Domestic crude production of Oil and Natural Gas Corporation Limited

(ONGC), country’s largest oil explorer,

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will be lower by 0.86 million

metric tonnes (MMT) against its targeted 25.76 MMT in current

financial year.

The company may produce 24.9 million metric tonnes (MMT) of crude oil

in the year ending March 31, less than the target of 25.76 MMT, said

Sudhir Vasudeva, director (offshore) of ONGC. The upstream firm

produced 25.37 MMT of crude during 2008-09.

“Our fields are maturing. New fields have not come on stream ... there

has been a delay,” Vasudeva added.

At the same time, ONGC’s overseas arm, ONGC Videsh Limited (OVL)

expects its output to be around 8.15 MMT in the current financial year

marking a dip in production vis-à-vis 8.78 MMT of oil and

oil-equivalent gas from its assets in 2008-09.

During 2010-11, output could be flat, said R S Sharma chairman and

managing director of ONGC. “We are experiencing declines in Sudan and

Russian Sakhalin fields. These declines will happen. So, we have to

look for growth from new acquisitions,” chairman added.

“We are finding it difficult to sustain production levels. Declines

are happening faster than anticipated,” Sharma said.

With increasing energy needs and decline in domestic production,

countries such as India and China are aggressively looking abroad for

oil, gas and coal supplies.

At present, only one-fifth of India’s total crude oil needs come from

domestic fields. It has imported crude worth of $56.92 billion during

the first nine months of the current financial year. This accounts for

nearly 30 per cent of the country’s total imports.

Government has decided to create an investment fund to aggressively

acquire foreign assets. As part of this larger plan, ONGC will invest $25-30 billion over the next ten years to buy and develop oil and gas assets overseas. The spending would be towards ONGC’s endeavour to

produce 20 MMT of oil and oil-equivalent gas per year by 2020.

The country’s largest profit making company has cash resources of

nearly $ three billion. “I am not happy to be a zero-debt company. We

have enough strength in our balance sheet to borrow and invest,”

Sharma said.