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2h ago

ONGC Plans 15% Cost Cuts, Trading JV as It Banks on $60–$65 Oil

The producer seeks to protect margins through a 15% cost‑reduction drive alongside a new trading venture targeting $1 billion in profit.

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Overview

  • ONGC now assumes crude will average $60–$65 per barrel over the next two to three years and is recalibrating strategy for that range.
  • A dedicated cost council targets savings of about Rs 4,000 crore in FY2025-26 and roughly Rs 9,000 crore by 2026-27, with current oil production costs near $45 per barrel.
  • The company is negotiating with four international players to form a trading joint venture expected before fiscal year‑end, aiming to handle up to 90 million tonnes a year and generate around $1 billion in annual profit within two to three years.
  • ONGC has committed $400 million for Mumbai High redevelopment Phase 1 with BP, split the field into six hubs, and is planning about 100 new wells in FY2028–FY2029 while projecting a 44% rise in oil output and an 89% gain in gas over the next decade.
  • More than 20 efficiency initiatives worth over ₹4,300 crore are underway, with BP providing technical support on Mumbai High and as a subject matter expert for KG 98/2 diagnostics.