ONGC to Ramp Up Output

Fighting a fall in the oil and gas output for past few years, Oil & Natural Gas Corp. (ONGC) is pegging a substantial hike in hydrocarbons production in the next few years, hoping to commission new fields, company new chairman Sudhir Vasudeva said on Tuesday.

The state-run company intends to revisit strategies of exploration, with the company ‘s core focus having been fixed on exploration, Dow Jones quoted Vasudeva as saying at a news conference, a day after his assuming head post of India's most profitable company.

ONGC which is in the process of investing $3.2 billion as it aims to sustain production from mature fields by use of technology, is open to partnerships with overseas oil and gas majors in its oil and gas blocks, he said.

Reliance Industries Ltd., India's largest private sector explorer by sales, on Aug. 30 closed a deal with U.K. based BP to sell a 30% stake in its 21 oil and gas exploration blocks in India.

Analysts expect ONGC to ink a similar deal as it needs deepwater exploration technology and to ease the risks of its domestic business.

ONGC has been struggling to prevent a decline in oil and gas output as its main fields have been in production for decades while it failed to bring any new major field into production.

As such, a partnership, whether strategic or for technology, is a vital key in its turnaround strategy.

The company is in talks with Italy's ENI S.p.A. and a local unit of the U.K.'s BG Group PLC to sell up to 30% of an oil block located on India's east coast, the Business Standard reported in June.

Asked about the government's plans to sell a 5% stake in the company, Vasudeva said it is for the government to decide. The market is behaving erratically. The government has to take a call."

The government, which holds a 74.14% stake in ONGC, the country's largest oil producer by output, last month deferred a stake sale plan, without giving any reason.