Oil & Natural Gas Corp. (ONGC), India’s biggest explorer, will boost spending to increase output at its biggest field and pay a mid-year dividend of Rs18 a share.
The New Delhi-based company will spend an additional Rs25.5 billion ($645 million) on increasing production at its Mumbai High area off India’s west coast, Oil & Natural Gas said in an e-mailed statement.
The explorer’s board also approved the dividend payment amounting to Rs38.5 billion.
Oil & Natural Gas, which in October approved a $1.4 billion investment on the acreage, needs to increase output to retain its position as the largest supplier of crude oil and gas in India. Oil imports by India, Asia’s third-biggest oil consumer after China and Japan, are set to rise as refiners expand capacity to meet demand. India imports three-fourths of its oil requirement.
The Mumbai High region yields about 16 million tonnes of crude oil annually, or 320,000 barrels a day, which is more than 60 per cent of the company’s total output.
The explorer is investing in upgrading platforms and digging deeper wells and plans to replace pipelines as output from the ageing, nearly three-decade old, area declines.
Oil & Natural Gas’s spending, approved on Saturday, will go toward replacing a network of pipe-lines, the company said. The money will be spent over three years.
The board also approved spending Rs1.5 billion on the PY-3 field in the Cauvery basin, off the east coast. Oil & Natural Gas holds a 40 per cent stake in the area, and Hindustan Oil Exploration and Tata Petrodyne hold 21 per cent each.
Oil & Natural Gas plans to boost spending on developing new and existing fields by 20 per cent in the year that began April 1 to Rs180 billion from Rs150 billion the previous year, chairman R.S. Sharma said on April 16.