ONGC eyes 15% cost reduction to address lower oil price regime

Oil and Natural Gas Company (ONGC) is in search of to scale back 15% prices organisation-wide by way of different optimisation measures, Director for Production Pankaj Kumar instructed reporters in New Delhi. Mr. Kumar enumerated main areas of focus would entail addressing logistical prices alongside enhancing effectivity and challenge execution. The state-owned explorer expects oil costs to stay between $60-65/barrel for the following two-three years, barring “few ups and downs”, and aspires to put together itself accordingly. The measures would look to optimise each operational prices and capital expenditures, which totals to approx. ₹60,000 crore, thus, translating to financial savings of about ₹9,300 crore.

Increasing effectivity

Mr. Kumar underlined that logistics was among the many “bigger components” of prices which extends to each drilling in addition to floor operations. Listing measures within the realm, amongst different issues, the director for manufacturing acknowledged that ONGC could be notably wanting to scale the Pipavav Supply Base in Gujarat.

“Almost 20% of the sailing will move to Pipavav, reason being the whole of Tapti Daman [block] area and the North of Mumbai [block] is closer to the Pipavav base,” he defined, including, “The turnaround time becomes faster, the vessel takes less time and we will save fuel. Thus, we will be able to improve our efficiency.” Mr. Kumar acknowledged that ONGC would additionally look to discover putting half their sailings by Pipavav provide base.

The firm expects scaling up on the base would assist augur greater than ₹1,000 crore in financial savings.

Cost of execution

The senior ONGC government acknowledged that the state-owned explorer additionally labored to alter tangible facets of drilling. According to him, this resulted in cost advantages of “about 25%”. In phrases of challenge execution, Mr Kumar acknowledged the corporate additionally altered its technique within the offshore space. Offshore operations are usually dearer than onshore operation owing to superior engineering and logistical prices, amongst different issues. Poignant to additionally be aware, in a broader context, ONGC has additionally endowed deal with addressing decline in manufacturing from their mature fields.

Separately, reflecting on a prioritised method going ahead, Mr Kumar acknowledged, “ONGC drilled some 578 rigs last year. When we analysed those rigs, we also deliberated if all the wells are economically good or not. We thought why don’t we prioritise [accordingly].”

Green vitality push

In response to a question from The Hindu about increasing renewable vitality to undercut geopolitical currents, Mr. Kumar stated ONGC could be taking a look at in-house growth alongside acquisitions. The firm aspires to possess 10GW of renewable capability by 2030.