India State Oil Firms May Invest $15 Billion Next Year

By SUNIL RAGHU AND RAKESH SHARMA
NEW DELHI -- India's state-run oil and gas companies plan to raise their total investment by about a fifth in the next financial year to raise crude output, expand refineries and produce cleaner fuels, a senior government official said Friday.
The companies are likely to end the current fiscal year through March with a total investment of 580.95 billion rupees and plan to spend 694.58 billion rupees ($15 billion) next year, the official, who didn't wish to be identified, told Dow Jones Newswires.
Indian energy companies are increasing investment to meet rising demand for fuels in the world's second-fastest growing major economy. India's top policy think tank, the Planning Commission, has forecast the economy to grow at 9% between April 2007 and March 2012.
The federal government aims to raise spending in the sector to assure energy security through higher local output and investment in oil equity abroad. The South Asian nation currently imports more than three-fourths of its crude oil needs.
Oil & Natural Gas Corp., India's largest explorer, is likely to raise capital expenditure next year by about 7% to 265.23 billion rupees as it speeds up drilling at exploratory blocks, including the Cauvery and western offshore basins, the official said.
ONGC--which contributed about three quarters of India's crude oil output and two-thirds of natural gas production in the last fiscal year--hasn't kept up with output targets as its fields are ageing and it hasn't brought any new blocks into production for many years.
The company had planned to invest 208.68 billion rupees this financial year, which is now estimated at 247.20 billion rupees due to an increase in exploratory targets, higher rig charter rates and a rise in offshore drilling wells for marginal fields, the official said.
ONGC's overseas investment arm, ONGC Videsh Ltd., will step up spending by 23% next fiscal year to 86.63 billion rupees on its assets in Nigeria, Russia's Sakhalin, Sudan, Vietnam, Myanmar and Brazil.
OVL produced 8.77 million metric tons oil and oil equivalent gas in the last financial year. It has set a target to produce 20 million metric tons a year of oil and oil equivalent gas by 2020.
Oil India Ltd., the nation's second-largest oil producer, expects to invest 44.65 billion rupees in the next fiscal year, up 88%. It has set aside 20 billion rupees to acquire overseas assets.
Indian Oil Corp. plans to spend INR128.25 billion in the next fiscal year, up 11% on year. The country's largest listed company by revenue aims to expand and upgrade refineries, lay crude and product pipelines and start new projects.
Indian Oil's other two state-run rivals--Hindustan Petroleum Corp. and Bharat Petroleum Corp. --plan to spend 39.24 billion rupees and 30.22 billion rupees, respectively. HPCL's investment will go up by 79% as it aims to complete its projects to supply fuels that meet tighter emission standards.
BPCL's investment will fall by 18% due to lesser outlay on projects to supply clean fuels which are nearing completion.
Gas transmission company GAIL India Ltd. will raise investment by 31% to 55.10 billion rupees as it speeds up work on various pipeline projects, the official said.