ONGC gets into serious financial crisis

New Delhi, 22nd November 2019, Friday

ONGC, the country's oil company, was reported to be in serious financial crisis. Its cash reserves have declined by 90 million in the last four years.

This government company produces more than 60 percent of its crude oil. In the financial year ended March 31, 2019, its cash reserves had dropped to just Rs 504 crore. As of March 31, 2018, the cash reserve was Rs 1013 crore.

In March 2016, the cash reserve was Rs 9951 crore, which has dropped to 9,000 crore in the last four years. Checking the data of the last six years, it was found that on 31st March 2014, the total expenditure on ONGC wells was Rs. 11,687 crore which, while decreasing, the cash reserve was now only Rs. 504 crore.

It was also learned that most of the expenditure was behind exploration. Now the decline of cash reserve was adversely affecting its efficiency and production capacity.

According to a report, cash reserves were reduced following two deals by Hindustan Petroleum Corporation Limited and ONGC's Gujarat branch GSPC.