ONGC, India's leading oil and gas producer, intends to invest approximately Rs 1 lakh crore in the establishment of two petrochemical plants. These plants will be focused on converting crude oil directly into high-value chemical products as the company gears up for the energy transition. Top officials of the company announced this on Nov 15. Companies like ONGC extract crude oil from underwater and underground reservoirs, making it a crucial energy source. Oil is processed in refineries to create petrol, diesel and jet fuel. As the world seeks to move beyond fossil fuels, businesses worldwide are exploring alternative uses for crude oil.
Petrochemicals are chemicals that come from crude oil and are utilized in the production of detergents, fibers (such as polyester, nylon, and acrylic), polyethylene, and other synthetic plastics.
"We have plans to invest Rs 10,000 crore by 2028 or 2030 in two projects in two separate states," said D Adhikari, Executive Director and Chief of Joint Ventures & Business Development, ONGC, on the investor call.
"Our plan is to raise petrochemical capacity to 8.5-9 million tonnes by 2030."
One project is likely to be set up by ONGC on its own and the other in a joint venture. The details were not shared in the call.
Demand for petrochemicals, the building blocks for plastics, fertilizers and pharmaceutical commodities, is projected to remain strong due to their wide range of uses across large industries, including construction, automotive and electronics. Strengthening its chemicals business will also help the state-run oil explorer cut its reliance on the volatile oil market and improve profitability in the long run.
