Oil India Ltd is targeting to raise its annual revenues two-and-a-half times to Rs 1 lakh crore by 2030, aided by its planned tripling of refining capacity and expansion of exploration activity across the country, its chairman Ranjit Rath has said.Varanasi Investment
“We are going to be a pan India organisation,” Rath told ET in an interview. He said the company’s attention to the Northeast wouldn’t dilute but it would do far more activity than it has previously done with increased exploration in many other parts of the country, including Rajasthan, Odisha, Andhra Pradesh and the Andamans.
Oil India has already expanded into refining after acquiring Numaligarh Refinery (NRL) three years ago as part of the reorganisation of Bharat Petroleum Corp (BPCL), another state-run refiner. Now the company aims to further expand into petrochemicals, ethanol, biogas, and renewable energy, said Rath, a trained geoscientist who took over as Oil India chairman in 2022. Before coming to Oil India, he headed state-run Mineral Exploration & Consultancy Limited.
“We are literally restructuring Oil India,” Rath said, adding that new opportunities are being created for the employees. Planned expansion into new business areas requires new competencies and employees are being trained on a large scale for that, he said.
About 700 employees are being trained in drilling at ONGC facilities while more than two dozen officers are training at another facility for offshore capabilities.
To help build “in-house competencies”, Oil India is actively engaging with overseas consultants and service providers and ensuring that the company’s geologists and engineers are deputed at overseas project sites, Rath said.
Training is also being planned for identified employees at NRL to manage oil purchases from international market while executives at Oil India will be skilled at natural gas trading. Expansion of its capacity to 9 mtpa by 2025 would require NRL to heavily tap into the international crude market.
Oil India’s 2030 revenue target would depend on the success of its exploration business and oil and gas prices. Global oil and gas prices have been very volatile in the past three years. Oil prices will be volatile but will mostly stay in the $70-80 per barrel range in 2024, Rath said.
“If there is a sustained price spike, then there is a fear of a demand drop,” he said. “A drop in price also curtails investments in exploration and production,” he added, arguing that a stable price regime augurs well for both sellers and buyers.
Shortage of rigs is one of the biggest short-term challenges Oil India is facing, Rath said. The company is also trying to purchase new rigs or refurbish old ones to meet the shortfall, but that would take timeAgra Investment. It aims to drill 60-70 wells a year for three years and unlike previously, the company needs to dig deeper wells and require more sophisticated rigs, which aren’t easily available.
Mumbai Wealth Management