'ONGC scales down overseas investment'

By Staff
|
Google Oneindia News

Mumbai, June 9: The ability of three upstream oil-PSUs, ONGC, OIL and GAIL to invest abroad in new projects for achieving energy in the country has been impacted at least in the short-run as they have to bear a burden of Rs 24,000 crore giving most of their incremental revenues, Union Petroleum Secretary M S Srinivasan said here today.

Replying to a question at a press conference here, Mr Srinivasan said, ''ONGC's investment plans abroad will be impacted at least in the short-run.'' To a poser how short is the short-run, he implied at least the next two years.

Clarifying further in this context, the Petroleum Secretary said ONGC has plans to invest over US 7 billion dollars for acquisition of assets -- oil fields with proven reserves -- in the five-year time span. In the given situation, he indicated that ''investments by ONGC will now come down by about USD 1-1.5 billion, as a result of taking the hit due to under recoveries by oil-marketing PSUs.'' In the oil-industry parlance, under recovery is the difference between price chargeable as per approved formula and price actually recovered from the consumer net of taxes and duties.

For the current year, if present international oil prices continue without adjustment in domestic retail selling prices, the PSU oil marketing companies (OMCs) are likely to incur under recoveries of about Rs 73,500 crore. As against this, the combined networth of PSU OMCs was about Rs 41,500 crore.

In this context, the government will provide financial support through bonds of Rs 28,300 crore, while upstream oil-PSUs to pick up a tab of Rs 24,000 crore and downstream oil copanies to shoulder Rs 9,000 crore and consumers of petrol and diesel to shoulder about Rs 9,200 crore.

UNI

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