The Hindu : ONGC becomes debt-free company

Online edition of India's National Newspaper
Tuesday, Apr 30, 2002

Business

Business

ONGC becomes debt-free company

By Our Special Correspondent

NEW DELHI, APRIL 29. The public sector Oil and Natural Gas Corporation (ONGC) will become a debt-free corporate by July this year. It plans to prepay its existing debt and convert itself into a zero debt company.

Disclosing this here today, the ONGC chairman, Subir Raha, said the company's net profit during 2001-02 rose to Rs. 5655 crores from Rs. 5229 crores in the previous year, a rise of 8.1 per cent. He said this made ONGC the most profitable corporate in the country. The turnover during the financial year was Rs. 23,789 crores.

The company's market capitalisation touched Rs. 50,000 crores during the year which is also said to be the highest. The net worth of the corporation rose by 13.1 per cent to Rs. 29,303 crores while earnings per share has increased by 8.1 per cent to Rs. 39.66.

ONGC paid Rs. 3247 crores as corporate tax, lower by 17.4 per cent as compared to the previous year. Significantly, it has brought down its interest liability to a mere Rs. 218 crores, a dip of 40.2 per cent. In addition, it has extended an interest free loan of Rs. 1963 crores to its subsidiary, ONGC Videsh for the Sakhalin project in Russia.

Addressing a press conference, Mr. Raha said the highlight of ONGC's performance during the year was a series of discoveries and enhancement of reserves of existing fields. This has led to a reserves accretion of 191 million tonnes of oil and oil equivalent gas. Of these reserves, 66.5 million tonnes comes from Indian fields, 122 million tonnes from overseas and ONGC joint venture fields will add 2.5 million tonnes. With the addition of these oil and gas reserves and at the current production rate, the fields can produce oil for 24 years and gas for 21 years.

Mr. Raha said the corporation produced 24.7 million tonnes of crude oil during the year, falling marginally short of the target. Gas production is estimated at 24 billion cubic metres, somewhat higher than the target output for the year. The output of value added products such as LPG, naphtha and kerosene is 3.6 million tonnes also slightly higher than the target. On improving the recovery factor, Mr. Raha said the Mumbai High redevelopment scheme was launched with an investment of Rs. 8200 crores to improve the recovery factor by 4 per cent. It is expected to yield incremental production of 76 million tonnes of oil and oil equivalent gas over 30 years. The improved oil recovery (IOR) and enhanced oil recovery (EOR) schemes are being implemented in 15 fields including Mumbai High at a total investment of Rs. 12,097 crores which will improve the recovery factor by 4 per cent on an average. This will yield an incremental 116 million tonnes over 30 years.

Referring to overseas projects, he said the Sakhalin project was progressing on schedule and oil and gas would flow in 2005 and 2007 respectively. The Vietnam Gas project will go on stream by end 2002 which will bring revenue in foreign exchange. ONGC Videsh has also taken a 20 per cent equity stake in an offshore gas exploration block in Myanmar.

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