Oil & Natural Gas Corp. (ONGC) expects its crude oil and natural gas output to increase substantially over the next few years as it brings new fields into production, Chairman Sudhir Vasudeva said at a news conference Tuesday, a day after he took over as head of the state-run explorer.
India's most profitable company expects its crude oil output to rise 14.6% to 28 million tons a year, or 560,000 barrels a day, by March 2014 and gas production to increase 58% to 36.5 billion cubic meters by March 2017.
ONGC produced 488,400 barrels a day of crude and 23.09 billion cubic meters of gas in the year through March 2011. ONGC has been fighting a decline in crude oil and gas output for the past few years as its main fields have been in production for decades and it hasn't been able to bring any new major field into production.
"Our first focus will be on our core activity, which is exploration," Vasudeva said. "We will revisit strategies of exploration."
ONGC is in the process of investing $3.2 billion as it aims to sustain production from mature fields by use of technology, its website showed.
The company is open to partnerships with overseas oil and gas majors in its oil and gas blocks as it seeks to ramp up output, Vasudeva said.
Reliance Industries Ltd., India's largest private sector explorer by sales, on Aug. 30 closed a deal with U.K.-based BP to sell a 30% stake in its 21 oil and gas exploration blocks in India.
Analysts expect ONGC to ink a similar deal as it needs deepwater exploration technology and to ease the risks of its domestic business.
"We are open to all sorts of partnerships--whether it is strategic or for technology," Vasudeva said.
ONGC is in talks with Italy's ENI and a local unit of the U.K.'s BG Group PLC to sell up to 30% of an oil block located on India's east coast, the Business Standard reported in June.
Asked about the federal government's plans to sell a 5% stake in the company, Vasudeva said it is for the government to decide.
The government, which holds a 74.14% stake in ONGC, the country's largest oil producer by output, last month deferred a stake sale plan without giving any reason.
"The market is behaving erratically. The government has to take a call," Vasudeva said.
Copyright (c) 2011 Dow Jones & Company, Inc.
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