Oil and Natural Gas Corporation cut debt by 35 per cent to Rs 13,949 crore

ONGC's outstanding debt of Rs 21,593 crore as of March 31, 2019, has come down to Rs 13,949 crore as on March 31, 2020, as per the company's regulatory filings, it used revenue from improved operations.


New Delhi (Natural Energy News): The state-owned Oil and Natural Gas Corporation (ONGC) has cut its debt by more than a third, but is employed during the current fiscal year as oil and gas prices fall below sub-optimal levels. To meet the expense is facing a tough challenge, for company executives and regulatory filings.




ONGC's outstanding debt of Rs 21,593 crore as of March 31, 2019, has come down to Rs 13,949 crore as on March 31, 2020, as per the company's regulatory filings, it used revenue from improved operations.


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Out of this loan, the long-term lending stands at Rs 2,245 crore due to maturity in December 2029.


The company had cash and cash equivalents (other bank balances) of Rs 968 crore as on March 31, 2020, up from the record level of Rs 504 crore a year earlier.


The standalone debt-equity ratio at the end of March 31, 2020, is only 0.07 which is considered comfortable.


Company officials said ONGC is working to bring operational efficiencies and financial discipline and uses surplus revenue to pay down debt.


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"While we have ended the 2019-20 economic year with safe fiscal circumstances, we are handling a difficult challenge during the current 2020-21 fiscal year. The epidemic has wreaked havoc on oil prices and the government The gas price is below the cost of production. " "A senior official said.


He said that ONGC has planned capital of over Rs 26,000 crore and the current oil and gas price will be a challenge.


Another official said that the company incurred a loss of Rs 4,899 crore in Q4 FY'20 to increase the estimated future crude oil and natural gas prices.


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However, the company believes that oil and gas prices will recover in the future and in this case there will be a loss with the increase in prices.


ONGC was once India's most profitable company with a cash balance of over Rs 10,000 crore. But the fortunes were reversed after the company bought oil marketing company Hindustan Petroleum Corporation Limited (HPCL) and Gujarat government's 51.11 per cent stake in KG Basin gas block in GSPC.


It acquired 51.11 per cent equity shares in HPCL through an internal fund of Rs 12,034 crore, and Rs 24,881 crore from funds borrowed from commercial banks. The funding requirement of Rs 7,560 crore for KG block acquisition of Gujarat State Petroleum Corporation was met through borrowing against fixed deposits.


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It's cash and balance dipped to touch a low of Rs 504 crore in March 2019, Rs 1,013 crore in March 2018 and Rs 9,511 crore in March 2017 and Rs 9,957 in March 2016.


One official said, "We live in a period of administration putting up sub-optimal oil prices and natural gas prices below cost. The answer to such a scenario is to optimize costs and bring in operational efficiencies, "Said an official.


He said that the company has a credit / short-term fund facility of Rs 7,800 crore with banks to meet working capital or deficit requirements. In addition, the company has a total limit of Rs 10,000 crore for raising funds through the commercial paper.


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