Ad Here  
January
February
March
April
May
June
 
 
German envoy Steiner caps a language row ONGC to draw down on reserves to meet CAPEX needs Hunt for new finance secretary on... Aircraft lessors to get protection from defaulting airlines Fox Star Studios to tie-up with Bolly-wood and Kollywood Lanco to sell Australian acquisition Infosys not to cut prices Plans to double trade with Latin America How important is Modiís German visit... Canada screams over IT outsourcing to India Excise duty may halt the war in SUV market Airlines hit by service tax on lease Jet-Etihad Rs 2000 plus crore deal to be cleared Renault revving up small car launch Carlyle invests in Trehanís Medanta Medical Centre Urja Sangam in Delhi Singapore Airlines prefers Airbus Wal-Mart studying FDI norms post split with Bharti Latin America beckons India for investments Hyundai Grand i10 awaiting launch While MoTown is on a tailspin, the telecom sector is staging a rally Automobile sector in slump... Flipkart India in the red by Rs 280 crore SpiceJet in the news again GMR to raise US $ 250 mn thru QIP Trends point to a hung assembly Vodafone slapped with tax notice of Rs 3700 crore LANCO opens negotiations with buyers for Karnataka power plant TCS, Indiaís biggest block buster Vodafone to buy out minority shareholders TVS bullish on the two wheeler market? Smartphone prices may change Capital Notes Kolkata kisses goodbye to Ambi?
 
ONGC to draw down on reserves to meet CAPEX needs
It is probably for the first time in ten years that ONGC will be taking a loan for funding its domestic operations. ONGC is looking for some relief in the next fiscal when it expects gas prices to be revised upwards.

The Oil and Natural Gas Corporation (ONGC) will dip into its carefully accreted cash reserves to meet its capital expenditure needs for the remaining part of fiscal 2013-14 and fiscal 2014-15.

The upstream oil explorer faces tremendous challenges ahead ranging from decreasing yield from ageing fields in western offshore and to fund the subsidy burden the government inflicts on behalf of oil marketing companies. The cash rich company may have to resort to bank borrowings for funding its domestic operations.

Out of the cash reserves ONGC will dip into, a substantial part of Rs 5000 crore towards deficit financing and another Rs 4000 crore shouldering current liabilities. There is also the onus of acquiring a stake in the downstream refiner Indian Oil Corporation Ltd.

ONGC’ s cash reserves were over Rs 13,000 crore as of 31 March. The CAPEX plan of ONGC is estimated at over Rs 35,000 crore for the current year and Rs 36,000 crore for the next year. On government’s prodding, ONGC needs to pick up a 5 per cent stake in IndianOil, part of a disinvestment programme of the government to raise funds for the exchequer.

It is probably for the first time in ten years that ONGC will be taking a loan for funding its domestic operations. ONGC is looking for some relief in the next fiscal when it expects gas prices to be revised upwards. Domestic gas prices are set for a revision from 1 April this year. The anticipated hike of gas price to US $ 8 per million British thermal units (mmbtu) is a considerably big take for the explorer as current prices are ruling at US $ 3.75 per mmbtu and US $ 5.73 per mmbtu.

ONGC has managed to raise money for its subsidiaries ONGC Videsh Ltd (OVL) and Mangalore Refinery and Petrochemicals Ltd. But it still may go to banks to raise money to fund domestic operations, the source said.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com