ONGC is willing to join hands with any party who can help us monetise discoveries quickly and enhance recovery in all areas, while stake in deep-sea blocks will depend on partners bringing high-end technology and de-risking, chairman Arun Kumar Singh tells TOI.
ONGC has been at the receiving end for not moving fast to raise production. How do you plan to change that?
Globally, large discoveries are happening in deep-sea. Our deep-water is not well explored. We are hoping for major deep-water findings soon. We have to be very aggressive in making discoveries. So, we have to ramp up exploration and collaboration. Make decisions fast, explore more and collaborate in all the areas where there is more potential such as the deep-sea in eastern offshore. Second, since (oil) prices are good we have to bring into production our discoveries quickly, either ourselves or through a private partner. Some may also involve foreign partners, based on commercial perspectives such as large capex or high-end technology. This has to be done in the country’s interest. Third, we have to focus on how to maximise production (from existing fields) through collaboration. Globally oil recovery is 30% or more. It is around 26-27% in our case. It is only for difficult deep-water fields that technology experts can help us in the process. Essentially, you bring in anything that could add to the oil recovery process.
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Does collaboration mean offering stake in fields?
Talking about a stake in collaboration phase is a far-off question. In cases of some difficult terrains, why not. But then the party has to de-risk us and bring capex, provided it knows better than us. The important thing is we are willing to collaborate and are looking at the India Energy Week as a platform for forging relations.
Is the proposal to offer stake to private entity in Mumbai High still on the table?
Technologically, ONGC is strong in shallow waters. We know Mumbai High like the back of our hands. But if a party can add value to our business (in any field) they are welcome.
There is a fear that private partners will flog the ageing fields to quickly maximising return on investment at the cost of their long-term health…
The focus is to enhance the percentage of recovery and not increasing the rate of production in one year or so. We are talking, say, over 10-15 years. ONGC has to work in the national interest, unlike others who have only commercial interests. We have to figure out ways that cater to the national interest and that is one reason we are looking at collaboration and partnerships in difficult fields.
Last year, ONGC was asked to hive off technical & field services into SBU (special business unit). Is the proposal still on?
What will be the SBU’s goal? SBU cannot be formed until all resources are embedded in it strategically or else business won’t run effectively. ONGC activities have multidisciplinary interdependence. All functional directors are involved in drilling of each single well. It means you are functional at the board level but multifunctional at the delivery level. We need to have 100% control over all resources and functions.
Will the windfall gains tax impact ONGC’s capex plan?
The additional duty has lowered our net realisation from crude and prices. But ONGC will continue to invest around Rs 30,000 crore annually in development and redevelopment of fields.
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What is the status of the proposed gas subsidiary?
The Kirit Parikh committee report (on gas pricing) says explicitly that the market will get deregulated in January 2026. Our reading says that the need for a subsidiary will not exist if the government accepts the report. You create a subsidiary only if you see great gains. Subsidiaries bring their own problems.
What is ONGC’s transition roadmap? Will this segment see higher capex allocation going forward?
ONGC is aligning its business values with the government’s thrust on transition. We are pursuing opportunities in a gamut of areas, ranging from geothermal energy, green hydrogen and ammonia, offshore wind to carbon capture. We have enabling MoUs and will give capex push wherever needed.
