ONGC’s Energy Strategy 2040

India’s foremost Oil and Gas Exploration & Production (E&P) PSU, the Oil and Natural Gas Cooperation has set its target to double the oil and gas production from its domestic and foreign hydrocarbon reservoirs. It has named this plan the ONGC Energy Strategy 2040.

What is ONGC’s Energy Strategy 2040?

• As per the current chairman of ONGC, Shashi Shankar, ONGC aims to double the output of hydrocarbons from its domestic and foreign fields.
• While the domestic fields of ONGC are operated by the primary arm of ONGC, the foreign fields are operated by the ONGC Videsh Limited.
• The ONGC Energy Strategy aims to create ONGC into a diversified Energy Company with a strong contribution from its non-core E&P business. ONGC expects to treble its revenue and increase its market capitalization by at least 5 folds by 2040.
• It also aims to triple its refining capacity, currently represented by the Mangalore Refinery and its new acquisition, the refining PSU, HPCL.
• ONGC also plans to make significant investments in renewable energy to ensure that at least a stable energy generation portfolio of 5-10 GWs of energy is generated from renewable sources, mainly offshore wind power.
• ONGC also has plans to set up a long term venture fund corpus worth USD 1 billion to fund research in niche areas like clean energy, artificial intelligence (AI) or reservoir/field services technology using IoT.

Why is it necessary?

• Currently, the Indian Government is exerting a tremendous amount of pressure on the ONGC to reverse the fall it has observed in its hydrocarbon output from the depleting fields.
• This has motivated ONGC to invest heavily in existing fields to either arrest the domestic fall in production or look for newer sources of fuel overseas.

Current Hydrocarbon Scenario

India is one of the largest consumers of hydrocarbons. However, the lack of domestic sources in India has meant that India has to import over 80% of its domestic crude needs from abroad.

ONGC produces only 12-14% of Indian crude needs while the private player Vedanta produces another 4-5%.