ONGC will focus on its core activity, that is exploration, said the ONGC Group Chairman, Mr Sudhir Vasudeva, at his first media interaction after taking office.
ONGC expects to raise its crude oil output to 28 million tonnes a year by March 2014, and gas production to 100 million standard cubic metres a day by March 2017. Besides, the company is also bringing in foreign partners for increasing its output.
The PSU oil exploration and production major has always come in for criticism for its declining output or not meeting projections. The company’s standalone crude oil output in 2010-11 was 24.42 million tonnes and natural gas production was 23.10 billion cubic metres.
Stating that the existing fields, which are old, are ONGC's cash-cow, he said the company will invest Rs 26,000 crore to increase output at its marginal fields.
Roping in partners for exploration
Asked if technological issues were proving a deterrent for ONGC, Mr Vasudeva, said: “No. Today, there is no technological gap. We are upgrading ourselves consistently.”
ONGC, in fact, is open to selling stake to foreign firms in its exploration blocks to help raise hydrocarbon output.
Cairn
ONGC expects to send the draft of the formal agreement to be inked with Cairn India and Vedanta Resources shortly.
The PSU firm had agreed to give its consent for stake sale in Cairn India to Vedanta Resources and their affiliates, provided the two companies enter into a formal agreement with ONGC on royalty and cess conditions laid down by the Government.
“We have been examining the draft. It will be a matter of days when we will send it to Cairn and Vedanta,” said Mr D.K. Sarraf, Managing Director, ONGC Videsh Ltd, who was Director (Finance) of ONGC till recently.
Follow-on public offer
On share sale of ONGC, Mr Vasudeva said, the promoter, the Government of India must take a call on when it wants to go ahead.
"The market has been behaving very erratically ... The Government has to take a call," he added.
Manpower
Retaining and getting qualified manpower is a challenge for ONGC, he said. In the next five years, 7,000-odd people will be retiring. Though the attrition rate is 0.25 per cent in the company, to create an oil man takes a minimum of five years, he added. The company is recruiting 1,000 people annually.