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State Oil cos plan capex of Rs 89k crore, 50% for E&P

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Source: The Economic Times
Monday, February 05, 2018

 NEW DELHI: State oil companies have planned a capital spending of Rs 89,000 crore, or $14 billion, in 2018-19, half of which will go into exploration and production. 


In the current fiscal, these companies had targeted an expenditure of Rs 87,400 crore, 70% of which has been spent in the first three quarters. 

The allocation of Rs 48,000 crore towards exploration and production in Budget 2018-19 is lower than Rs 53,960 crore planned for this year. Spending on refining and marketing would rise to Rs 35,800 crore from Rs 31,200 crore in 2017-18. Investment in petrochemicals would nearly double to Rs 3,952 crore next fiscal year from Rs 2,156 crore in the current year. 

Oil & Natural Gas Corp has planned the highest investment among all state oil firms, with a capex target of a little over Rs 32,000 crore in 2018-19. This would go into developing new oil and gas fields and enhancing production from existing fields. 

For the current year, its planned capex is about Rs37,200 crore, including a $1.2 billion payment for GSPC's stake in the KG Basin asset. ONGC's capex figure will get revised upward sharply after factoring in the Rs 37,000 crore purchase of government stake in HPCL. 

Overseas arm ONGC Videsh plans to spend Rs5,900 crore, about 8% lower than the current year's target. 
The second-highest investment among state oil firms is slated to come from Indian Oil, the country's largest refiner and fuel retailer. Its planned spending of Rs 22,860 crore is a fifth higher than the current year's target. 

HPCL's target of Rs 8,400 crore is also 18% higher than the current year's. BPCL's capex is planned to decline 5% to Rs7,400 crore next year. 

Indian Oil, HPCL and BPCL are investing heavily in expanding and upgrading refineries to produce more highgrade fuels. All petrol and diesel sold must meet BS-VI emission standards from April 2020. 

Gas transporter GAIL's spending is set to rise 40% to Rs4,700 crore in 2018-19 as it enhances investment to complete ongoing pipeline projects. 


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