The Government of India has given the green light to ONGC’s proposal for an additional investment of Rs. 18,365 Crores, resulting in a substantial increase in ONGC’s stake in ONGC Petro-additions Limited (OPaL) from 49.36% to 95.69%. This strategic move sets the stage for capital restructuring, ensuring OPaL’s operational and financial viability.
Key Points:
OPaL Overview:
- OPaL, located in Dahej, Gujarat, boasts a world-class petrochemical complex with the largest standalone dual feed cracker in South-East Asia.
- Since its commissioning in 2017, OPaL has been a state-of-the-art facility capable of producing 1.5 MMTPA of polymers and 0.5 MMTPA of chemicals.
- With a 12% market share, OPaL holds a strong position in India’s polymer segment.
Capital Structure Enhancement:
- The government’s approval to increase ONGC’s equity stake in OPaL addresses the capital structure, aiming for a healthier Debt Equity ratio.
- ONGC’s cumulative investment in OPaL will now reach Rs. 22,728 Crores.
Assured Feedstock Supply:
- ONGC commits to providing a sustained supply of gaseous feed to OPaL from its new gas fields at a premium of up to 20% over the APM gas price.
- This assurance ensures OPaL’s steady performance.
Strategic Alignment:
- ONGC’s decision aligns with its vision of becoming an integrated global energy major, expanding its presence across the downstream and petrochemical value chain.