ONGC registers impressive E&P growth in fiscal FY-08

ONGC recorded impressive physical performance during the financial year 2007-08. In its 177th meeting held on 5th April, 2008, the Board of Oil and Natural Gas Corporation Ltd. (ONGC) took note of the performance of ONGC Group Companies.
During the year there had been a total 28 Exploration discoveries ; out of these 11 had been oil and 17 were gas. ONGC’s overall success ratio was of 44%, a total of 43 oil and gas bearing against 98 exploratory wells tested.

It was the highest-ever aggregate production of Oil and Oil Equivalent of Gas of 61.82 Million Metric Tonnes (1.8% higher than FY-07). This includes ONGC's share of production in Joint Ventures as well as OVL's share of production from overseas assets. Wholly-owned subsidiary OVL was the main contributor for production increase.OVL ventured into two new countries i.e. Turkmenistan and Congo Brazzaville and secured equity participation in 11 oil and gas projects in 6 countries.

ONGC Board approved aggregate investment proposals worth Rs. 28,207 Crore in 12 Board meetings during the fiscal year. In the year the company had the highest-ever CAPEX at Rs. 16,215 Crore (up 22% from 2006-07)

MRPL (ONGC equity holding 72%) achieved highest-ever Throughput - 12.547 Million Metric Tonnes (up by 0.1% from fiscal FY-07). MRPL's Capacity utilization was 129.48% (on design capacity of 9.69 MMTPA).

Crude subsidy hurting ONGC

India's Oil and Natural Gas Corp is facing losses on every barrel of crude oil due to high government subsidies. The company said this would be the first time it would post negative margins on crude oil sales. This loss comes at a time when crude oil producers around the world are making windfall profits due to record highs in oil prices.

The margin of India's oil major on oil sales is at an all-time low of around 15 cents per barrel, almost a tenth of what it was two years ago. Globally, oil companies have margins of more than $2 per barrel, said a senior ONGC official.

"If oil prices increase any further, our margins on oil sales will turn negative," ONGC Chairman and Managing Director R.S. Sharma told UPI.He said ONGC planned to approach the Petroleum and Natural Gas Ministry to seek a reduction in the subsidy share paid to the oil marketing companies.

ONGC in Iran

ONGC, India's top explorer, was in talks to develop oil and gas fields in Iran but a definitive agreement was still some way off, the company's chairman told a news agency recently.ONGC, through its overseas investment arm ONGC Videsh Ltd, and the Hinduja Group are together eyeing a role in developing the South Pars Phase 12 gas field and the Azadegan oil asset.

"It is too early to set a time frame," R.S. Sharma, chairman and managing director at ONGC, told newsmen. "A lot of ground has to be covered before reaching a stage of signing a definitive agreement," he said.

A venture in Iran would be ONGC Videsh's second entry into the hydrocarbon-rich nation, where it operates the Farsi block. Iran is drawing interest from Indian and Chinese firms that are keen to tap the world's second-largest reserves of oil and gas and are less susceptible than many other companies to Western pressure over Tehran's nuclear programme.

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