Indian Oil Majors to Invest Rs 1.2 Lakh Crore in Next Financial Year
New Delhi: State-owned oil & gas majors, including Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) will invest about Rs 1.2 lakh crore in the coming fiscal starting April 1 in oil and gas exploration, refineries, petrochemicals and laying pipelines to meet the needs of the world's fastest-growing energy consuming nation. However, the investment proposed in 2024-25 is 5 per cent higher than Rs 1.12 lakh crore spent by the state-owned oil firms in the current fiscal year that ends on March 31, according to Budget 2024-25 documents.
ONGC has a planned capital spending of Rs 30,800 crore in the next financial year. In finding new reserves of oil and gas and bringing to production discoveries the company has already made, this expenditure is slightly higher than Rs 30,500 crore capex in 2023-24 fiscal (April 2023 to March 2024). It is also developing discoveries on both east and west coasts of the country. However, the top oil producer's overseas arm, ONGC Videsh Ltd (OVL) will also invest 68 per cent more at Rs 5,580 crore in 2024-25 in oil and gas operations abroad when compared with the previous fiscal.
Similarly, the country's top oil refiner, IOC will be the top spender with an investment outlay of Rs 30,910 crore, with the bulk of it in expansion and upgrade of its seven refineries that produce fuel. This outlay also includes Rs 3,299 crore in the petrochemical business and another Rs 236.48 crore in the small oil and gas exploration portfolio it has. The investment planned by IOC is less than Rs 31,254 crore spending in the current 2023-24 fiscal.
Besides, Bharat Petroleum Corp Ltd (BPCL) has proposed a 30 per cent higher capital spending at Rs 13,000 crore, two-thirds of which will be in its core refining business. Also, gas utility GAIL India Ltd will see its planned investment decline to over Rs 8,000 crore in 2024-25 from Rs 9,750 crore in the previous fiscal as most of its pipeline grid expansion projects are nearing completion.
Also, Hindustan Petroleum Corp Ltd (HPCL), a subsidiary of ONGC, will invest Rs 12,500 crore in FY25, marginally higher than Rs 12,000 crore in the previous year, while Oil India Ltd, the nation's second-largest oil producer, will invest Rs 6,880 crore next year as compared to Rs 5,648 crore in the current fiscal.
Union finance minister Nirmala Sitharaman had on February 1 in her interim budget for 2024-25 ahead of general elections, however, put off capital support to oil marketing companies — IOC, BPCL and HPCL — to the next fiscal year. But in her last year budget presentation (2023-24), she had announced equity infusion of Rs 30,000 crore in IOC, BPCL and HPCL to support their energy transition plans. Alongside, she had also proposed Rs 5,000 crore for buying crude oil to fill strategic underground storages at Mangalore in Karnataka and Visakhapatnam in Andhra Pradesh that India has built to guard against any supply disruptions.
