PSUs to invest Rs 1.2 lakh crore in energy push

Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOCL), and other oil public sector undertakings (PSUs) are gearing up for substantial investments amounting to approximately Rs 1.2 lakh crore in the upcoming fiscal year, commencing in April 2025. This financial commitment is earmarked for diverse areas such as oil and gas exploration, refinery enhancements, petrochemical advancements, and pipeline expansions, aligning with the escalating energy demands of the nation.

The proposed investment for the fiscal year 2024-25 exhibits a 5% increase compared to the Rs 1.12 lakh crore expended by these oil firms in the current fiscal year. ONGC, in particular, outlines a planned capital spending of Rs 30,800 crore for the next fiscal year. This allocation is directed towards discovering new reserves of oil and gas, as well as bringing to fruition previously identified discoveries, slightly surpassing the Rs 30,500 crore capital expenditure in the fiscal year 2023-24. Notably, ONGC is actively developing discoveries along both the east and west coasts of the country.

The overseas arm of ONGC, ONGC Videsh (OVL), is set to escalate its investment by 68%, allocating Rs 5,580 crore in 2024-25 for oil and gas operations abroad, compared to the previous fiscal year.

IOCL, a prominent oil refiner, leads the investment forefront with an outlay of Rs 30,910 crore. The majority of this investment will be channeled into the expansion and upgrading of its seven refineries dedicated to fuel production. Additionally, this investment includes Rs 3,299 crore for the petrochemical business and an additional Rs 236.48 crore for small-scale oil and gas exploration ventures.

While IOCL's planned investment is marginally lower than the Rs 31,254 crore spent in the current fiscal year, Bharat Petroleum Corporation (BPCL) has proposed a 30% increase in capital spending, reaching Rs 13,000 crore. Two-thirds of this allocation will be directed towards the core refining business. Concurrently, GAIL India, a gas utility, anticipates a decline in planned investment to over Rs 8,000 crore in 2024-25, as several of its pipeline grid expansion projects are nearing completion, compared to Rs 9,750 crore in the previous fiscal year.

Hindustan Petroleum Corporation (HPCL), a subsidiary of ONGC, is set to invest Rs 12,500 crore in FY25, a marginal increase from the Rs 12,000 crore invested in the previous year. Oil India also reveals plans to invest Rs 6,880 crore in the coming fiscal year, in contrast to Rs 5,648 crore in the current fiscal year.

News by Rahul Yelligetti