India’s leading state-owned oil and gas giants are expected to spend nearly 1.1 trillion Indian rupees ($14.9 billion) together in the upcoming 2022-2023 financial year, which starts in April.

The massive capital expenditure plans were unveiled during India’s recent Union budget and includes Oil & Natural Gas Corporation (ONGC), Indian Oil Corporation (IOCL), Gail India, Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Oil India Limited (OIL).

The spending plans of some ONGC subsidiaries, including ONGC Videsh and Mangalore Refinery & Petrochemicals (MRPL) are also included in the capex outlook, Upstream understands.

The capital expenditure earmarked by the companies for the upcoming financial year is almost 7% higher than their combined spending of almost $13.9 billion in the 2021-2022 period, according to India’s leading business news daily, The Economic Times.

Improved economic fundamentals, higher oil prices and the fading risk of the coronavirus are likely to boost the sentiments of the companies as the nation targets a 10% reduction in its dependence on costlier oil imports, which are expected to zoom past $100 billion this year.

ONGC-leading the spending plan

ONGC has seen its oil production marginally dwindling over the years, but is expected to spend almost $4 billion during the 2022-2023 financial year.

Despite the coronavirus outbreak and economic downturn, the company is maintaining a robust capital expenditure programme, with up to $1.5 billion likely to be spent on exploration and appraisal drilling this year.

In addition, about $1 billion would be spent on development drilling, with the remaining expenditure going towards project developments.

ONGC is currently executing the $5 billion-plus KG-DWN-98/2 deep-water development, which is likely to boost oil and gas output offshore India’s east coast in the coming years.

Significant spending is also expected on ageing west coast fields, where oil and gas production has been in decline.

India’s other major uopstream company, OIL, is also exoected to keep its spending steady during the financial year at up to $575 million.

Downstream expenditure

In the downstream sector, IOCL is expected to spend close to $3.8 billion, maintaining similar guidance to the previous financial year, while BPCL and HPCL could together incur a capex of almost $3.3 billion.

Gas marketing and distribution giant Gail is also eyeing robust spending of almost $1 billion during this period.

The remaining capex estimate includes spending plans for ONGC Videsh and MRPL, Upstream understands.