Oil output to go up after 10 years of flat growth: ONGC

Oil output to go up after 10 years of flat growth: ONGC

Bangalore: ONGC’s oil output is expected to go up significantly in the current fiscal on the back of higher reserves accretion after witnessing flat production growth over the past decade, chairman and managing director R. S. Sharma said on Thursday.

“Our oil production, after a ten-year flat growth, is projected to increase by about three million tonnes (annually) in the next 2-3 years and gas production from 62 million cubic metres per day is expected to cross 100 million cubic metres per day in the next 5-6 years," he said.

He said ONGC’s production has been flat at approximately 25 million tonnes of oil per annum in the last 10-year, while gas production amounted to 62 million standard cubic metres of gas per day on average, based on the discoveries made by the oil and gas explorer.

However, last year, reserve accretion was the highest in the last 20-year.He noted that in the industry that ONGC operates, it takes five-seven years for discoveries to translate into oil and gas production.

Sharma said ONGC’s follow-on public offer is slated for the January-March quarter, when a 5 per cent stake would be divested. When ten per cent was divested under the oil and gas exploration company’s initial public offer in 2004, the government was able to raise Rs10,500 crore.

The 5% divestment in early 2011 would fetch “much more than the 10% collection in 2004", Sharma said.

On reports that ONGC is mulling a stock split, he said the company is waiting for the green signal from the government.

“Once we hear (from the government), we will deliver," he said on the sidelines of a 3-day national quality summit organised by the CII here, which commenced today.

Mangalore SEZ on track

ONGC has acquired 2,300 acres of land for its Special Economic Zone (SEZ) in Mangalore, Sharma said, asserting that the project is definitely on track.

But acquisition of this much land is not sufficient to announce the SEZ as a multi-product one, he said.

Sharma sought to downplay opposition in some local quarters to the land acquisition, saying for a commercial organisation like ONGC,facing such issues is common.“This is one of the SEZs in the country that’s progressing extremely well",he said

“Investments (for the Mangalore SEZ) is very much on track. We have not stopped anywhere total funding plan. Everything is very much on track. It’s very much on stream",he said, adding, there is no question mark on the project.

Sharma said ONGC is fully conscious of the concerns on land acquisition but added that issues would be resolved through discussions leveraging the company’s “reputation and standing".