India's top oil and natural gas producer ONGC has signed a pact with the nation's largest oil refining and fuel marketing company Indian Oil Corporation (IOC) for exploring opportunities in the petrochemicals business.
Oil and Natural Gas Corporation (ONGC) and IOC "signed a memorandum of understanding (MoU) to explore downstream opportunities, especially in petrochemicals, both greenfield projects and through acquisitions," ONGC said in a tweet.
ONGC, which produces two-thirds of the nation's oil that is refined into fuels like petrol and diesel and more than half of gas that is used to make fertilisers and turned into CNG, already has two downstream petrochemical plants through subsidiaries.
As nations transition away from polluting fossil fuels to low-carbon sources of energy like hydrogen and use of electricity to power automobiles, oil companies the world over are reinventing themselves.
Crude oil, which is currently refined in refineries to produce petrol and diesel, is to be directly converted into petrochemicals that form building blocks for a range of plastics, paints, detergents and tires.
The demand for petrochemicals in India is projected to grow exponentially as the per capita consumption was much lower world average.
Last month, Oil Minister Hardeep Singh Puri stated at a conference that the chemical market in India is projected to grow to $300 billion (Rs 24,61,075 crore) this decade from $178 billion (Rs 14,60,238 crore).
India is expected to account for more than 10 per cent of the world's growth in petrochemicals, a press statement issued by the Press Information Bureau (PIB) on May 19 quoted him as saying.
IOC already has petrochemical units at most of its refineries and has big ambitions to grow the business.
The MoU was signed by ONGC executive director for new ventures Deb Adhikari and IOC executive director for petrochemicals Arvindar Singh Sahney, according to the picture tweeted by ONGC of the signing ceremony. IOC retweeted the same.
ONGC's subsidiary Mangalore Refinery and Petrochemicals Ltd (MPRL) operates a petrochemical unit in Karnataka. Its other subsidiary has a unit in Gujarat.
The firm reportedly is looking at investing Rs 1 lakh crore by 2030 to expand the petrochemicals manufacturing capacity. This is a part of the government's larger plan to make India a major global petrochemical hub.
ONGC's joint venture ONGC Petro additions Ltd (OPaL) and its subsidiary MRPL is to implement expansion plans that will double the production capacity to 8 million tonnes per annum by 2030.
It is not known if the MoU signed now will lead to IOC joining those projects or if the agreement is for exploring new projects altogether.
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