ONGC open to partners for Kakinda refinery

Hyderabad: Oil and Natural Gas Corporation (ONGC) is set to tie up loose ends for the Rs 26,500-crore 15-million-tonnes per annum Kakinada refinery project and has hinted at being open to strategic partners.

The Chairman and Managing Director of ONGC, Mr R.S. Sharma, said that SBI Caps, which was appointed for project financial appraisal had raised some objections with regard to cost and power plant. “We expect to address those and submit our views shortly.”

Addressing a press conference here on Monday, Mr Sharma said, “Once this is over, within the next 10 days we could get necessary approvals.”

The company has already received project appraisal from Engineers India Ltd.On the proposals by Hindujas to invest in the venture, Mr Sharma said that there had been no direct talks, as yet, with them.

However, there were indications that they would be interested in partnering the venture. “We are open to strategic partners for this project.”

K-G Basin

On K-G basin projects, Mr Sharma said that ONGC was keen to expand its presence in the K-G basin region and the focus was now on expanding the Tatipaka refinery by doubling its capacity and extracting more out of the existing wells as production from most of the old wells is depleting each year.

On deep water blocks, Mr Sharma said there had been shortage of oil rigs.

This meant that ONGC needed to focus on developing them as a cluster.

“We are in the process of approaching the Director-General of Hydrocarbons to allow us to develop this as a cluster,” he said.

In fact, to address the shortage of rigs, Mr Sharma said that in a transparent manner ONGC has decided to offer higher pricing for early supply of rigs. But it would be a while before the pressure on rigs would ease. “However, we are also in talks with RIL for rig-sharing,” he added.

One of the focus areas for the oil major has been to step-up production from existing wells and marginal assets. “We believe that there is potential to extract more from these wells and ensure sustained output. The drop in production in old wells is a global phenomenon and new capacity addition would take a while,” he pointed out.

Despite several hurdles, ONGC’s production and performance were on projected lines, he said.