Rs 1 Lakh Crore Plan: Maharatna PSU plans major deepwater push, Rs 30,000 crore capex—Key takeaways
Maharatna central public sector enterprise (CPSE) Oil and Natural Gas Corporation (ONGC) plans to invest Rs 1 lakh crore to explore local deepwater and ultradeep water fields over the next five years, Chairman AK Singh said on Monday. Addressing shareholders at the company's 33rd AGM, Singh outlined an aggressive expansion strategy to arrest declining production and expand the PSU energy giant's gas portfolio.
As part of its offshore push, the Maharatna CPSE will drill 87 deepwater and ultradeep water wells by March 2031, leveraging newly available technologies to tap into India's vast reserves, according to the company.
Highlighting the need for major discoveries to counter output drop from mature fields, Singh noted that India possesses vast untapped reserves in deepwater blocks that are now commercially and technologically viable to exploit.
Here are the key takeaways from the ONGC AGM:
Rs 30,000+ crore annual capex and production outlook
ONGC has earmarked a capital expenditure plan of over Rs 30,000 crore for the current financial year.
Its output for the current year is expected to remain flat at last year's level,s but production is projected to see a turnaround and rise starting next fiscal year.
The chairman said that production from the flagship KG Basin block has stabilised and is no longer declining.
ONGC's 33rd AGM: Dedicated trading subsidiary in the works
ONGC is in advanced stages of setting up a standalone trading company, with nearly 95 per cent of the groundwork completed.
The entity is expected to be launched by the end of this calendar year, subject to necessary regulatory approvals.
While the partner for the venture partner has yet to be finalised, the trading unit's headquarters will be set up in either Dubai or Singapore, said Singh.
Focus on gas revenue and international projects.
The energy major is shifting its strategic focus to expand its gas portfolio to drive higher gas-based revenues.
On the international front, gas production from its key Mozambique project is slated to commence by 2028.
Impact of GST and cost pressures
Despite implementing internal cost-cutting measures, the company noted that the overall financial benefit was largely offset by higher Goods and Services Tax (GST) outflows.
ONGC shares
On Friday, the ONGC stock declined 0.1 per cent to close at Rs 232 apiece on BSE in a Mumbai market where benchmark indices fell 0.4 per cent amid selling pressure in FMCG and metal stocks.
At this level, the PSU stock has declined 2.1 per cent so far this year, while the Nifty 50 and Nifty Energy indices have fallen 7.9 per cent and risen 7.4 per cent, respectively.
ONGC vs market returns (%)
| Stock / Index | 1 month | Year to date (YTD) | 1 year | 5 years |
| ONGC | -3.9 | -2.1 | -2.4 | 89.3 |
| Nifty 50 | -1.2 | -7.9 | -2.2 | 39 |
| Nifty Energy | -2 | 7.4 | 12.8 | 87 |
The largecap stock -- part of the Nifty 50, Nifty Energy and Nifty Oil & Gas gauges -- has risen more than 89 per cent in five years, outperforming the Nifty 50's 39 per cent rise and in line with the Nifty Energy's 87 per cent rally.
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