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ONGC reveals $6.1bn debt plan
FINANCE & INDIA’S state-run Oil and Natural Gas Corp. been able to reduce debt by more than a third
INVESTMENT (ONGC) has said it is considering raising up in 2019-2020 to INR139.49bn ($1.87bn), COV-
to INR450bn ($6.1bn) worth of debt, following ID-19’s downward pressure on oil prices meant
recent reports that the developer would struggle it was going to struggle this year.
to finance its capital expenditure objectives. “We live in an era of sub-optimal oil prices
ONGC said on August 24 that its board and government-mandated natural gas prices
would meet on September 1 to consider raising that are way below the cost [of production],” one
debt via bank loans as well as foreign and domes- official was quoted as saying.
tic debt instruments. Beyond the financial pressures of the pan-
The company said in its stock exchange fil- demic, however, ONGC is also struggling to
ing that it would consider establishing and/ mitigate COVID-19’s impact on its day-to-day
or extending a European Medium Term operations.
Note (EMTN) programme up to INR350bn ONGC has had to evacuate 16 crew mem-
($4.71bn). The board will also decide on an addi- bers from one of its rigs in the western off-
tional loan of up to INR100bn ($1.35bn) lever- shore owing to an outbreak of infections
aged against its bank term deposits. at the facility, Times of India reported on
ONGC has reportedly been considering August 21, citing unnamed sources. ONGC
expanding its debt pile following the collapse in is understood to have halted operations of
international oil prices and the government’s cap Greatship Chitra after the crew members
on pricing of domestic natural gas production. tested positive for the virus more than a
PTI reported on August 10 that the company week ago. The facility is one of four hired
seeking to raise debt to fund its planned capital from a unit of Great Eastern Shipping,
expenditure budget for financial year 2020-2021. India’s largest privately owned shipping
The newswire cited unnamed company company. The state major has also report-
sources as saying that while the company had edly suspended rig payments.
IOC invests $47mn in Paradip
refinery’s MEG plant
FINANCE & STATE-RUN Indian Oil Corp. (IOC) has IOC awarded the engineering, procurement,
INVESTMENT invested INR3.46bn ($46.9mn) since the start construction and commissioning (EPCC) con-
of the financial year on its project to add a tract for the MEG facility to L&T Hydrocarbon
monoethylene glycol (MEG) plant to the Paradip Engineering (LTHE), a subsidiary of India’s
refinery in Odisha State. Larsen & Toubro.
Indian Minister of Petroleum and Natural Reuters reported last week that that IOC
Gas Dharmendra Pradhan revealed the invest- aimed to restart all units at the 300,000 barrel per
ment figures on August 26 during a progress day (bpd) Paradip refinery by August 22 after a
update for 25 major state-run petroleum pro- maintenance shutdown was extended for several
jects. The MEG plant, which will have a face- days owing to a labour shortage caused by the
plate capacity of 357,000 tonnes per year (tpy) COVID-19 pandemic.
when finished, is projected to cost INR56.54bn “Out of about 1,400 workers and supervisors
($765.8mn). mobilised for shutdown jobs from outside, less
IOC, which expects the plant to come online than 400 are there,” Jagatsinghpur District Col-
towards the end of 2021, reached a final invest- lector Sangram Keshari Mohapatra was quoted
ment decision (FID) on a INR138.05bn ($1.9bn) as saying. The district’s most senior official told
integrated para-xylene (PX) and purified tere- the newswire that two of the refinery’s nine main
phthalic acid (PTA) facility at the same refinery. units had been restarted.
The newest project is slated to come online by “[The] remaining seven are being started
early 2024. in sequence, as all are connected, and start-up
The refiner expects that Paradip’s ability to will complete over the next two days,” Moha-
produce both PTA and MEG will not only ben- patra added.
efit its upcoming 300,000 tpy textile yarn manu- An unnamed company executive was quoted
facturing project at Bhadrak, but will also boost as saying that some secondary units had come
the local polyester manufacturing industry. back online.
P6 www. NEWSBASE .com Week 34 27•August•2020
