ONGC earmarks Rs 10,000 cr for capex

Oil and Natural Gas Corporation (ONGC) is targeting to become a $50 billion company in five years.

The company has reserved Rs 10,000 crore for capital expenditure in India and Rs 4,000 crore for overseas investments during the current financial year.

"While Rs 3,500 crore is earmarked for exploration in India, Rs 5,000 crore will be invested in new projects, revamping existing ones and technology induction," Subir Raha, chairman, said.

Besides, the oil major has will be pumping Rs 500 crore into improving information technology systems and Rs 100 crore for retail foray. "We are planning to launch four-five retail outlets in the south for testing our brands," Raha said.

Company executives said the company might acquire Cairns exploration blocks in the Gulf of Cambay and KG Basin for $135 million. "About $600 million is will to be spend to foray into Angola."

ONGC is planning to invest in petrochemicals and power too, for which preliminary feasibility exercises are underway. The company is eyeing investments in the Dahej special economic zone.

ONGC expects production in 2004-05 to stay at the previous year's level of 26 million metric tonne of crude and 23.5 billion cubic metre of natural gas.

"We are looking at a plateau in 2004-05 and increases will come in 2005-06. After 2006, higher production is expected because of new facilities," Raha said.

The company is also expecting better realisation during the current financial year. During April-June, the realisation increased to $34 a barrel from $29.9 a barrel in 2003-04.

ONGC is seeking acquisitions in Africa, Latin America and the Commonwealth of Independent States, and is hoping to producing 400,000 barrels a day from its overseas properties by 2010-11.

As part of it expansion, ONGC has sought government permission to build a 1,400 km oil product pipeline in Sudan. Raha said the proposal would soon come up for cabinet approval.