ONGC’s Bold Move: ₹1 Trillion Investment to Slash Carbon Emissions
Oil and Natural Gas Corporation (ONGC) will invest $1 trillion in green initiatives by 2030 to reduce its carbon footprint as part of a larger effort to achieve net-zero emissions by 2038.
Arun Kumar Singh, chairman, and managing director of ONGC, told reporters on Monday that the oil explorer has set an ambitious net-zero target, aiming to reduce both Scope 1 and Scope 2 emissions. Scope 1 emissions are those that an organization directly controls, such as fuel used in operations or vehicle operations, whereas Scope 2 emissions are those that an organization purchases, such as electricity.
According to the presentation, ONGC has a renewable energy portfolio of 189 megawatts (MW) as of FY23, with plans to increase it to 10 gigatonnes (GW) by 2030. The energy company intends to expand into offshore wind and green ammonia production, with a capacity of 1 million tonnes per annum (mtpa) by the same year.
“The investments will be in the order of ₹1 trillion,” Singh said.
The company has signed a memorandum of understanding for a 5GW renewable energy project in Rajasthan and is looking for a similar project.
With its net zero targets in place, ONGC has joined the other oil and gas companies in setting the key climate target, including Indian Oil, Bharat Petroleum Corp. Ltd (BPCL), and Oil India Ltd.
Indian Oil Corp. intends to reach net zero by 2046, while BPCL and Oil India intend to do so by 2040.
ONGC aspires to be a “truly integrated oil and gas company,” with equal emphasis on crude production, refining, and marketing.
According to the presentation, the company has significant plans for the petrochemical segment.
In addition to expanding its green energy portfolio, the company plans to expand its exploration and production (E&P) activities. In FY23, the oil explorer produced 19.58 million tonnes (mt) of oil, up from 19.55 mt the previous year. According to the company, its oil output will increase to 21.26 mt in FY24 and 22.39 mt in FY26.
Its natural gas output is expected to rise from 20.64 billion cubic meters (bcm) in FY23 to 23.62 billion cubic meters (bcm) in FY24, with a peak of 27.16 billion cubic meters (bcm) in FY26.
ONGC currently has 162,000 square kilometers of acreage, which it hopes to increase to 500,000 square kilometers by acquiring 100,000 square kilometers per year, with an annual expenditure of 10,000 crores on exploration.
On its international operations, which are managed by ONGC Videsh Ltd, the company stated that operations at the Mozambique gas project, in which Indian oil and gas companies own around 30%, are on track to resume.
ONGC stated that the situation at the project site is improving after operations were halted due to security concerns.
Since April 2021, the $20 billion ‘Offshore Area 1’ project has been halted due to attacks by Islamic State terrorists in the coastal town of Palma in Cabo Delgado province.
ONGC also stated that oil output from Russia’s Sakhalin-1 project has recovered to 200,000 barrels per day (bpd). According to the company, it is reclaiming its 20% stake in the project.