ONGC to scale down overseas targets

Of the $7 billion it planned to invest in the next 3 years, it will have to cut $2 billion.

MUMBAI: Oil and Natural Gas Corporation (ONGC) will scale down by $2 billion  its plans to acquire oil and gas assets overseas, thanks to higher subsidy burdens on kerosene and LPG.

"The loss due to the sale of petroleum products at  rates  lower than their production costs will be partly covered through government bonds and partly by taking out a share of the profits made by the upstream companies," said MS Srinivasan, secretary, Union ministry of petroleum and natural gas.

ONGC had envisaged investing $7 billion in the next three years from which it will have to slash $2 billion. It invested $2.7 billion last year to acquire oil and gas assets abroad. India has got oil and gas assets in 15 countries and talks are on to acquire assets in 25 more countries.

International crude prices hit an all-time high of $71.13 per barrel whereas the industry recovers only $54.5 per barrel after the recent hike in petroleum prices. "The government is losing Rs 46,000 crore out of this difference in price and after the price increase it will gain only Rs 9,300 crore., " Srinivasan said.