New Delhi: Indian state-run explorer Oil and Natural Gas Corp expects capital expenditure of Rs31,000 crore ($5.9 billion) in the financial year starting April 2012, its chairman and managing director said on Wednesday.
Most of the expenditure will be funded through internal accruals, Sudhir Vasudeva told reporters on the sidelines of an energy conference.
ONGC, which has been investing heavily to maintain output from its old fields, has said it aims to raise its crude oil production by 15% to 28 million tonnes, or 560,000 barrels per day (bpd), by March 2014.
The company expects capital expenditure of Rs28,000 crore in the current fiscal year ending March.
ONGC produces about 63% of India’s oil output. The bulk of ONGC’s oil and gas output comes from old fields that were witnessing an annual decline of 7-8% until a few years ago, after which it began implementing techniques to improve oil and gas recovery.
The state-run explorer plans to buy out a 10% stake held by Cairn India in its KG-DWN-98/2 oil and gas block off India’s east coast, Vasudeva said.
“Our board has approved it,” he told reporters.
ONGC, which owns the balance 90% stake and is the block’s operator, will pay about $47 million for Cairn’s stake, estimated on cost-basis.
The company had said in June it was in talks with Italian oil major Eni and BG Group for the sale of up to 30% in the gas-rich block, which is situated close to Reliance Industries’ main D6 block in the Krishna Godavari basin.
ONGC had earlier estimated the deepwater block to potentially produce a total of at least 87 billion cubic metres of gas.