ONGC eyes 15% cost reduction to address lower oil price regime

Oil and Natural Gas Company (ONGC) is seeking to trim 15% costs organisation-wide via varied optimisation measures, Director for Production Pankaj Kumar told reporters successful New Delhi. Mr. Kumar enumerated superior areas of absorption would entail addressing logistical costs alongside enhancing ratio and task execution. The state-owned explorer expects lipid prices to stay betwixt $60-65/barrel for the adjacent two-three years, barring “few ups and downs”, and aspires to hole itself accordingly. The measures would look to optimise some operational costs and superior expenditures, which totals to approx. ₹60,000 crore, thus, translating to savings of astir ₹9,300 crore.

Increasing ratio

Mr. Kumar underlined that logistics was among the “bigger components” of costs which extends to some drilling arsenic good arsenic aboveground operations. Listing measures successful the realm, among different things, the manager for accumulation stated that ONGC would beryllium peculiarly looking to standard the Pipavav Supply Base successful Gujarat.

“Almost 20% of the sailing volition determination to Pipavav, crushed being the full of Tapti Daman [block] country and the North of Mumbai [block] is person to the Pipavav base,” helium explained, adding, “The turnaround clip becomes faster, the vas takes little clip and we volition prevention fuel. Thus, we volition beryllium capable to amended our efficiency.” Mr. Kumar stated that ONGC would besides look to research placing fractional their sailings done Pipavav proviso base.

The institution expects scaling up astatine the basal would assistance augur much than ₹1,000 crore successful savings.

Cost of execution

The elder ONGC enforcement stated that the state-owned explorer besides worked to change tangible aspects of drilling. According to him, this resulted successful outgo benefits of “about 25%”. In presumption of task execution, Mr Kumar stated the institution besides altered its strategy successful the offshore area. Offshore operations are mostly much costly than onshore cognition owing to precocious engineering and logistical costs, among different things. Poignant to besides note, successful a broader context, ONGC has besides endowed absorption connected addressing diminution successful accumulation from their mature fields.

Separately, reflecting connected a prioritised attack going forward, Mr Kumar stated, “ONGC drilled immoderate 578 rigs past year. When we analysed those rigs, we besides deliberated if each the wells are economically bully oregon not. We thought wherefore don’t we prioritise [accordingly].”

Green vigor propulsion

In effect to a query from The Hindu about expanding renewable vigor to undercut geopolitical currents, Mr. Kumar said ONGC would beryllium looking astatine in-house enlargement alongside acquisitions. The institution aspires to person 10GW of renewable capableness by 2030.