ONGC plans to invest 1 lakh crore to establish two petrochemical units
ONGC, the government-owned upstream oil company, is exploring new avenues for growth and diversification by investing INR 1 lakh crore in the manufacturing of petrochemicals. This strategic move will enable the company to enhance its value chain and expand beyond crude oil production. As per senior executives, this investment is expected to yield significant returns and establish ONGC as a prominent player in the petrochemical industry.
ONGC Director, Finance, Pomila Jaspal, said the company is looking to build separate oil-to-chemical (O2C) projects. ONGC's Executive Director and Chief of Joint Ventures and Business Development, D. Adhikari, said: "Our plan is to raise petrochemical capacity to 8.5-9 million tonnes by 2030".
The demand for petrochemicals is expected to remain strong due to their versatility and wide range of uses in various industries such as construction, automobiles, and electronics. Petrochemicals are used to make plastics, fertilizers, and pharmaceuticals, among others. By focusing on its chemicals business, ONGC can improve its profitability as it moves towards higher value products..
ONGC already has two subsidiaries Mangalore Refinery and Petrochemicals Ltd (MRPL) and ONGC Petro-Additions Ltd (OPaL) that run petrochemical units at Mangaluru in Karnataka and Dahej in Gujarat, respectively. While MRPL is a profit-making entity, OPaL has a "distorted" capital structure, Adhikari said. To correct this, the ONGC board has approved infusing Rs 18,355 crore capital in OPaL to raise its stake in the firm to over 96 percent from 49.35 percent at present, Adhikari added.
