State-owned oil and gas companies in India are set for their lowest spending in the last four financial years with the interim budget proposing a capital outlay of 93,639 crore for 2019-20 .

The spending is less than this fiscal year’s outlay of 94,438 crore, while it was 1.32 trillion in the previous year. In 2016-17, it was 1.04 trillion, while in 2015-16 it was at 97,223 crore, according to the Expenditure Budget document.

Among the state-owned oil marketing companies, the capital outlay for Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL) rose 13% and 7%, respectively, the document showed.

While HPCL has an outlay of 9,500 crore in 2019-20, compared with 8,425 crore in 2018-19, BPCL will spend 7,900 crore, as against 7,400 crore this fiscal year.

The largest oil marketing company, Indian Oil Corp. Ltd (IOCL) however, has seen its capital outlay drop marginally to 25,084 crore in 2019-20, from 25,582 crore in 2018-19.

“Most of the capital intensive projects for these companies are already implemented, so going forward, capital expenditure for large projects would be at the end of the project cycle and immediate outflow will be limited. Currently, capital expenditure is limited to de-bottlenecking projects and laying of pipelines and expanding marketing network," said K. Ravichandran, group-head, corporate sector ratings at rating agency ICRA.

Ravichandran said exploration and production companies such as Oil and Natural Gas Corp. (ONGC) and Oil India Ltd (OIL) have a separate outlay for acquiring oil and gas blocks.

The capital outlay for ONGC, India’s largest exploration and production company, fell 0.26% from 33,007 crore in the current fiscal year to 32,921 crore in 2019-20. The capital outlay for its overseas arm, ONGC Videsh Ltd is down 15% to 5,161 crore from 6,111 crore.

The capital expenditure for OIL is at 4,105 crore for 2019-20, marking a 7% increase, from 3,849 crore to be spent in the current financial year. The spending, however, is being curtailed at a time when the government wants an increased focus on ramping up domestic output to curb rising oil imports.

For state-run natural gas utility GAIL India Ltd, capital outlay is at 5,339 crore, down by 9.5% against 5,902 crore in 2018-19.

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