ONGC seeks entry into downstream ventures from IOC

ONGC seeks entry into downstream ventures from IOC

New Delhi, Feb 23: Oil and Natural Gas Corporation (ONGC) today said that it would like to join the entire value chain of downstream activities with Indian Oil Corporation (IOC) including the refining and marketing activities.

The refining margins worldwide are shrinking and there would be no advantage for an exploration company like ONGC to enter this sector unless it gets marketing also, Bora said.

"I hope IOC would come up with a firm proposal on the issues we have said soon," he added.

The decision of both IOC and ONGC participating in each others ventures is part of the strategic alliance entered into between the two compaies early last year.

As part of the strategic alliance both IOC and ONGC hold 10 per cent equity in each other's company.

Besides, this the two companies are also working on along-term agreement under which ONGC would sell its entire about 27 million tonnes of crude to IOC in the post degregulated scenario thereby giving each other the most-favoured customer treatment.

ONGC and IOC have also given each other the first right of refusal and the marketing company is also planning to enter the exploration business along with ONGC in the domestic as well as internationally, sources said.

Stating that small refineries would not be economical, Bora said that ONGC would like to enter the refining sector if the projects are large.

"Talks are on with IOC on the issue of entering the marketing sector and I hope a final decision on this would be arrived at soon," Bora said.

Asked about ONGC's role in the future in the wake of depleting resoures, Bora said that the company was making all necessary efforts to acquire more data and information with regard to exploration in the deep water blocks.

"We have already drilled about three deep water wells in the eastern coast and one in the western coast," Bora said, adding the reserves in Cambay basin were estimated to the tune of 2,000 million tonnes while estimated reserves in the Bengal basin had come down from 800 million tonnes to 300 million tonnes.