ONGC determined to branch out from oil and gas

Oil and Natural Gas Corporation (ONGC), the country’s largest energy exploration company, has allotted Rs 500 crore to evaluate opportunities in renewable energy.

“ONGC does not wish to continue merely as an oil and gas company. It is our vision to become an energy company. We have identified pilot projects in the solar and nuclear energy sphere,” said ONGC Chairman and Managing Director R S Sharma on the sidelines of a conference at the India Economic Summit.

ONGC has a tie-up for uranium exploration under an agreement with the Uranium Corporation of India (UCIL), the only entity allowed to undertake uranium mining in India, with the power to allot mining leases to others, such as ONGC.

“We have created a team at Baroda to undertake the nuclear energy pilot project. The project is expected to begin this year,” he said.

Asked whether the company is looking at setting up a nuclear power plant, Sharma said it will be the “logical way forward” if the pilot is successful.

International oil prices may not stabilise, due to a hyperactive derivatives market which was indulging in speculation to make profits rather than hedging against risk, Sharma said.

“I don’t see oil prices stabilising because of the way the derivatives market is heated. I don’t think stability is likely, at least in the foreseeable future,” he said.

“Stability may not come unless there are regulations, like those by the G20 to put certain restrictions on the derivatives market and there is a limit on the trade, based on the basic natural hedge,” Sharma said.

“The moment derivatives go into the speculative market, I don’t think we will have stability,” he told reporters.