India’s two leading state-owned oil and gas companies, Indian Oil Corp (IOC) and Oil and Natural Gas Corp (ONGC), have entered into a memorandum of understanding (MoU) to jointly explore downstream opportunities in the petrochemical sector.
The collaboration aims to leverage the strengths of both companies, including their subsidiaries, through greenfield projects, acquisitions, and global partnerships.
The MoU signed on June 14 establishes a framework for IOC and ONGC to explore the utilization of their respective downstream businesses, including subsidiaries. The companies will assess the feasibility of setting up new assets and focus on the production of petrochemicals. They will also explore opportunities for utilizing each other’s feedstock to enhance efficiency and maximize output.
In addition to their focus on the domestic market, IOC and ONGC will collaborate to identify global opportunities to enhance the export of refined products and petrochemicals. The partnership will also extend to oil-to-chemicals (O2C) collaborations, aiming to capitalize on the synergies between the two companies and drive innovation in this sector.
India’s petrochemical demand is expected to triple over the next seven years, highlighting the need for increased production capacity. Arvinder Sahney, Executive Director of Petrochemicals at IOC, emphasized the significance of this partnership in bridging the gap between supply and demand in the Indian market. The collaboration between IOC and ONGC will play a crucial role in meeting the rising demand for petrochemicals in the country.
ONGC holds the distinction of being India’s largest crude oil and natural gas company, responsible for approximately 71% of domestic crude oil production. The company’s wholly-owned subsidiary, ONGC Videsh Ltd (OVL), operates oil and gas assets in 15 countries. ONGC’s subsidiaries include Mangalore Refinery and Petrochemicals Ltd (MRPL), Hindustan Petroleum Corp Ltd (HPCL), ONGC Petro additions Limited (OPaL), and ONGC Mangalore Petrochemicals Ltd (OMPL). These subsidiaries contribute to ONGC’s diverse portfolio and strengthen its position in the industry.
IOC operates nine refineries across India, with a combined refining capacity of over 80.5 million tonnes per year, accounting for 32% of the country’s total refining capacity. The company has well-established petrochemical complexes near its Gujarat, Panipat, and Paradip refineries. IOC plans to expand its petrochemical operations at existing complexes and establish new petrochemical units, including at its Barauni refinery. These initiatives will further bolster IOC’s presence in the petrochemical sector.