ONGC Receives Government Approval for Significant Investment in OPaL

The Government of India has approved Oil and Natural Gas Corporation Limited (ONGC) ‘s investment in ONGC Petro Additions Limited (OPaL). This strategic move will strengthen ONGC’s presence in the petrochemical sector and provide OPaL with the necessary capital for growth.

The government has sanctioned an additional equity capital infusion of ₹10,501 crore into OPaL. Additionally, the conversion of back-stopped Compulsorily Convertible Debentures (CCDs) worth ₹7,778 crore, along with a balance payment of ₹86 crore, will bring the total investment to ₹18,365 crore.

This significant investment will elevate OPaL’s status to a subsidiary of ONGC, with a commanding 95.69% equity stake. This strategic alignment will provide OPaL with the necessary support and resources to expand its operations and contribute to the growth of the petrochemical industry in India.

Furthermore, the government has permitted the allocation of 50% of the annual gas production from new wells or well interventions in ONGC’s nomination fields to OPaL. This allocation will ensure a stable supply of natural gas at a competitive price, supporting OPaL’s operations and reducing its reliance on external sources.

This approval is a positive development for both ONGC and OPaL, as it strengthens their strategic partnership and positions OPaL for future growth. The infusion of capital and access to natural gas resources will enable OPaL to enhance its operational capabilities and contribute to India’s petrochemical sector.

About ONGC Ltd

Established in 1956, Oil and Natural Gas Corporation is the largest crude oil and natural gas Company in India, contributing around 71% to Indian domestic production.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.