ONGC to invest ₹31,000 cr to intensify exploration in next 3 yrs

State-owned oil and gas explorer ONGC Ltd. will invest ₹31,000 crore in the next three financial years to intensify its exploration activities and leverage its international collaborations with global majors. The amount set aside for exploration is around 150% more than expenditure worth ₹20,670 crore incurred during the past three fiscal years (FY19-22).

The exploration intensification includes activities funded through ONGC’s internal programme as well as funded and facilitated by the government, a company statement says.

"Under a government-funded programme for the appraisal of unapprised offshore areas till Exclusive Economic Zone (EEZ), 70,000 line kilometres (LKM) of state-of-the-art 2D broadband seismic data acquisition, processing and interpretation (API) will be done in three sectors namely West Coast of India, East Coast of India and Andaman offshore," says the statement.

The company plans to complete the technical bid opening (TBO) for seismic data acquisition by June 2022.

In the Andaman basin, ONGC has two blocks for exploration under the Open Acreage Licencing Policy (OALP). The company has also acquired seismic data in some sectors within ‘No-Go’ areas and few prospects have already been identified.

ONGC plans to drill six wells in the next three years -- two under ONGC committed work programme and four through government funding. Reputed "global companies or consultants are being invited for the assessment of the basin for future exploration and exploitation plan," says the company.

It says the internal programme has three components -- re-exploration of mature basins, consolidation of emerging basins and probing of emerging and new basins. Under this plan, ONGC will probe around 1,700 million tonnes of oil and oil equivalent gas of yet-to-find (YTF) reserves during FY 2022-25. The activities include a state-of-the-art 2D and 3D seismic surveys, followed by drilling of around 115-120 wells with an estimated outlay of Rs 10,000 crore every year for the next three years.

The Centre's facilitation has resulted in the release of 96,000 sq. km area so far, earlier demarcated as ‘No Go’ zone, says the company, adding that this will help it achieve its acreage acquisition programme to bring 5 lakh sq. km under active exploration by 2025.

As part of its international collaboration, ONGC on April 26 signed a Memorandum of Understanding (MoU) with the Norwegian state-owned multinational energy major Equinor ASA. The MoU, valid for the next two years, will allow partnership in areas of upstream exploration and production, midstream, downstream and clean energy options, including carbon capture utilisation and sequestration. Equinor is the leading operator on the Norwegian continental shelf, and is present in 30 countries worldwide.

The company board will also meet on May 28 to consider and approve the standalone and consolidated financial results for the Jan-March quarter and the year ended on March 31, 2022. During the meeting, the company will also consider the final dividend, if any, for the financial year 2021-22.

During the previous quarter of 2021-22, ONGC had posted a net profit of ₹8,764 crore, up 596.7% from Q3 FY’21. The company's gross revenue was ₹28,474 crore in Q3 FY22, up by 67.3% YoY. On a consolidated basis, the profit rose 220% to ₹11,637 crore, while its revenue grew 45.3% YoY to ₹1.45 lakh crore.

The ONGC stock is trading 4.08% or 6.2 points down at ₹145.70 on the NSE today. The stock has risen 1.64% in the year-to-date period, and 0.90% in the six-month period.