BW Real 500: ONGC Approach To Balance Sustainability While Ensuring Consumption

ONGC, India’s largest crude oil and natural gas company contributing around 71 per cent to India’s domestic production, has maintained its fourth position on the back of robust financial performance in FY23. Chairman A.K. Singh explained the highlights for FY23 in his address. Excerpts:

On the key financial milestones reached in 2022-23
During FY23, we attained the highest-ever standalone profit before tax (PBT) of Rs 50,395 crore as against Rs 41,040 crore (FY22) and profit after tax (PAT) of Rs 38,829 crore as against Rs 40,306 crore (FY22). The PAT would have been higher but we have made a provision of Rs 12,107 crore during Q4 of FY23 on account of disputed ST/GST on royalty as a prudent accounting measure. However, ONGC shall continue to contest such disputed matters before various forums. At the group level, we achieved an impressive revenue from operations of Rs 6,84,829 crore and profit after tax of Rs 32,777 crore.

On the key focus areas to sustain and boost robust future growth
For robust growth in future, we are focusing on three key areas: deepwater exploration, early monetisation through faster project execution and enhancing production through IOR/EOR techniques. We have continued our stable capex programme and invested over Rs 30,000 crore during FY23. In this period, five major projects with an investment of Rs 8,118 crore were completed. During FY23, five major projects have been approved with total cost of around Rs 13,500 crore with envisaged life cycle gain of 27.64 MMTOE of oil and gas. As on 31.03.23, there were 24-major projects under implementation with a total cost of around Rs 61,352 crore and envisaged lifecycle gain of ~94 MMTOE.

On the steps taken to reduce carbon emissions & opportunities in renewables
Recognising the importance of environmental, social and governance (ESG) aspects, we have achieved substantial progress in reducing emissions. Integrating sustainable practices into our operations have enabled us to lower our Scope-1 and Scope-2 emissions by 17 per cent in the last five years. In FY23, we reduced emissions by 2.66 per cent to 8.89 MMTCO2e, from 9.14 MMTCO2e in FY22. We have set goals to achieve Net Zero emissions for Scope-1 and Scope-2 by 2038. ONGC is also charting a roadmap for opportunities in renewable energy and low-carbon sectors. It is planning to scale up its renewable portfolio to 10 GW by 2030. We are committed to spending around Rs 1 trillion by the end of this decade on our multiple green initiatives. We are also actively exploring collaborations with leading players in the energy space on various low carbon energy opportunities including renewables, green hydrogen, green ammonia and other derivatives of green hydrogen.

On the steps taken to boost the exploration & production (E&P) business
In our core E&P business, we have significantly increased our efforts in the exploration and development of Indian sedimentary basins. India’s basins are underexplored and offer significant opportunities. Under our ‘Future Exploration Strategy’, ONGC has set up an ambitious target to bring 500,000 sq. km area under active exploration by 2025. A total of 809 LKM (line kilometre) of 2D and 13,696 SKM (square kilometre) of 3D seismic data has been acquired in FY23. A total of 70,000 LKM of state-of-art 2D high-fidelity broadband seismic data (API) was planned to be acquired in three sectors namely West Coast, East Coast and Andaman offshore which was subsequently revised to 82,353 LKM.