NEW DELHI: State-run oil and gas explorer ONGC may miss its production targets for the current financial year as the pandemic impacted overall operations and resulted in force majeure declarations by suppliers.
The oil major’s crude oil production for FY21 is likely undershoot the company’s targets by 4 per cent at 22.35 million metric tonnes, while gas output will be lower by 10 per cent at 22.73 billion cubic metres, said a research note by Emkay Securities after an interaction with ONGC’s Director-Finance Subhash Kumar. For FY22, the respective crude oil and gas output targets are 22.92 mmt and 25 bcm.
“Gas was impacted by Covid-19 in Q1. The KG-DWN-98/2 project was impacted by international supply chain disruption due to Covid-19, resulting in force majeure declaration by suppliers. It would take some time to ramp up production,” said the note, adding that ONGC’s overseas operations unit OVL is expected
to see some production reduction, as well.
ONGC’s standalone capital expenditure target for the next 4-5 years comes in at around $4.5-5 billion annually, but this may vary depending on new discoveries.