Exploration major maps out plans in petrochemicals

Tuesday, 30 September 2003, 07:00 Hrs
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NEW DELHI: India's state-owned exploration major Oil and Natural Gas Corporation (ONGC) is looking at venturing into petrochemicals, adding another dimension to its activities encompassing refining and marketing.

"Fifteen years after commissioning the gas processing plant in Hazira, Gujarat, we are taking up another gas processing plant to extract C2-C3 (olefins) from liquefied natural gas (LNG), to be imported by Petronet LNG Ltd at Dahej," said Subir Raha, during a media interaction here Monday following the annual general meeting.

"Plans have been drawn up to create incremental value from productions at Uran, Hazira, Mangalore Refinery and Petrochemicals Ltd (MRPL) and Dahej for production of petrochemicals," said Raha.

ONGC has doubled its profit in two years to cross the 100 billion net profit mark for 2002-03 to achieve 105.29 billion net profits, a rise of 70 percent mainly owning to the lifting of government curbs on price.

The company has announced a total dividend of 42.77 billion, including the interim dividend paid to the federal government.

The total contribution of ONGC to the federal kitty during 2002-03 was 163.16 billion, up 79 percent from 91.31 billion. The payment includes royalty, cess, duties and taxes.

Accounting for over 80 percent of oil production in the country, ONGC produced 27.57 million tonnes crude last year, while the gas production was 26 billion cubic metres (BCM) against 25.42 BCM in the previous year.

"We are now planning to push ahead with plans for vertical integration and going into petrochemicals. The detailed initial feasibility study is under way and we propose an investment of 5.6 billion," said Raha, declining to specify the products.

He, however, added that the company has sufficient feedstock to look at production of a whole gamut of petrochemicals.

As part of the plans for expansion, ONGC is going to partner in the Gujarat government's plan for a special economic zone in Dahej.

Pushing forward its plans to set up retail outlets for marketing transport fuel, ONGC has entered into a tie-up with refining and marketing major Bharat Petroleum Corporation Ltd (BPCL) supply of products across the country.

"The agreement with BPCL is for sustained and incremental product access for our product retailing plans. It will help us to make the petroleum products accessible throughout the country. We are also in talks with Indian Oil Corporation (IndianOil) and Hindustan Petroleum Corporation Ltd (HPCL) and hope to reach an agreement soon," said Raha.

On exploration front, Raha revealed that ONGC has entered into a cooperation agreement with British energy major Cairn Energy for joint exploration both in India and overseas. Under this tie-up, ONGC would be joining Cairn in its deep-sea block in Krishna-Godavari and shallow water block in Cambay Gulf area.

In turn, Cairn will join ONGC in two blocks in Ganga Valley and Cambay Basin.

After over a decade, ONGC is planning to restart exploration in Nagaland and is targeting increasing its exploration and production through farming out 16 marginal or isolated fields where no work was being done for some time.

With stepped up exploration activities, including in deepwaters, ONGC is hopeful of raising its production from an average 26 million tonnes at present to 40 million tonnes by 2020, to meet India's increasing demand.

India currently relies on imports for 70 percent of the requirement.

Source: IANS
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