Government has exempted state-owned ONGC and Oil India from payment of fuel subsidy in the third quarter ended December 31, as slump in oil prices dented their revenues.

As per a new fuel subsidy sharing formula approved last year, upstream firms Oil and Natural Gas Corp (ONGC) and OIL have to make good any revenue loss incurred by fuel retailers on selling kerosene through PDS and domestic LPG after taking into account the fixed subsidy provided by the government.

Despite crude oil price dipping to a 13-year low and explorers globally reducing investments, state-run ONGC has lined up a capital expenditure programme of Rs 29,507 crore for FY17, reports Siddhartha P Saikia in New Delhi.

Though this is sharply lower than its capex levels in recent years, the cut is milder than most analysts expected.

NEW DELHI: The oil price crash may turn out to be a lost opportunity for state-run Oil and Natural Gas Corporation, which may be forced to defer its plans to acquire overseas assets that are gradually turning cheaper, stifling the country's ambition to leverage low prices to enhance its energy security. The oil slump is hurting ONGC's income and cash flow. This may force the firm to borrow heavily, something it has avoided in the past, to fund its priority domestic projects, thereby squeezing financing prospects for overseas acquisitions.

Standard & Poor’s today affirmed its ratings on ONGC, saying it reflects the company’s strong competitive position and expectations of moderate financial ratios despite fall in oil and gas prices.

However, Oil and Natural Gas Corp’s standalone credit profile has been lowered to ‘a-‘ from ‘a’, which reflects S&P’s expectations of weaker financial ratios.

Rating agency Moody's today placed ONGC, ONGC Videsh and Oil India on review for downgrade as petroleum industry grapples with weaker fundamentals on sharp fall in oil prices.

A big oil prices has put oil exploration and production (E&P) companies and integrated oil companies world-over in a tight spot.

NEW DELHI: The steep fall in oil prices have helped reduce the cost of developing and maintaining oilfields by at least 40% but Oil and Natural Gas Corp (ONGC) is unable to gain from this. Reason: Lack of discretion.

Oil majors have deferred investments and cut costs, but ONGC, being a state firm, can't fire people or renegotiate contracts easily.

NEW DELHI: Buy when there's blood in the street. For ONGC Videsh, this advice from 18th century British nobleman Baron Rothschild - of the Rothschild banking family - still holds true.

At a time when depressed oil and commodities prices have left companies gasping, the overseas acquisition arm of state-run ONGC has made a killing by replacing a $1.7-billion loan with cheaper credit and longer payback time.

With a continuous fall in global crude oil prices, ONGC is reaping the benefits by awarding five offshore contracts at least 22% cheaper than the tender cost in 2015. The world’s biggest integrated energy companies, such Royal Dutch Shell, BP and Exxon Mobil, among others, are deferring and renegotiating drilling commitments, which is leading to the idling of rigs and services. This scenario offers an opportunity to ONGC to award development projects at discounted rates to boost output.

The government has waived customs duty on import of goods for producing oil and gas from 69 idle fields of state-owned ONGC and Oil India Ltd that will be auctioned this year. In a notification, the revenue department said ‘nil’ customs duty will apply to goods imported “in connection with petroleum operations undertaken under specified contracts under the Marginal Field Policy (MFP)”.

The Union Cabinet had on September 2 last year approved MFP to bring idle fields of ONGC and OIL to production at the earliest so as to augment domestic production of oil and gas.

NEW DELHI: Reliance Industries(RIL) has challenged the jurisdiction of a panel examining Oil and Natural Gas Corp's (ONGC) allegations that it pumped out gas from the state-run firm's field, and has argued that the dispute should be resolved by arbitration.

It has also challenged the oil ministry's decision to intervene in the dispute by setting up a committee, headed by Justice AP Shah.

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