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OIL & NATURAL GAS CORPORATION -Key takeaways
Increase in oil and gas production. ONGC has guided to an increase in oil and gas
production to 28 mn tons and 72 mcm/d by FY2014E from 24.7 mn tons and 63.3
mcm/d in FY2010. The company expects the increase in oil and gas production to come
from the discovered fields under development which includes Cluster-7, WO series, B-193,
B-1, B-22, G-1 & GS-15. The company also expects incremental gas production from
Tripura, Daman and North Tapti region.
Subsidy burden. ONGC highlighted oil ministry’s statement that subsidy burden on
upstream companies will be restricted to one-third of overall under-recoveries. The
subsidy losses for upstream companies have been restricted to one-third of gross underrecoveries
in 9MFY11 and the company doesn’t expect it to change.
Royalty on Rajasthan block. ONGC has officially communicated to government that
royalty issue for Rajasthan block needs to be addressed before the ministry gives inprinciple
approval for Cairn-Vedanta deal. The inclusion of royalty as part of the project
cost has been stated as one of the pre-conditions set by the government for approval of
Cairn-Vedanta transaction.
Development in KG-DWN-98/2. ONGC has submitted the declaration of commerciality
to DGH for approval. The company has the required technology for development of the
Northern region in the block and is likely to start production by FY2015-16. The company
is also seeking technology partner for Southern region of the block, which has discoveries
below 2,800 m of water depth.
Gas price. The company highlighted that government has authorized ONGC to sell gas
from nominated fields at market price with prior approval from government. ONGC is
currently selling gas produced from C-Series fields at US$5.25/mn BTU as approved by the
government.
Tripura power project. ONGC has a50% stake in ONGC Tripura Power Company (OTPC)
which is currently executing power project to commission two units of 726 MW each. The
project is scheduled to complete by April-May 2012. The company plans to increase gas
production from Tripura to 6 mcm/d from 1.5 mcm/d once the power plant is fully
operational.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
OIL & NATURAL GAS CORPORATION -Key takeaways
Increase in oil and gas production. ONGC has guided to an increase in oil and gas
production to 28 mn tons and 72 mcm/d by FY2014E from 24.7 mn tons and 63.3
mcm/d in FY2010. The company expects the increase in oil and gas production to come
from the discovered fields under development which includes Cluster-7, WO series, B-193,
B-1, B-22, G-1 & GS-15. The company also expects incremental gas production from
Tripura, Daman and North Tapti region.
Subsidy burden. ONGC highlighted oil ministry’s statement that subsidy burden on
upstream companies will be restricted to one-third of overall under-recoveries. The
subsidy losses for upstream companies have been restricted to one-third of gross underrecoveries
in 9MFY11 and the company doesn’t expect it to change.
Royalty on Rajasthan block. ONGC has officially communicated to government that
royalty issue for Rajasthan block needs to be addressed before the ministry gives inprinciple
approval for Cairn-Vedanta deal. The inclusion of royalty as part of the project
cost has been stated as one of the pre-conditions set by the government for approval of
Cairn-Vedanta transaction.
Development in KG-DWN-98/2. ONGC has submitted the declaration of commerciality
to DGH for approval. The company has the required technology for development of the
Northern region in the block and is likely to start production by FY2015-16. The company
is also seeking technology partner for Southern region of the block, which has discoveries
below 2,800 m of water depth.
Gas price. The company highlighted that government has authorized ONGC to sell gas
from nominated fields at market price with prior approval from government. ONGC is
currently selling gas produced from C-Series fields at US$5.25/mn BTU as approved by the
government.
Tripura power project. ONGC has a50% stake in ONGC Tripura Power Company (OTPC)
which is currently executing power project to commission two units of 726 MW each. The
project is scheduled to complete by April-May 2012. The company plans to increase gas
production from Tripura to 6 mcm/d from 1.5 mcm/d once the power plant is fully
operational.
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