The Hindu : Business : ONGC to get bonanza from high world oil prices

Online edition of India's National Newspaper
Thursday, Sep 30, 2004

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Business

ONGC to get bonanza from high world oil prices

By Our Special Correspondent

NEW DELHI, SEPT. 29. Soaring world oil prices will give the Oil and Natural Gas Corporation (ONGC) a temporary bonanza as it is now getting import parity prices for domestic production of crude oil. According to ONGC Chairman and Managing Director, Subir Raha, domestic output is linked to prices of the Nigerian Bonny Light crude, now quoting at $42 a barrel. Prices for the overall basket of crude oil being imported by Indian refineries are even lower at about $40 a barrel, though the more expensive New York Mercantile Exchange crude is the one which crossed the $50 barrier yesterday.

Speaking about the company's plans to raise output, he said production was likely to increase to 29 million tonnes over the next two years from 26.7 million tonnes achieved in 2003-04. This follows a series of measures being taken by the corporation to raise output by developing Bassein in Mumbai High, Assam and some areas in the Krishna Godavari basin. ONGC is also reviving 94 marginal fields besides undertaking 15 enhanced oil recovery projects. In this context, he said the country was not likely to become self-sufficient in crude oil production.

Higher profits, dividend

Mr. Raha who today announced that ONGC's profits of Rs. 8,664.40 crores are the highest among all Indian companies for 2003-04, said it also paid the highest dividend of Rs. 3,422.20 crores. These figures would have been higher but for the subsidy of Rs. 2,690 crores paid to the oil marketing companies by way of discounts in the prices of crude oil, LPG and kerosene. This payment was made on the directive of the Central Government. In addition, he said rupee appreciation vis-a-vis the dollar reduced rupee revenues on sale of crude oil. Of the total dividend, an interim dividend of 140 per cent amounting to Rs. 1,996.30 crores was paid earlier in February this year.

Addressing a press conference, he said the company's turnover during 2003-04 was Rs. 32,972 crores while contribution to the exchequer during the last fiscal was Rs. 16,858 crores. This included Rs. 14,303 crores to the Central Government by way of cess, royalty, excise duty, corporate tax, dividend and customs duty. The balance Rs. 2,555 crores went to State governments in the form of royalty, sales tax and octroi. "The ONGC continues to be the single largest creator of public wealth in India", he said.

Retail marketing

Regarding entering retail marketing sector, he said land had been acquired for opening petrol pumps but less than ten would come up in the first phase in the current fiscal. Though the petrol pumps would be supplied by the Mangalore Refinery and Petrochemicals Limited (MRPL), he said these would be across the country and not only in Karnataka.

As for ONGC Videsh Limited (OVL), he said the company's turnover had risen from Rs. 11 crores in 2001-02 to Rs. 3,245 crores in 2003-04. OVL began earning revenues from its Vietnam project in 2002-03 while revenues from the Sudan venture came in the last fiscal, he said.

At present, he said OVL had laid footholds in hydrocarbon acreages in Ivory Coast, Australia and Angola.

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