New Delhi: India’s biggest explorer, Oil and Natural Gas Corp. Ltd (ONGC), will boost spending to increase output at its biggest field and pay a mid-year dividend of Rs18 a share.
The New Delhi-based company will spend an additional Rs2,550 crore on increasing production at its Mumbai High area off India’s west coast, ONGC said in an emailed statement.
The explorer’s board also approved the dividend payment amounting to Rs3,850 crore.
ONGC, which in October approved a $1.4 billion (Rs5,544 crore) investment on the acreage, needs to increase output to retain its position as the largest supplier of crude oil and gas in India.
Oil imports by India, Asia’s third biggest oil consumer after China and Japan, are set to rise as refiners expand capacity to meet demand. India imports three-fourths of its oil requirement.
The Mumbai High region yields about 16 million tonnes (mt) of crude oil annually, or 320,000 barrels a day, which is more than 60% of the company’s total output.
The explorer is investing in upgrading platforms and digging deeper wells and plans to replace pipelines as output from the ageing, nearly three-decade old, area declines.
ONGC’s spending, approved on Saturday, will go towards replacing a network of pipelines, the company said. The money will be spent over three years.
The board also approved spending Rs150 crore on the PY-3 field in the Cauvery basin, off the east coast. ONGC holds a 40% stake in the area, and Hindustan Oil Exploration Co. and Tata Petrodyne Ltd hold 21% each.
ONGC plans to raise spending on developing new and existing fields by 20% in the year that began on 1 April to Rs18,000 crore from Rs15,000 crore the previous year, chairman R.S. Sharma had said on 16 April.