Indian Oil Corporation and ONGC Lead State-Run Oil Companies in Capital Expenditure
In the first quarter of this financial year, Indian Oil Corporation and ONGC took the lead among state-run oil companies in capital expenditure in India. Indian Oil Corporation spent about Rs 85 billion, while ONGC allocated Rs 80 billion towards various projects. These figures represent approximately 27% and 26% of their respective annual spending budgets.
State-run oil companies in India collectively have a capex target of Rs 11,850 billion by 2024-25. In the April-June quarter, they managed to utilize about 22% of their annual target, with a total expenditure of Rs 265 billion. This data comes from the petroleum and natural gas ministry, giving us insights into the spending trends of these companies.
Lower Spending Rates Among Other State Oil Firms
While Indian Oil Corporation and ONGC outpaced the average spending rate among state-run oil companies, the remaining firms displayed slower expenditure rates. Hindustan Petroleum Corporation, GAIL, Oil India, and Bharat Petroleum Corporation reported spending rates of 21%, 19%, 18%, and 12% respectively. Consequently, their expenditure contributed to lowering the overall average for state oil firms.
Investments in Diverse Projects
Refiners like Indian Oil, Hindustan Petroleum, and Bharat Petroleum are undertaking multiple projects to enhance their infrastructure and contribute to different sectors. These initiatives include refinery expansions, petrochemical and biofuel plants, pipelines, depots, and natural gas distribution infrastructure. This comprehensive approach ensures growth and improvement across various domains simultaneously.
Hindustan Petroleum’s Greenfield Refinery in Barmer
Hindustan Petroleum is directing a significant portion of its investment towards a greenfield refinery project in Barmer. Initially estimated to require a certain budget, this project has encountered substantial cost escalations. Despite the challenges, Hindustan Petroleum remains committed to realizing its vision for this new refinery facility.
ONGC and Oil India Focus on Exploration and Production
ONGC and Oil India primarily allocate their expenditures towards exploration and production activities. These endeavors underscore their commitment to discovering and extracting oil and gas resources in India. Such focused investments play a vital role in ensuring the nation’s energy security and meeting its domestic requirements.
Optimizing Capital Expenditure for Future Growth
With the spending rates provided by these state-run oil companies, it is evident that they are actively channeling their resources towards capital expenditure projects that contribute to the growth and development of the sector. By optimizing their investments and implementing strategic plans, the companies aim to achieve their long-term goals and meet the increasing demands of India’s energy landscape.
As the financial year progresses, it will be interesting to monitor the capital expenditure trends of these state-run oil companies and assess their steady progress towards achieving their ambitious targets.
