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ONGC's Finance Director Pomila Jaspal signals major investments

2023-10-11

ONGC's finance chief stated that the company's balance sheet, strengthened by its record-high profits over the past two years, was now robust and prepared for substantial investments. He mentioned that the company's annual capital expenditure (capex) would increase by 10% in the next financial year due to heightened upstream activity. Moreover, he anticipated a doubling of the capex to Rs 600 billion after three years as the new petrochemical and green energy plans took shape.

India's largest oil and gas producer, ONGC, disclosed a combined profit of approximately Rs 800 billion in the two years leading up to March 2023, resulting in the elimination of its net debt. For the past decade, the company consistently distributed dividends to shareholders, constituting around 30-45% of its annual profits. However, its annual capex had remained stagnant at approximately Rs 300 billion for the same period.

Pomila Jaspal, director (finance) at ONGC, explained in an interview that this stagnation was attributed to the absence of new field development plans. ONGC had not made significant oil discoveries in decades, and certain gas discoveries couldn't be developed due to lower domestic natural gas prices. Jaspal revealed, "There was a time when the gas price was $ 1.79 per mmbtu. We were not able to economically evaluate any project. So, at that point in time, most of the projects remained in cold storage." She further noted that with the change in domestic pricing policy and the subsequent rise in prices, some gas projects had become economically viable and were now being pursued.