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Informist, Monday, Aug. 31, 2026

NEW DELHI – Oil and Natural Gas Corp. Ltd. is close to finalising its oil trading business and may start it by the end of the financial year 2026-27 (Apr-Mar), Chairman A.K. Singh told reporters Monday. "Ninety-five per cent of the work is done, we are waiting for one or two boxes to tick," he said, referring to a final decision on a partner for the joint venture and the location.

"Partner is yet to be decided, it will be decided by the board. Going by the current trend, we have in mind (selecting a location) either in Dubai or Singapore," Singh said. ONGC had earlier announced plans to establish a petrochemicals trading joint venture by consolidating crude oil purchases by its group refiners with the crude oil produced by its overseas subsidiary ONGC Videsh Ltd. It was seeking an international partner with expertise in the trading business. This joint venture could trade around 50 million tonnes of crude oil, refined fuels, and gas annually, he said. Including purchase and sales, it would hit 100 million tonnes, along with third party trade. 

The Centre has asked ONGC to build a strategic petroleum reserve with a capacity of 1.75 million tonnes in Mangaluru. "There is already a land parcel for which all the work was done earlier," Singh said. The construction of this reserve is expected to commence soon.

NEW WELLS

The state-run upstream energy company currently earns majority of its revenues from the oil business, while generating a significant chunk through the gas business. The company is increasingly pivoting more towards gas revenues.

In FY26, revenue share from the gas business increased to 27% from 25%. Around 17% of its gas production comes through new-well gas. "Gas today is a more valuable commodity than oil. But in our case, most of the gas comes from nomination fields and gradually, every year, a nominal field gas decline is compensated by new wells," Singh said.

Nomination gas, which dominates ONGC's gas pie, comes from legacy fields. New-well gas is gas drilled using modern technology in newer wells and provides higher margins for gas companies. ONGC now hopes that in around 5-7 years, all of its gas will come from new wells. 

Monday, shares of ONGC closed at INR 231.80 apiece on the National Stock Exchange, 0.2% lower than Friday.  End

Reported by Anand JC

Edited by Shubhayan Bhattacharya

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