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India’s ONGC stock at one-year high on rising oil prices

By Munikoti Rochan

08:00, 5 October 2021

An ONGC oil pump in Gandhinagar, India
An ONGC oil pump in Gandhinagar, India - Photo: Shutterstock

Shares of state-owned Oil and Natural Gas Corporation (ONGC) hit a one-year high Tuesday on rising oil prices, and after reports said that the firm was readying paperwork to award multiple engineering contracts to replace its pipelines this year.

The stock zoomed 10% to INR162.35 ($2.18) in afternoon trade on the National Stock Exchange (NSE), a day after the cost of a barrel of crude rose to a seven-year high of $78.17 on the New York Mercantile Exchange, while the Brent international benchmark traded at a three-year high of $81.48.

Oil prices have risen in the wake of limited increases to global production by the cartel Organization of the Petroleum Exporting Countries or OPEC, reported The Economic Times.

West coast upgrade

ONGC also gained from the news that the energy giant would hire a contractor to replace 256 kilometres of pipeline, the first of several upgrades along India’s west coast worth over $1.25bn, as per a report published on Upstream’s website.

The upgrade is part of the INR313.5bn annual outlay that will see ONGC procure, erect and maintain equipment and infrastructure in the business year through March 2022.

Around 256kms of pipes, under the delayed Pipeline Replacement Project VII (PRP-7), would be installed in 39 pipeline segments across ONGC’s Mumbai High, Neelam and Heera, and Bassein and Satellite assets.

Oil - Brent

73.67 Price
-4.640% 1D Chg, %
Long position overnight fee -0.0026%
Short position overnight fee -0.0193%
Overnight fee time 21:00 (UTC)
Spread 0.04


23.18 Price
-0.110% 1D Chg, %
Long position overnight fee -0.0183%
Short position overnight fee 0.0101%
Overnight fee time 21:00 (UTC)
Spread 0.020


1,959.39 Price
+0.770% 1D Chg, %
Long position overnight fee -0.0183%
Short position overnight fee 0.0101%
Overnight fee time 21:00 (UTC)
Spread 0.30

Natural Gas

2.30 Price
-3.340% 1D Chg, %
Long position overnight fee -0.1291%
Short position overnight fee 0.1072%
Overnight fee time 21:00 (UTC)
Spread 0.005

Scope of work includes demolition of redundant risers and modifications to several structures.  Bids from domestic and international subsea construction firms are expected this November, Upstream added. 

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Capex requirements

ONGC has a market capitalisation of around INR2.02trn. The counter has gained some 73% so far this year.

In a July statement, India’s largest oil and gas producer said it would spend INR155bn on lumpsum turnkey projects during fiscal 2021-22, in addition to INR136bn on major services and INR22.5bn on major material procurement.

The tendering process for PRP-7 was cancelled in 2020, in the wake of the Covid pandemic.

Read more: India’s Fino Payments Bank to float INR13bn IPO


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