gas operations abroad.
IOC, India’s top oil refiner, will see a 17.4 per cent rise in spending to 3.75 billion dollars with the bulk of it in expansion and upgrade of its seven refineries that produce fuel. IOC will also see investment in petrochemical business almost double to 484.69 million dollars while its exploration spends quadruples to 307.63 million dollars.
Privatisation-bound Bharat Petroleum Corp Ltd (BPCL) has proposed a 14 per cent higher capital spending at 1.29 billion dollars, two-third of which will be in its core refining business.
Gas utility Gail India will not see any major increase in its investments at 774.36 million dollars as most of its pipeline grid expansion projects are nearing completion.
Hindustan Petroleum Corp Ltd (HPCL), a subsidiary of ONGC, will invest 1.65 billion dollars in FY21, the same as the previous year.
Oil India, the nation's second-largest oil producer, will invest 554.73 million dollars next year as compared to 525.83 million dollars in the current fiscal.
In India’s recently announced budget, Finance Minister Nirmala Sitharaman laid down plans for expansion of national natural gas pipeline network to 27,000 km from the present 16,200 km and pricing reforms as the government looks at boosting the use of environment-friendly fuel.
The government has set a target of raising the share of natural gas in its primary energy basket to 15 per cent by 2030 from current 6.2 per cent. Connecting gas sources to consumption hubs is key to achieving this.
Presently, most of the gas pipelines are concentrated in the western and northern part of the country with a few lines in the east and south.
"To deepen gas markets in India, further reforms will be undertaken to facilitate transparent price discovery and ease of transactions," she had said.
Presently, the price of natural gas produced domestically is fixed by a formula that averages out rates in gas surplus nations such as Russia and the US.
"Further, it is proposed to expand the national gas grid from the present 16,200 km to 27,000 km," she said without giving a timeline.