ONGC Plans Cost Reduction to Brace for $60 Oil Price

State-run Oil and Natural Gas Corporation (ONGC) wants to cut the total money spent on the company by 15% in the next two years while preparing for a drop in the price of crude oil to $60 per barrel due to the global oil surplus.

The firm has a plan to save more than 9,000 crore rupees by FY27 mainly because of more production in the Mumbai High field, regular activities at the Pipavav supply base, and their exploration into oil trading.

On the savings that are predicted, 43 billion rupees will become reality by March 2026 with the going through with the 20 key activities that are the major contributors to cost efficiency, while the rest of 50 billion rupees will come from operational measures.

The ONGC’s plans comprise offshore resource optimization, improved drilling efficiency, logistics route rationalisation, inventory management, and fuel efficiency enhancements.

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The company is at the same time working on releasing over 1 billion rupees of savings by expanding the activities at the Pipavav base. They also foresee 1-billion-dollar annual savings if they start oil trading business, which can be done via joint ventures with foreign partners.

On the production side, in the FY25, ONGC went against the trend and raised the crude output by 1 per cent year-on-year and in H1 FY26, it also kept on increasing. Work with BP at Mumbai High is likely to have a return of up to $15 billion in extra revenue during the next ten years.