ONGC mulls buying out petrochemical project in West, launching IPO

ONGC Petro additions Ltd (OPaL), majority-owned by ONGC, is primarily a polymer manufacturer, a chemical compound used in everything from textiles to plastics and packaging. “We are looking at various options. Our first preference is to convert OPaL into a subsidiary by converting share warrants and debenture into equity if we don’t get a strategic partner,” Subhash Kumar, ONGC’s director of finance said. “Another option is to merge OPaL with ONGC.”

ONGC will decide by the end of its fiscal year on whether to make OPaL a subsidiary, he said. “After making it a subsidiary, it will take another two years to list the company,” Kumar said. ONGC has long tried to bring in a strategic partner in the petrochemical project but failed to strike a deal so far.

Reuters reported last year that Saudi Basic Industries Corp (SABIC), world’s no. 4 petrochemical company, had shown interest in buying about half of the project. SABIC’s Kuwait Petroleum Corp had also shown interest in buying a stake.

ONGC will invest more than Rs 13,000 crore in exploring oil and gas by drilling over 220 wells across Assam in the next five years. The company said in a statement that it has signed an MoU with the Assam government for enhancing its exploration and production activities in the state. This investment is being made for drilling more than 220 oil and gas wells across the state, it said.