Oil and Natural Gas Corporation (ONGC) is planning for a capital expenditure of Rs 26,000 crore during the financial year 2010-11. In the current year ending March 2010, the expenditure was Rs 24,000 crore, said RS Sharma, chairman & managing director of the company.
Speaking on the sidelines of a seminar on ?Challenge in matured and frontier basins? here on Monday, he said, during the next financial year, the investment would be made towards developing projects, modernisation and replacement of old pipes. ?ONCG is already into phase-II of modernisation and has replaced the pipelines at many places,? he said.
Oil companies are facing two major challenges?enhancing the yields of matured basin and exploring virgin territories as the demand for oil and natural gas is increasing by the day. For instance, the yields in some oil wells, where the exploration started just five years ago, are falling by about 15% to 30% which is a major concern for the industry. ?The replacement is less than 1%. The discoveries are not easy and often the exploration should happen at deep and ultra-deep waters and hostile terrains,? he said.
The volatile prices of oil is also a concern for the oil industry, Sharma said adding that the price of crude oil per barrel was around $ 10 in 1999 and in a decade it has touched an all time high of $ 147 a barrel last year.
India would continue to be an import dependent nation for meeting its energy needs for years to come, he said adding the demand for energy is increasing rapidly in the emerging nations.