Oil & Natural Gas Corp. (500312.BY) expects its output of crude oil
and gas to increase more than 5% next fiscal year from this year's projected
levels, a senior Indian government official with knowledge of the state-run
company's production targets said.
The company accounts for around 60% of
India
's oil
and gas output. ONGC's production has fallen in recent years because of a
natural decline in output from its main Mumbai High offshore field, which has
been in production for decades. It has also not been able to bring new major
fields into production.
India
imports about three quarters of the oil and gas it consumes and raising local
production is key for the country to reduce its import bill and narrow
current-account deficit. The government has chalked out plans to cut the
country's dependence on oil imports by half in next seven years and increasing
production at ONGC is part of that.
The company has invested billions of dollars in recent years to develop new
fields and wells.
ONGC expects to produce 28.73 million metric tons of crude oil in the next
fiscal year that begins April 1, 2014, compared with this year's projected
output of 27.24 million tons, said the official, who didn't want to be named.
Its natural gas output is expected to grow to 26.5 billion cubic meters from
the 25.19 billion cubic meters projected for this year, he said.
The company produced 26.13 million tons of crude and 25.34 billion cubic meters
of gas last fiscal year.
"This trend [production growth] should pick up...It's vital for our energy
security plans," the official said.
ONGC Exploration Director N.K. Verma didn't respond to phone calls. Its
spokesman didn't immediately comment.
Bhavesh Chauhan, a senior analyst at Mumbai-based Angel Broking Ltd., said
ONGC's targets are "ambitious."
"The company is heavily dependent on its ageing assets. The projections
sound encouraging, but are hard to believe given the declining trend in its oil
and gas output so far," he said. "So, I will wait and watch."