ONGC Shares Jump To One Year High After New Oil Discovery In Krishna Godavari Basin

A day after Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, announced the extraction of the first oil from a deep-sea project, 30 km off the coast of Andhra Pradesh's Kakinada, the stock of India's largest oil and gas company, ONGC, rejoiced.

ONGC Shares Jump To One Year High Mark

ongc/x

The stock price of ONGC reached its new one-year high today morning when it hit the Rs 221.45 mark as the oil giant commenced extracting oil from the newly discovered Krishna Godavari Deep-Water Block region. This jump represents a 1.61% increase in value compared to the previous trading day. However, the shares then slid a bit and are currently trading around the Rs 217 mark (at the time of writing this report).

"ONGC commenced its 'First Oil Flow to FPSO', from Krishna Godavari Deep-Water Block 98/2 (in the Bay of Bengal), on January 7, 2024, nearing completion of Phase 2 of the project. Phase 3, leading to peak oil and gas production, is already underway and likely to be over in June 2024. The 98/2 project is likely to increase ONGC's total oil and gas production by 11 percent and 15 percent, respectively," ONGC said in a post on X (formerly Twitter).

#ONGC commenced its ¡®First Oil flow to FPSO¡¯, from Krishna Godavari Deep-Water Block 98/2 (in Bay of Bengal) on 7 January 2024, nearing completion of Phase-2 of the project. Phase-3, leading to peak Oil and Gas production, is already underway and likely to be over in June 2024.¡­ pic.twitter.com/7Aq5CSMHp3

¡ª Oil and Natural Gas Corporation Limited (ONGC) (@ONGC_) January 8, 2024

More About The New Oil Discovery

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India's first crude find, Krishna Godavari Deep-Water Block 98/2 in the Bay of Bengal, has seen the start of "first oil" production by ONGC. In the Krishna Godavari basin, thirty kilometres off the coast of Kakinada, the oil is extracted.

"I'm happy to let everyone know that yesterday marked the extraction of the first oil (by ONGC). This project began in 2016 and was completed in 2017, however, there were significant delays due to COVID". Hardeep Puri, the Union Minister of Petroleum, said on Monday, as per the ET report.

Heartfelt congratulations to @ONGC_ and the incredible team of energy soldiers for successfully extracting the oil from Krishna Godavari Basin.

This field will produce 45,000 barrels per day ¨C a remarkable 7% of our total crude oil and gas production. Exciting times ahead! pic.twitter.com/v8MsK6CgU2

¡ª Hardeep Singh Puri (@HardeepSPuri) January 9, 2024

According to the minister, four of the 26 wells are currently producing, and by May or June, production is predicted to reach 45,000 barrels per day, or 7% of our total crude oil production. "I have no doubt that four of the 26 wells there are currently in use. In May or June, we aim to generate 45,000 barrels per day, which represents 7% of our entire crude oil production and 7% of our gas output. Not only will we have gas soon, but we also hope to have it by then," Puri further mentioned.

hardeep singh puri/x

Phase 3, which will result in the basin's peak production of gas and oil, is already in progress and is anticipated to conclude in June 2024. It is anticipated that the 98/2 project will result in an 11% and 15% increase in ONGC's overall output of gas and oil, respectively.

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Stock Performance Of India¡¯s Oil Giants

As far as 2024 is concerned, the shares of ONGC are up more than 5% this year till date, more than 46% up in the last year, and more than 50% up in the last five years. On the other hand, looking at some of the other oil giants in our country, Indian Oil's share price is up nearly 1.2% this year, more than 66% in the last year, and about 52% in the last five years. Bharat Petroleum's shares are just marginally up 0.9% this year, more than 32% up in the last year, and more than 35% up in the last five years.

Oil India's share price has been 0.92% up this year, more than 78% up in the last year, and more than 116% up in the last five years. GAIL's shares are down more than 4% this year but up more than 60% in the last year and more than 40% in the last five years.

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