ONGC Videsh Gain 5% As Fourth Commercial Oil Strikes In Colombia

ONGC gains 5% rise in BSE this morning

The Oil and Natural Gas Company's (ONGC) subsidiary ONGC Videsh Limited (OVL) surged 5% to 94 rupees on Monday morning at the Bombay Stock Exchange (BSE). The company declared that OVL, its overseas subsidiary has made a ‘significant strike of oil’ in Colombia. This is ONGC Videsh’s fourth commercial find.

Since March 2020 the state owned oil exploration and production Company was trading at the highest level. Today at 9:25 AM the company’s shares were trading at 93.15 rupees which is up by 4% as compared to 0.15% gain in the Standard & Poor’s (S&P) BSE Sensex.

The company issued a press release where it said “ONGC Videsh Limited (OVL), the wholly owned subsidiary and overseas arm of ONGC has made a significant strike of oil in its onshore block CPO-5, Colombia, in Llanos Basin. OVL is operator in the block with 70% stakes with its partner Geopark Limited (30% stake) an independent oil and gas company focused in Latin America.”

ONGC is expected to grow its gas production in FY22 with efforts to arrest the decline in OIL production from an age old field according to the analysts at Motilal Oswal Financial Services. They also said that the company is likely to generate Free Cash Flow of 38000 crore rupees and a dividend of 3.5% in the FY21-23.

In the Colombian Oil and Gas Sector OVL has a major presence and holds participating interest in 7 explanatory blocks in addition to 2 producing blocks with a Joint Venture (JV) Company named Mansarovar Energy Colombia Limited (MECL) having 50% stakes.