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Journalism of Courage
Oil and Natural Gas Corporation (ONGC) is in the final stages of negotiation with the domestic refiners for market price of crude oil. The corporation expects a massive jump in its net profit this fiscal once it starts getting international price for its crude.
ONGC has also rejected the management model proposed by British Gas for operatorship of Panna-Mukta and Tapti oil and gas fields. The Corporation along with Reliance Industries is now planning to bring into force the termination notice to remove British Gas from operatorship of Panna-Mukta and Tapti oil and gas fields.
Addressing a news conference, ONGC chairman and managing director Subir Raha said “we produce sweet crude (low in sulphur) which is benchmarked against West African bonny light crude that has averaged around $24 a barrel.”
According to him, ONGC would get the international price once the deal is finalised with the refiners. The pricing formula agreed upon contains a base price (linked to global price of that particular grade of crude oil), premium or discount depending on the quality of crude and freight charges.
ONGC had posted a net profit of Rs 6,198 crore in 2001-02 on a administered crude price of $16 a barrel. Provisionally, ONGC had begun charging $22 a barrel beginning this year, which saw its net profit jump 34 per cent to Rs 1,981 crore in first quarter of 2002-03.
ONGC would supply IOC with 10 million tonnes of crude annually, BPCL and Kochi Refineries with 8.5 million tonnes and HPCL and Mangalore Refinery with the remaining 7.5 million tonnes.
