ONGC to continue buying Russian oil, plans ₹66,000-cr projects and bp-backed output push.

ONGC will continue to buy Russian oil as long as it is commercially viable. The company has 21 projects under implementation at an estimated cost of ₹66,000 crore and plans to acquire overseas energy assets if available at a reasonable price. ONGC expects a major recovery in output from its flagship Mumbai High field in 13-14 months through a partnership with UK-based bp. The company's director said preliminary indications for the partnership are good.

Oil & Natural Gas Corporation (ONGC) has reiterated its commitment to purchasing Russian oil as long as it remains commercially viable. The company's chairman, Arun Kumar Singh, stated that ONGC will continue buying Russian oil, emphasizing its affordability and lack of government restrictions [1]. Despite challenges such as Trump's tariffs and banking restrictions affecting dividend repatriation, ONGC remains open to acquiring overseas upstream assets at reasonable prices [1].

ONGC's refineries, operated by Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corporation Ltd (HPCL), have a combined refining capacity of over 40 million tons per annum (mtpa) and have been steady clients of Russian oil since the onset of the Russia-Ukraine war [1]. Singh noted that the company will keep buying Russian oil as long as it is economically attractive, indicating a cautious yet strategic approach to procurement.

ONGC is also expanding its global footprint through strategic acquisitions in foreign oil and gas projects. The company plans to purchase 0.6-0.8 million tons of ethane annually from the United States for a petrochemical project, signaling its efforts to diversify its feedstock sources [2]. Additionally, ONGC is open to acquiring overseas energy assets if they are available at a reasonable price, aiming to enhance its position in the international energy landscape [2].

The company's director highlighted the expected recovery in output from its flagship Mumbai High field, which is anticipated to occur in 13-14 months through a partnership with UK-based bp. Preliminary indications for the partnership are positive, suggesting a significant boost to ONGC's production capabilities [1].

ONGC's cautious approach to expansion and operational plans is evident in its emphasis on fair pricing for potential acquisitions and affordable procurement strategies. This strategy aims to optimize costs and ensure that any acquisitions or purchases add value to the company's portfolio [2].

As ONGC moves forward with its plans, industry observers will be watching closely to see how these strategies unfold and impact the company's future growth trajectory and its role in the global energy market.

References:
[1] https://economictimes.indiatimes.com/industry/energy/oil-gas/ongc-units-to-keep-buying-russian-oil-if-prices-economical/articleshow/123591099.cms
[2] https://scanx.trade/stock-market-news/stocks/ongc-eyes-foreign-oil-and-gas-acquisitions-emphasizes-fair-pricing/18016174