India's leading oil and gas producer, Oil and Natural Gas Corporation (ONGC), is set to invest approximately ₹1 lakh crore in establishing two petrochemical plants, as the company positions itself for the evolving landscape of energy transition. The move comes amid global shifts away from fossil fuels, prompting companies to explore new avenues for utilizing crude oil.
During an investor call discussing second-quarter earnings, Pomila Jaspal, Director (Finance) at ONGC, revealed that the company is eyeing separate oil-to-chemical (O2C) projects. While specific details were not provided during the call, D Adhikari, Executive Director and Chief of Joint Ventures & Business Development at ONGC, stated, "We have plans to invest ₹1,00,000 crore by 2028 or 2030 in two projects in two separate states."
Adhikari further elaborated that the objective is to enhance petrochemical capacity to 8.5-9 million tonnes by 2030. The company envisions one project to be established independently by ONGC, and the other as a joint venture, though specific details on the latter were not disclosed.
The surge in demand for petrochemicals, essential in the production of plastics, fertilizers, and pharmaceuticals, is anticipated to persist due to their diverse applications across major industries such as construction, automotive, and electronics. Strengthening its chemicals business aligns with ONGC's strategy to reduce dependence on the volatile oil market and enhance long-term profitability.
ONGC already manages two subsidiaries, Mangalore Refinery and Petrochemicals Limited (MRPL) and ONGC Petro-Additions Limited (OPaL), which operate petrochemical units in Karnataka and Gujarat, respectively. To address a "distorted" capital structure, ONGC's board has approved an infusion of ₹18,355 crore in OPaL, increasing its stake to over 96%.
Additionally, the company disclosed plans to scale up its renewable portfolio to 10 GW by 2030, in line with the broader initiative to achieve net zero carbon emissions by 2038. This significant investment in O2C plants is distinct from the ₹1 lakh crore earmarked for energy transition projects by 2030. The move underscores ONGC's commitment to adopting Crude Oil-to-Chemicals (COTC) technology, aligning with global trends that emphasize the direct conversion of crude oil into high-value chemical products, reflecting a paradigm shift in the oil and gas industry worldwide.
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