ONGC takes up Bombay High revamp

NEW DELHI, SEPT 22: Oil and Natural Gas Corporation ONGC is likely to face shortage in oil production for at least two years till its o...

NEW DELHI, SEPT 22: Oil and Natural Gas Corporation ONGC is likely to face shortage in oil production for at least two years till its off-shore Bombay High wells are completely restructured. Bombay High accounts for a third of ONGC8217;s total oil production.

Chairman and managing director of the company B C Bora said consultants 8212; Geffiny Cline and Associates had already been appointed to work out possibilities of developing more gas and oil reserves at the Bomaby High as part of the restructuring exercise. Bora was addressing a news conference here last night after the annual general meeting of the corporation.

Admitting a decline in the reserves at Bombay High, he said that the basin was being tapped for gas over the past 15 years and it was only natural that gas reserves would start depleting after such a long period.

ONGC produced 26.4 million tonnes of oil and 18.4 billion cubic metre of natural gas during 1998-99 out of which Bombay High alone contributed 10.5 million tonnes of oil, Bora said.

ONGC while making only a marginal increase in its net profit, more than doubled its dividend at Rs 784 crore for 1998-99 to revive its share prices in the aftermath of cross-holding of equity with the Indian Oil Corporation. 8220;We have enhanced the dividend to revive the share prices and correct the investors8217; perception,8221; Bora explained.

Net profit of ONGC increased by a meagre 2.9 per cent at Rs 2,754 crore in the last financial year, but Bora declared an enhanced 55 per cent dividend against Rs 356 crore in the previous financial year.

Admitting that cross-holding of 10 per cent equity with IOC had originally sent 8220;wrong singals in the market,8221; Bora ruled out any bonus share or offloading of IOC equity.

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Though nothing concrete had firmed up with IOC after the strategic alliance, Bora said the companies were looking for equity oil abroad.

ONGC still has Rs 400 crore outstandings from the Government in the oil pool account. I N Chatterjee, director finance said with the rise in the international oil prices the pressure on the oil pool account was likely to build up.

Asked about ONGC8217;s gross revenue projections for the current fiscal, Bora said that the company was targeting a gross revenue of Rs 16,000 to Rs 18,000 crore and the profits were likely to be 2,800 crore in 1999-2000.

8220;This increase of about Rs 1,500 crore in the gross revenue during the current fiscal mainly on account of the rise in the international crude oil prices,8221; he said.

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Bora also stated that ONGC was working on several projects worth Rs 2,500 crore for field development, exploration of oil reserves and related activities which are in progress including development of B-55 in the Western Offshore, Gandhar phase-II, institution combustion at Balol, Santhal in Gujarat and additional co-generation plant at Uran.