ONGC rose 1.88% to Rs 130.40 after the company on Thursday won seven oilfields offered under the fourth round of Open Acreage Licensing Programme (OALP) auctions.
Ministry of Petroleum and Natural Gas on Thursday signed contracts for 7 blocks, awarded under Open Acreage Licensing Programme (OALP) Bid Round - IV. The Government had launched OALP Bid Round-IV on 27 August 2019. The Bid Round-IV offered 7 blocks under International Competitive Bidding (ICB) process. The bidding round closed on 31 October 2019.
Subsequent to evaluation, all 7 blocks were approved for award to ONGC, for which the revenue sharing contracts have been signed.
The total area awarded in the 7 Onland blocks is 18,510 sq.km. The blocks are spread across 3 sedimentary basins located in the states of Rajasthan, Madhya Pradesh and West Bengal.
Meanwhile, the stock also saw significant buying action after the Brent crude futures spurted on Friday after a US air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies.
In the commodities market, Brent crude for March 2020 settlement was up $2.04 a barrel, or 3.18% at $68.29 per barrel. The contract jumped nearly $3 to hit a high of $69.16 a barrel, the highest since 17 September 2019.
Higher crude oil prices could increase realizations from crude sales for oil exploration firms.
Meanwhile, a foreign brokerage reportedly upgraded ONGC to 'Buy' with a target of Rs 175. The brokerage said it has turned more positive on the Indian upstream as free cash flow generation and dividend yield remain strong.
ONGC is the largest oil and gas exploration and production company in India in terms of production and reserves of oil and gas for the 2019 fiscal year according to the Ministry of Petroleum and Natural Gas.
ONGC reported 36.2% fall in consolidated net profit to Rs 5,275.51 crore on 10.5% fall in net sales to Rs 1,01,554.26 crore in Q2 September 2019 over in Q2 September 2018.
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