Petroleum Ministry Confirms ONGC To Commence Gas Production

The Oil and Natural Gas Corporation Limited (ONGC), founded by the Indian government on August 14, 1956, is a central public sector undertaking under the Ministry of Petroleum and Natural Gas. Headquartered in Delhi, ONGC is India’s largest government-owned oil and gas explorer and producer, responsible for approximately 70% of the country’s crude oil and 84% of its natural gas production.

ONGC to start gas production

State-controlled Oil and Natural Gas Corporation (ONGC) is set to commence gas production from its flagship deep-water project in the Krishna-Godavari (KG) basin block KG-DWN-98/2, announced Hardeep Singh Puri as he takes charge of the Ministry of Petroleum and Natural Gas. Puri highlighted the strong performance of public sector undertakings (PSUs) in the oil and gas sector, noting their significant contributions. In a strategic move to enhance its technological capabilities, ONGC has issued a tender seeking an international technology partner. This initiative underscores ONGC’s commitment to leveraging global expertise to optimize its deep-water project and boost India’s energy production.

Market Expectations from ONGC 

The analysts are expecting that a ramp-up in KG basin production in the third quarter of the current financial year and an increase in profitability will be key triggers. The street anticipates that policy continuity on pricing reforms post-elections should keep ONGC’s profitability elevated compared to its past averages. The market analysts expect that the recent decline in ONGC’s stock price appears overdone and see this as an appealing buying opportunity for investors in a market that has been highly volatile over the past couple of weeks.

Conclusion: The commencement of gas production from ONGC’s deep-water project in the Krishna-Godavari basin marks a significant milestone. This initiative is expected to enhance India’s energy output, showcasing ONGC’s capabilities and strategic focus on leveraging domestic resources to meet the country’s growing energy demands. The stock of ONGC Limited closed at Rs.273.55 a piece up by 5.56% from its previous day’s closing price.

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.