ONGC - Highlights

Oil & Natural Gas Corporation Ltd (ONGC) has announced the following Press Release:

Highlights of Board Meeting held on December 22, 2007

(A) Decisions:

- Interim dividend of 180 per cent, amounting to Rs 3850 Crore
- 2nd Pipeline Replacement Project in Mumbai Offshore approved: Rs 2553.25 Crore
- PY-3 Phase-III Development approved: Rs 147.19 Crore

(B) Notings:

- A record of 6 Oil & Gas discoveries in Nov-07
- OVL bagged 2 offshore blocks in Brazil in Nov-07
- 1st Development well of CBM spudded in Dec-07
- First-ever Indian Company to be in Fortune's 'Most Admired Companies' list, 2007

(A) Decisions:

1. Interim Dividend:

1.1 An interim dividend of 180 per cent (Rs 18 per share), has been declared by the Board of the Company in its 174th meeting held on December 22, 2007. In FY 2006-07 also, ONGC had declared an interim dividend of 180 per cent and an aggregate dividend of 310 per cent amounting to Rs 6631 Crore.

1.2 In absolute terms, this interim dividend works out to a pay-out of Rs 3850 Crore (on the post-bonus paid-up capital of Rs 2,139 Crore), including Government of India share (74.14%) of Rs 2854 Crore.

1.3 In addition, ONGC will be paying a dividend tax on the above, which works out to be Rs 654 Crore.

1.4 The net profit (PAT) of the Corporation for the half-year for FY 2007-08 is Rs 9708 Crore Crore, up 17% from Rs 8,293 Crore for the corresponding period previous year.

2. New Projects: 2nd Pipeline Replacement Project

2.1 After the implementation of the Mumbai Redevelopment Project, it is expected that the Mumbai Offshore fields will be producing up to 2030. Hence, there is a need to strengthen the Pipeline network for Oil & Gas transportation. Therefore, the Board approved the '2nd Pipeline Replacement Project' along with necessary modifications, at a cost of Rs 2553.25 Crore, to be implemented over a period of 3 years.

3. PY-3 Phase-III Development approved

3.1 The ONGC Board approved the Phase-III Development of PY-3 (In Cauvery Offshore) field at a Capex of US$ 35.9 million (Rs 147.19 Crore), which is 40% of the total investment of US$ 89.75 million. ONGC holds 40% stake in the field; other stakeholders are HOEC (21%), Tata Petrodyne (21%) and Hardy Exploration & Production (18%). This Phase-III development of the field will enhance the recovery by 10.52 MMSTB (Million Metric Stock Tank Barrels).

(B) Notings:

1. A record of 6 Oil & Gas discoveries in Nov-07

1.1 In November 2007, ONGC made 6 Oil and gas discoveries, 3 in New Prospects and 3 in New Pool discoveries in earlier established fields.

1.2 New Prospect Discoveries:

1.2.1 Well D-1-14, PEL:BOFF, Western Offshore Basin: Flowed Oil @136.8 m3/day through ½’’ choke. This discovery has opened up a large area for further exploration

1.2.2 Well B-55-5, PEL:BOFF, Western Offshore Basin: Flowed Gas @82,238 m3/day through ½’’ choke. This is 2nd discovery in this PEL block this year

1.2.3 Well GS-48-1, PEL block: IF (Shallow Offshore) in KG-PG Basin: Flowed Gas @82,243 m3/day and condensate @ 5.76 m3/day through 6 mm choke. This discovery has opened up areas to the east of GS-KW/GS-23 fields for exploration of Matsypuri Formation in KG shallow offshore areas

1.3 New Pool discoveries

1.3.1 Well CT-2, ML: Chinnewala Tibba, Rajasthan
1.3.2 Well GS-KW-5, ML: GS-15/23 shallow offshore, KG-PG basin
1.3.3 Well PSP-40, PML: Tatipaka-Pasarlpudi, KG onland

2. ONGC Videsh Ltd. (OVL) wins two exploration blocks in Brazil

2.1 OVL bagged two exploration blocks in Brazil, viz. Deepwater Block 470 in the highly prospective Espirito Santo Basin and Shallow water Block 1413 in another highly prospective Santos basin, amid stiff competition from International companies on November 27, 2007.

3. First CBM development well spudded

3.1 The first Development Well for Coal Bed Methane (CBM) has been spudded on December 2007 at the drill-site Pad-B in Parbatpur, near Bokaro Steel City of Jharkhand.

4. ONGC – First-ever Indian Company on Fortune's list of 'World's Most Admired Companies', 2007

4.1 ONGC achieved the unique distinction of becoming the first-ever Indian Company in the Fortune Magazine's annual (2007) list of the 'World's Most Admired Companies'. This is based on a survey of Fortune Companies across the globe, conducted by the Fortune magazine, in association with Hay Group.

Speaking on the occasion, C&MD of ONGC Mr. R S Sharma said that notwithstanding the continuing volatility in crude prices, the Board decided to reiterate ONGC's commitment to live up to shareholders' expectations for value enhancements.