Not A Right Time To List ONGC Videsh, Says ONGC’s Shashi Shanker
India’s biggest oil and gas producer is also planning to merge its two refining subsidiaries next year.
Oil & Natural Gas Corporation Ltd. has no plans to list its overseas subsidiary ONGC Videsh Ltd. anytime soon, the oil and gas explorer’s Chairman and Managing Director Shashi Shanker said.
“We had received a proposal from the government for the listing of OVL. We had responded to them saying that it is a good proposition but one of our prized acquisition in Mozambique is at final investment decision stage,” Shanker told BloombergQuint after the annual general meeting of the company. “Once we start getting revenue from there, then it will be a good time to list OVL so that we can get better realisation.”
The project, he said, will be commissioned by 2024. “We have made an investment of $4.5 billion to set up two LNG trains of 6.44 million tonnes each.”
In a regulatory filing earlier this year, the state-run oil explorer had said ONGC Videsh along with its Indian and foreign partners will invest $20 billion in building a gas liquefaction and export terminal in Mozambique to monetise the offshore natural gas reserves it had found.
The LNG project will be fed with nearly 100 million cubic feet of natural gas a day from the Golfinho-Atum fields in the Rovuma Basin, which are set to be developed as part of the Offshore Area 1 gas project.
The government, according to a report by The Economic Times, wanted to list ONGC Videsh Ltd. and the Department of Investment and Public Asset Management had recently written to the Ministry of Petroleum and Natural Gas. Though this has been done several times in the past but ONGC had resisted listing its subsidiary.
Shanker said that oil and gas output from OVL’s overseas properties rose to a record high of 14.83 million metric tonnes in financial year 2018-19. Turnover and profit after tax for the year stood at Rs 14,632 crore and Rs 1,682 crore as against Rs 10,418 crore and Rs 981 crore in FY18.
OVL is planning to relinquish at least six of its overseas assets during the current financial year, GS Chaturvedi, OVL’s managing director, told reporters at a press conference after the annual general meeting. This includes three blocks in Colombia (RC-9, RC-10, and GUA OFF-2) and one block each in Sudan, Namibia and Kazakhstan.
Chaturvedi said that Venezuela’s state oil firm Petroleos de Venezuela is yet to pay dividend dues to the tune of around $400 million to OVL. “We haven’t received the dues due to geopolitical tensions in Venezuela.” This dividend is of San Cristobal field, where OVL owns a 40 percent stake and the rest is with the Venezuelan firm.
India's biggest oil and gas producer is also planning to merge its two refining subsidiaries—Hindustan Petroleum Corporation Ltd. and Mangalore Refinery and Petrochemicals Ltd.—next year. “We have formed a committee to look into it and working on different options,” Shanker said.
ONGC completed acquisition of HPCL last year for Rs 36,915 crore. ONGC’s standalone debt stands at Rs 10,000 crore, a company executive told BloombergQuint on condition of anonymity.