Centre okays ₹10,501 cr additional investment by ONGC in OPaL

New Delhi: The Centre has approved Oil & Natural Gas Corp. Ltd (ONGC) investing more in ONGC Petro-additions Ltd (OPaL). This includes an equity investment of ₹10,501 crore, which will increase ONGC's stake in its petrochemical subsidiary to 95.69%.

"The company has received a letter dated 09.08.2024 from ministry of petroleum & natural gas, Govt. of India(GoI), inter-alia, conveying approval of the GoI for infusion of additional equity capital up to ₹10,501 crore in ONGC Petro additions Limited (OPaL), conversion of back stopped Compulsorily Convertible Debentures (CCDs) amounting to ₹7,778 crore and balance payment of ₹86 crore with respect to share warrants, totalling to ₹18,365 crore," said a regulatory filing by ONGC.

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The filing said the Centre has permitted allocating half of the annual gas production from new wells or well interventions in nomination fields of ONGC or up to 3.2 million metric standard cubic meters per day (MMSCMD) of domestic natural gas, whichever is lower, for providing feedstock support to OPaL, at a price up to 20% above APM (administrative price mechanism) price.

OPal has a petrochemical complex in Dahej in Gujarat. Commissioned in 2017, OPaL has a capacity to produce 1.5 million metric tonne per annum (mmtpa) of polymers and 0.5 mmtpa of chemicals. OPaL has a 12% market share in India’s polymer segment.

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OPaL was set up as a joint venture between ONGC, Gail India and Gujarat State Petroleum Corp Ltd(GSPC).

The development comes at a time when ONGC is looking to expand its footprint in the petrochemical space. In October last year, Mint reported that ONGC is considering investing around $20 billion to set up two petrochemical projects in India.

ONGC's shares on the BSE closed at ₹332.60 on Friday, up 3.07% from their previous close