ONGC gets govt nod for Rs18,365-cr investment in ONGC Petro additions Ltd
13 Aug 2024
Oil and Natural Gas Corporation (ONGC) has received approval from the ministry of petroleum and natural gas for its planned Rs18,365-crore investment in ONGC Petro-additions Limited (OpaL).
As per the ministry’s letter dated 9 August 2024, the state-owned oil and gas explorer can invest additional equity capital of up to Rs10,501 crore, convert compulsorily convertible debentures (CCDs) worth Rs7,778 crore, as also the balance of Rs86 crore worth of warrants into shares.
This investment will give ONGC 95.69 per cent equity stake in OpaL making it a full subsidiary of the oil exploration company.
Government of India has also allowed ONGC to allocate 50 per cent of annual gas production from new wells or fields allocated by the government to ONGC or up to 3.2 million metric standard cubic meters per day (MMSCMD) of domestic natural gas, whichever is lower, to provide feedstock support to OPaL.
The gas allocated under this scheme will be priced 20 per cent over the rate set by the Administrative Price Mechanism (APM). The investment in OPaL will bolster ONGC’s production capacity and market position.
While presenting the annual financial performance, earlier this month, ONGC projected increase in production in the coming months, The oil producer, however, reported a 15 per cent year-on-year decline in first quarter FY25 profits to Rs8,938 crore.
ONGC’s revenue for the quarter increased by 4 per cent from the previous year quarter to Rs35,266 crore.
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