ONGC finished Rs.807 on NSE after yesterday’s trading. It’s a huge winding down from the recent peak of Rs.910. True the post-budget meltdown all around is responsible. But, according to ONGC management, so too is the oil regulatory authority, DGHC (Directorate General of Hydrocarbons).
In a recent letter to oil ministry, the normally reticent CMD of ONGC has complained that the DGHC’s rejection of its gas find last month in KG basin’s (Krishna-Godavari basin off Andhra coast in the Bay of Bengal) ultra-deep well is the reason for sharp erosion in the share value.
DGHC looks like acting in a partial manner because it duly approved similar claims by Reliance Industries not long back. Since ONGC too adopted the same testing means to ascertain the discovery, that too in presence of DGHC representatives, it is peeved at the regulators’ volte-face.
For the record, ONGC’s estimated discovery of 14 trillion cubic feet of in situ gas reserves at KG basin must rank as one of the largest made by it in a long time. But for all that, losing Rs.23,000 crore in market capitalization in just a week’s time is very hard to digest. The current stock market situation doesn’t guarantee a quick return to top levels either. Perhaps the FY-07 results will do the favor. Some broking houses have put a buy on the scrip with a target at around Rs.1135. [Collated from ET, March 13]