Mumbai: State-owned oil and gas major ONGC has decided to invest around Rs 1,22,000 crore to expand its activities in the existing five-year (11th) plan period. This will also include Rs 20,000 crore investment in the country’s east coast.

Director R S Sharma, ONGC Chairman and Managing Director, said, “We have plans to invest Rs 76,000 crore domestically and Rs 46,000 crore overseas during the current five-year plan period ending 2012.”

Mr. Sharma told that the domestic investments would be made through internal accruals of the company that earned Rs 15,600 crore cash profit during 2006. The company makes up cash profit of Rs 2,000 crore every month.

He said that the bulk of the domestic investments will be for reviewing, growth, exercising and refurbishing subsisting blocks.

On investitures off the east coast, he sounded out that ONGC would spend Rs 20,000 crore, which includes an operating expenditure, by 2011-12.

Sharma said, “The basin off the east coast has expected reserves of more than six trillion cubic feet of gas. It is also likely to produce 8,000 barrels of oil per day. This, however, excludes deep-water production.”

ONGC owns three adjoining oil fields off the east coast of the country. It holds 90 percent of the assets whereas the remaining is possessed by Cairn India.

The company has planned to dilute about 50 percent stake in these blocks that will start production by 2011-12. In the existing fiscal, ONGC has completed five offshore projects worth $1 billion. Around 13 projects are in action and 11 projects were finished by April 2007.

ONGC has six projects under tendering valued in excess of Rs 8,000 crore and 11 projects under conceptualisation by FY'12.

Sharma said, “We envisage additional 46 MMT of oil and 55 BCM of gas production over a period of 15-25 years.”

He also said that the ONGC production was much better despite worldwide retardation in crude production.

“Production decline is a global phenomenon now. Except for OPEC, all OECD countries are experiencing decline in oil production. But, we have managed to arrest decline through better management,” Sharma said.

In 2007, ONGC would spend Rs 16,000 crore, he said adding capex for 2008 has been earmarked at Rs 19,000 crore.