Oil and Natural Gas Corporation (ONGC) plans to invest Rs 2 trillion to achieve Scope-I and Scope-II emission targets by 2038, chairman and CEO Arun Kumar Singh said at a press meet after its annual general meeting on Tuesday.
“We have announced our Scope-I and Scope-II transition by 2038. Our multiple green initiatives will require Rs 1 trillion by 2030. There are various parts to it like green ammonia, hydrogen, solar, PSP and offshore windmills,” he said.
ONGC is actively exploring collaborations with leading players to leverage various low-carbon energy opportunities, including renewables, green hydrogen, green ammonia and other derivatives of green hydrogen.
The state-owned company has adopted various de-carbonisation levers that enabled it to lower its Scope-I and Scope-II emissions by 17% in the last five years. In FY23, it reduced emissions by 2.66% to 8.89 MMTCO2e, from 9.14 MMTCO2e in FY22.
It plans to scale up its renewable portfolio to 10 giga watt (GW) by 2030. There’s an increasing focus on research and development in carbon capture, utilisation and storage (CCUS) technologies to mitigate emissions from existing processes.
Singh said it makes a strong economic sense in investing in green initiatives as there is a carbon market in the offing. There is also a big export opportunity of green products and the financing cost for such projects is much lower.
ONGC has already signed a deal to set up 5 GW of solar power capacity in Rajasthan and is scouting to add another 5 GW of renewable energy capacity. It is open to all options, including wind power and acquisitions, to meet its target of 10 GW, depending on “economics and return”.
However, the chairman made it clear that the company would continue focusing on its conventional business of upstream and downstream. He said India’s energy story will remain different from others for the next 10-20 years. “ONGC has enough financial muscle to carry on both India’s energy story and the transition story simultaneously for next 5-10 years. Our net worth is around Rs 2.5 trillion and considering a debt-equity ratio of 2:1, we can borrow Rs 5 trillion.”
Speaking at the AGM, Singh said domestic production is expected to enhance with the incremental output from the KG deep-water field in the eastern offshore over the next few years. It has deployed two drill ships and has commenced drilling of exploratory wells in deep-sea of Mahanadi basin of eastern offshore.
The company has constituted an empowered in-house ‘production squad’ for rejuvenation of western offshore. The multi-disciplinary squad will focus on production enhancement, reservoir pressure management, equipment availability and expediting project execution.
ONGC, which has set a target to bring 500,000 sq km of area under active exploration by 2025, has a capex programme of over Rs 30,000 crore.
Its overseas arm ONGC Videsh (OVL) said the production level of Sakhalin-1 has reached the level of about 180,000 barrels per day, close to the pre-crisis production level of about 200,000 barrels per day.
In case of Mozambique, where OVL is executing its largest project, security situation has continued to improve and construction boots are on the ground. The company expects revocation of force majeure anytime this fiscal, Singh said.