Oil and Natural Gas Corp (ONGC) - State-owned has set a target to double oil and gas output from its domestic and overseas fields and expand its refining capacity three-fold alongside diversification into renewables in a new vision document for 2040, its Chairman Shashi Shanker said.
The firm produced 25.81 billion cubic meters of natural gas and 24.23 million tonnes of crude oil in the 2018-19 fiscal year from its domestic fields. Another 10.1 million tonnes of oil and 4.736 billion cubic meters of gas were produced from its overseas assets. ONGC had a turnover of Rs 109,654 crore and a net profit of Rs 26,715 crore in the year ended March 31, 2019. As on August 16, it had a market capitalization of Rs 164,458 crore.
Shanker in the company's latest annual report said the ONGC board recently approved the business roadmap for the company and its other group entities -- 'ONGC Energy Strategy 2040'. The 'Energy Strategy 2040' entails ONGC achieving "three times revenue distributed across exploration and production, refining, marketing, and other businesses; four times current Profit After Tax, with 10 percent contribution from non-oil and gas business; and 5-6 times current market capitalization.
"The strategic roadmap envisions a future-ready organization whose growth is predicated on a few important planks: consolidation of our core upstream business (domestic and international); expansion into value accreting adjacencies in the oil and gas value chain (downstream and petrochemicals) and diversification into renewables (offshore wind) and select new frontier plays through dedicated venture fund," it said.
The document targets cumulative upstream output (local and overseas) almost doubling from current levels with 2 percent and 5 percent compound annual growth rate in domestic and international operations respectively.
With two 35 million tonnes per annum of oil refining capacity vested in its two subsidiaries -- HPCL and MRPL, ONGC is targeting to raise this capacity to around 90-100 million tonnes. Also, expansion is petrochemicals will be prioritized. Besides, ONGC plans to make investments in renewable energy sources with a target to create 5-10 gigawatts portfolio with a focus on offshore wind power.
Internationally, focus shifts to plays with volume in host regimes with a positive government-to-government relationship with India to secure stable energy long-term supplies, the annual report said.
ONGC said there was significant room for deriving operational synergies between HPCL and MRPL through integrated crude sourcing, centralized trading, capability, and infrastructure sharing. Expansion in petchem is based on the robust demand of outlook of 8-9 percent CAGR for the country as well as ONGC's significant presence in the market through its subsidiaries.