ONGC too busy to make foray in nuke power

About two years ago, state-owned Oil and Natural Gas Corporation (ONGC) initiated a dialogue with the Bhabha Atomic Research Centre to develop thorium, a key material for the nuclear energy.

"The partnership with BARC is not moving forward at all as we already have too many joint ventures (JVs) to deal with," a senior ONGC official, who did not want to be named, admitted.

JUST TOO MUCH

The country's most profitable company already has 10 JVs in India and has two subsidiaries, OVL and MRPL

The gas and oil company has agreements with Petrobras, Shell, NorskHydro, ENI, BP, Gazprom, the LN Mittal group and the Hindujas

ONGC was banking on the the country's 290,000 tonnes reserves of thorium when planned a JV with BARC

The proposal to set up a Rs 200-crore helium extraction plant in Tamil Nadu moves at a snail's pace

As the Indian and the US governments were piecing together the nuclear pact, the country's most profitable company had announced that it would work with India's premier research lab to process thorium, which also includes mining. During that time, several large companies had also declared their intention to join the nuclear power bandwagon.

ONGC officials said the joint venture has not taken off the drawing board. The reason, they said, is the company has too much on its plate.

Domestically, ONGC has forged 10 major JVs. It has partnership with Petrobras, Shell, NorskHydro, ENI, British Petroleum, Gazprom, the LN Mittal group and the Hinduja group, among others.

"All of these leave no time for any other joint venture," the official added.

In fact, it is not only the foray into nuclear energy that has hit the road block but also the agreements with Shell and the Hindujas. These have failed to yield results even two years after ONGC signed the agreements.

ONGC Chairman and Managing Director RS Sharma declined to comment on the issue. However, he had earlier told Business Standard that the success of the joint ventures would be pursued with greater intent. Sharma was the caretaker chairman of ONGC for over a year after former chairman Subir Raha's term was not extended.

Ground Zero reality
India has modest reserves of uranium "" a fuel of choice for nuclear energy "" but given the abundant supply of thorium, this is set to play a key role in the indigenous nuclear power programme.

"The country has reserves of 290,000 tonnes of thorium, about one quarter of the world total. Thorium is likely to fuel the country's nuclear power programme in the long-term," the ONGC official said. This is the opportunity ONGC is seeking to develop with BARC.

ONGC also has a proposal to set up a Rs 200-crore helium extraction plant at Kuthalam in Tamil Nadu in partnership with Saha Institute of Nuclear Physics.

Helium is used as a coolant in nuclear reactors.

Ministry has a different view

While ONGC has chosen diversification path, which is common among energy companies worldwide, the petroleum ministry has a different view on the subject.

Echoing the general view, Delhi-based analyst said: "Oil companies are extremely restless and there is a constant search to enter new businesses, especially alternative energy sources."

The ministry, on the other hands, wants ONGC to focus on its core area exploration and production of oil and gas.

"Its existing oil fields are ageing and recent discoveries have not been huge. Diversification into other sectors should happen only after the core business is taken care of," an oil ministry official said.

The diversification is not impacting the growth of the core business, said ONGC, which has earmarked over 90 per cent of the Rs 120,000 crore investment, planned over the next five years, for its exploration business.

Analysts said ONGC is on the correct path. "Oil companies have to diversify. They have to be vertically integrated to take their business forward," said an analyst.