ONGC suspends capex plans due to crude oil slump

The decision follows an investment review meeting called by Union Petroleum Minister Dharmendra Pradhan on Monday and a meeting of the company’s Board of Directors on Tuesday

ONGC has decided not to invest in new projects until crude oil prices recover and the realisation is enough to maintain its earlier capex plans, reports a financial newspaper. 

The decision follows an investment review meeting called by Union Petroleum Minister Dharmendra Pradhan on Monday and a meeting of the company’s Board of Directors on Tuesday.

ONGC won’t halt its ongoing exploration and development works, as it is getting the advantage of a fall in oil field services cost, according to the business daily.

The company's coveted deepwater block "KG-DWN-98/2" in the Krishna-Godavari Basin entails an investment of US$6-7 billion to pump out oil and gas by 2018.

ONGC's capex between FY11 and FY15 stood at INR 1.5 lakh crore. About 60% of these investments was used for maintaining the existing production infrastructure and explorations. 

Till November this year, the company's capex for FY16 has been Rs. 19,000 crore.

It had estimated capex of INR 36,249 crore in FY16 and Rs. 34,000-35,000 crore in FY17. These plans could be deferred until global crude oil prices recover, according to the newspaper.