The Oil and Natural Gas Corporation (ONGC) aims to conclude merger of ONGC Mangalore Petrochemicals (OMPL) with Mangalore Refinery and Petrochemicals (MRPL) by June 2021.
Once the merger is complete it will work towards merger of MRPL with the Hindustan Petroleum Corporation (HPCL).
The company is moving in the direction of vertical integration. The first step will be the merger of OMPL with MRPL, followed by a merger of MRPL by HPCL.
ONGC may be slightly short of meeting Rs 35,000 crore capital expenditure target for FY21. This is also due to difficulties in movement of essential equipment from overseas following restrictions on movement during the pandemic.
Oil demand is likely to be 10 million barrel per day less in 2020, which the company expects to pick up again with containment of COVID-19. However, oil prices will remain an important determinant for the sector’s growth and investment prospects.
In FY20, the company posted a revenue of Rs 96,214 crore and earned a net profit of Rs 13,445 crore.
ONGC was also affected by low gas price. The current price of less than USD two per million BTU for domestically produced gas does not adequately remunerate the company.
The government is evaluating options of giving a minimum purchase price for domestically produced natural gas.
The company is now considering a strategic restructuring within the larger ONGC Group by 2025. One such ambitious project by the company is creating an Integrated Shared Service Centre.
The centre will remove overlapping roles and centralise functions that do not require full time deployment of manpower spread across geographies.
