ONGC subsidiary OPaL, reports first ever profits.
- ByStartupStory | December 20, 2021
India’s top oil and gas producer ONGC has scripted a sharp turnaround in fortunes of its subsidiaries with its petrochemical unit reporting its first ever profit, a top official said.
ONGC Petro additions Ltd (OPaL), the venture ONGC floated for downward integration and expansion into petrochemical field by utilizing its naphtha stream from Hazira and Uran and C2+ components from imported LNG, has been steadily seeing operational profit or EBITDA improvement since 2016-17 but the lopsided capital structure with high-debt servicing cost and high depreciation during the initial period of capitalisation led to incurring net losses.
“During the first half of the current fiscal (April to September), OPaL made a profit after tax of Rs 18 crore,” ONGC Chairman and Managing Director Subhash Kumar said. Kumar said as per ONGC 2040 Strategy, going forward 70 per cent revenue is expected from refinery and petrochemical business and 10 per cent profit will be contributed from non-oil and gas sector, and so the role of these non-E&P JVs will continue to play a crucial role in the Group.
ONGC holds 49.36 per cent stake in the 1.1 million tons per annum capacity OPaL, GAIL has 49.21 per cent and GSPC the remaining 1.43 per cent. The firm also single handedly backstopped Rs 7,778 crore CCDs and provided comfort letters amounting to Rs 9,500 crore for the loans, he said.
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