'ONGC can withstand oil prices in $60-90 range'

ONGC, India's state-owned oil and gas giant, is well-equipped to handle fluctuations in oil prices ranging from $60 to $90 per barrel, according to its chairman, Arun Kumar Singh. In a press conference, Singh stated that the company is prepared for both low and high gas prices at the group level. Upstream exploration and production activities account for around 60% of ONGC's profits, while other segments make up the remaining balance.

Singh emphasized that ONGC does not need to alter its medium-term strategy amidst the ongoing global energy crisis, stating, "We don't see any need to tweak our strategy and move away from oil and gas." He also pointed out that oil and gas can be considered the cheapest energy source on an energy equivalence basis. If not for the current geopolitical crisis, oil prices could have been trading at $60-65 per barrel.

Looking ahead over the next 7-10 years, Singh expects renewable energy to accelerate as part of ONGC's energy portfolio, with the company aiming to increase its renewable energy capacity to 10 GW by 2030, currently at 2.5 GW. Despite operating cost reductions of 6-7% over the past year, many savings were offset by an increase in GST rates. Anticipating a decline in oil prices, ONGC had introduced a major cost-reduction plan last year, but oil prices have surged this year due to the US-Iran war.

To further diversify its revenue streams, ONGC plans to establish a global oil trading joint venture by the end of the year, with a partner to be finalized soon. The trading joint venture will be based in either Dubai or Singapore. Additionally, ONGC is heavily investing in deepwater exploration, targeting eight deepwater and ultra-deepwater wells in the current fiscal year and another 10 in the next fiscal year. By 2030-31, ONGC aims to drill 87 deepwater wells, requiring a total investment of Rs 1 lakh crore.