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A look at ONGC-VII - Views on News from Equitymaster
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A look at ONGC-VII
Nov 5, 2007

In the previous articles we profiled the upstream and downstream assets of ONGC. In this article, we shall profile the non-hydrocarbon assets and important financial assets of the company. Non-hydrocarbon assets

ONGC Tripura Power Company Pvt. Ltd. (OTPC) ONGC is setting up a mega 1,100 MW gas based power plant at Palatana in Tripura to monetise its idle gas resources in the state of Tripura. The project also has a 400 KV transmission line uplinking the power plant with the grid at Bongaigaon over a distance of around 680 Kms. The estimated cost of the generation project is Rs 29 bn while the transmission project will cost Rs 19 bn.

Dahej SEZ Ltd. (DSL)
ONGC has formed a joint venture company under public private partnership with the government of Gujarat to establish and develop necessary infrastructure facilities for a multi-product SEZ within a land of 1,717 hectares. ONGC has 23% stake while the Gujarat Industrial Development Corporation (GIDC) has 26% stake. ONGC is currently engaged in implementing its C2-C3 extraction project, which will be located within this SEZ.

Mangalore SEZ Ltd. (MSL)
Large petroleum and petrochemicals based projects are being planned at Mangalore in order to provide synergy with MRPL. ONGC decided to associate with a SEZ contemplated at Mangalore in order to optimise the capital cost during the construction of the project and subsequently promote sale of petrochemical intermediates. ONGC envisages locating its upcoming Aromatics Complex, and other LNG based projects within this SEZ. The SEZ is an SPV with Karnataka Industrial Areas Development Board (23% stake), Karnataka Chambers of Commerce and Industry (KCCL), IL & FS (combined stake 51%) and ONGC (26%).

Kakinada SEZ Ltd. (KSEZ)
Kakinada SEZ Ltd. (KSEZ) was incorporated in FY06 with an equity participation of 26% by MRPL, 26% by IL&FS, 45% by KSPL and 3% by APIIC. KSEZ will be spread over 10,500 acres. It will have an exclusive Rs 20 bn deep-water port for importing and exporting petroleum, biotech, agricultural and other products. Rs 12.50 bn will be spent on the first phase of the project that is expected to be complete by 2008. The remaining Rs 7.5 bn will go into the second phase of the three-year project. Companies that set up their units in the KSEZ will use the port facility.

Pawan Hans Helicopters Ltd. (PHHL)
ONGC has 22% equity in PHHL. PHHL was incorporated in 1985 and provides helicopter services to the Oil Sector for its offshore exploration operations, services in remote areas as well as for promotion of tourism. It has a fleet of 33 helicopters. PHHL is the only helicopter operator with ISO 9001:2000 certification in Asia for its entire gamut of business activities. It earned a provisional net profit of Rs. 490 m for FY07.

Financial assets
Equity investments in Indian Oil Corporation and GAIL.
ONGC holds 106 m * shares of the Indian Oil Corporation worth Rs 53 bn. The company also holds 41 m* shares of GAIL worth Rs 16 bn.
* As of 31/03/07.

Government of India oil bonds.
ONGC holds Government of India bonds worth Rs 18 bn.*
* As of 31/03/07.

Fixed deposits with banks.
ONGC holds Rs 146 bn* in fixed deposits with banks.
* As of 31/03/07.

In the next article, we shall profile the liability side of the company and ask from where does ONGC source its money?

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