ONGC sees 18% jump in production in the next three years


India’s largest oil and gas producer ONGC has said that the company’s oil production will jump by 18% by FY2024-25.

With the support of billions of dollars of investment, the oil major has hoped that the production will peak from the current fiscal year.

In the previous fiscal year (2021-22), ONGC produced 21.707 million tonnes of crude oil, which is refined to produce petroleum products like petrol and diesel.

In the current fiscal year (2022-23), crude oil production is slated to rise to 22.823 million tonnes and gas to 22.099 bcm. In the following fiscal year, oil production will climb to 24.636 million tonnes and 25.689 million tonnes in 2024-25, ONGC management told its investors after Q2 earnings.

Speaking on natural gas production, the company opined that it will als rise to 25.685 bcm in 2023-24 and 27.529 bcm in the following year.

ONGC, which contributes around 71% to India’s domestic production, has reported a gradual decline in output for over a decade because its fields are old and ageing.

The government has considered giving away ONGC‘s biggest oil and gas fields to private and foreign companies in an attempt to boost output but this has faced internal resistance.

ONGC is now investing 59,000 crore in 20 major projects, including in bringing to producing oil and gas reserves found in deepsea KG block KG-DWN-98/2 (KG-D5) and the fourth phase redevelopment of mainstay Mumbai High fields.

According to the state-run largest oil company, the first oil from KG-D5 is expected in May 2023 and peak output of 45,000 barrels per day of gas (2.25 million tonne annually) and about 12 million standard cubic meters per day of gas will be in 2024-25.

It said the oil block is likely to yield 1.935 million tonnes of oil and 2.784 bcm of gas in 2023-24.

In the second quarter of the current fiscal year, the country’s top oil and gas producer ONGC reported a 30% fall as the government brought a new tax on windfall profits arising from a spurt in international energy prices.

The company’s net profit stood at 12,825.99 crore, or 10.20 a share, in July-September 2022-23.

Profit fell 15.6% over the preceding June quarter when it had reported 15,205.85 crore net profit.

Net profit fell despite the company’s gross billing for crude oil it produced soaring 37.7% to $95.49 per barrel in July-September from $69.36 a barrel a year back.

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