State-owned oil and gas producing major Oil and Natural Gas Corp plans to increase its cumulative production of crude oil and natural gas by 20% to 47 Million Metric Ton of oil equivalent (MMtoe) comprising about 21.8 MMT of crude oil and about 25.5 BCM of gas from the current 39.45 MMtoe over the next three years.
Additionally, the company expects its oil production from the KG-98/2 block to increase to 20,000 barrels per day in the third quarter of the current fiscal year 2024-25 and then subsequently reach its peak production of 45,000 barrels per day in Q4FY25.
“We will be ramping our (oil) production from KG 98/2 from current 12,000 barrels per day (bpd) to 20,000 bpd in Q3FY25 and 45,000 barrels in Q4FY25,” the company’s management said on Tuesday in an investor call.
It also expects the KG block to produce 10 million metric standard cubic metres per day (mmscmd) of gas, its peak capacity, by the end of FY25. This is expected to increase ONGC’s overall oil production by 11% and that of gas by 15%.
“We are also working on the monetisation of stranded gas with completion of the Urja Ganga pipeline and Indradhanush pipeline,” the company said. “1 billion cubic meters (bcm) of gas will come from KG 98/2 and 0.3 bcm of gas from stranded gas fields in different geographies of the country including Silchar and Bokaro among others.”
The company’s crude oil production in Q4FY24 increased by 2.4% to 5.359 million tonnes while gas production decreased by 3%.
The company also intends to monetise 8-10 discoveries in the financial year 2024-25. In FY24, the company made 11 discoveries of which seven were monetized. Out of these, 6 are prospects and 5 are new pool discoveries. The company also monetized 7 hydrocarbon discoveries during the year.
For FY25, the company has set its capital expenditure target to the tune of Rs 33,000-35,000 crore against Rs 37,000 crore spent in FY24.
“Main reason for high capex in FY24 has been that 98/2 project had some issues with respect to change order and settlement with contractors,” the company said. “So, a large amount was spent there. We also had certain expenditures on pipeline replacement in western offshore.”
Addressing a query on its crude oil realisations and prospects after the imposition of windfall tax by the government, the company said that even at the level of $75 per barrel, it stands at a comfortable cash flow position.
“It is not alarming but at the same time, efforts are on to take up the issue of windfall tax with the government which at our level we have been trying,” said the company.
ONGC’s net crude oil realisations in Q4FY24 improved to $80.81 per barrel against $77.12 per barrel in Q4FY23.
The company, on Monday, reported a surge of 78% in its consolidated net profit for the last quarter of financial year 2023-24 at Rs 11,526.53 crore against Rs 6,478.23 crore in Q4FY23 as the net crude oil price realizations improved. On a sequential basis too, the net profit increased by 4% from Rs 11,104.50.