ONGC ups capex at Rs 15,550 crore in Q2

Oil and Natural Gas Corporation ( ONGC) has accelerated its capital expenditure, spending about Rs 15,550 crore in the second quarter of this financial year, nearly double its first-quarter spending and making up nearly 40% of all state-run oil companies' combined capex.

India's top oil and gas producer has a capex target of Rs 30,800 crore for this fiscal. The company spent Rs 23,550 crore in the six months to September, or a little more than three-fourths of its annual target, according to the petroleum and natural gas ministry data.

ONGC's capital spending mainly involves exploration and development of discoveries and redevelopment of certain fields to boost oil and gas output. The company has been struggling with its output for years and has faced delays in some projects. It missed its annual capex target several times in the past decade owing to various reasons, but this year it appears on course to reach its spending goal well before time.

At Rs 30,900 crore, Indian Oil has a similar annual capex target as ONGC. India's top refiner's spending this year, however, has been slower than ONGC's.



It has used up Rs 18,500 crore in the six months to September, including Rs 10,000 crore in the second quarter, on its refining, marketing and bioenergy expansion.

State-run oil companies together spent about Rs 67,000 crore in the first half of this fiscal, including Rs 40,000 crore in the second quarter, against an annual target of Rs 118,500 crore.

Hindustan Petroleum Corporation Ltd (HPCL) spent Rs 5,900 crore in April-September, including Rs 3,200 in the second quarter. It has an annual allocation of Rs 12,500 crore while Bharat Petroleum Corporation Ltd (BPCL) has a target of Rs 13,000 crore. BPCL spent Rs 5,500 crore in six months, including Rs 3,850 crore in the second quarter.

GAIL, the nation's top natural gas marketer and transporter, spent Rs 1,900 crore in the second quarter and Rs 3,450 crore in the first six months of the year.

State-run oil and gas companies usually spend more than ₹1 lakh crore in capex annually, with about 40-45% spent on upstream activities.

In the past decade, as domestic demand galloped, companies invested heavily in fuel upgradation projects, expansion of refining capacity, marketing depots, pipelines and natural gas distribution infrastructure.