State-run ONGC is considering to optimise its capital and operational expenditures as the coronavirus pandemic have impacted the progress of its projects.
“The short term liquidity position was managed by raising short term borrowings to the extent required. The onset of COVID itself will impact project progress to some extent and the Company is identifying opportunities for Capex and Opex optimisations. Going forward it is anticipated that a combination of higher oil & gas prices, rationalization in expenses and some statutory relief will help the Company to protect and maintain our activity level,” Oil and Natural Gas Corporation Ltd (ONGC) said in a regulatory filing.
It further said, “based on the situation and anticipated position as on date. Unfolding events could, in fact, may end up being different but it is anticipated the same are unlikely to materially affect the oil and gas production/off-take etc. though the unfolding events could have an impact on oil and gas prices, similarly outfield activities or project progress may get affected as the situation on COVID unfolds.”
The PSU also said that it is making efforts to get the taxes and duties rationalised due to the severe impact caused by the pandemic.
“Management is well abreast of all the challenges and attempts are also underway to seek assistance from the government for rationalisation of existing taxes and duties structure,” it said.
“Lower oil and gas prices are expected to impact internal resource generation capacity, but given low gearing levels at standalone basis fundraising for the same is not expected to be an issue,”. it added.
The short term liquidity position was managed by raising short term borrowings to the extent required, the filing added.
On the impact on supply chains, it said there have been some disruptions, especially in the international arena, but these have not yet had any major impact on day to day operations. As far as some projects are concerned, the supply chain disruption has pushed back the anticipated completion dates.
However, close monitoring is in progress to ensure that supplies and normalcy is attained at the earliest, it added.