ongc: ONGC does not see windfall tax coming, says no offer on Russia

NEW DELHI: Flagship explorer ONGC does not see the Centre imposing a windfall tax — similar to the measure announced by the UK government last week — to tap part of the record profit made by the company due to surging global prices, chairman Alka Mittal said on Monday.
“We have no signal from the government on this. Rather, the government has been conveying to us to go aggressive on spending on exploration to augment domestic output and cut import reliance. I don’t think they (government) will be talking about this (windfall tax),” Mittal said.
The government last week cut excise duty on petrol and diesel to ease pump prices. It said the move would cost the exchequer Rs 1 lakh crore per year in tax revenue, which prompted talks of windfall tax in industry circles.
Mittal is the second head of a public sector explorer after Oil India Ltd chairman S C Mishra to rule out the possibility of windfall tax at a time the government is seeking foreign investment in exploration.
Company executives said 65-66 paise out of every rupee earned by the company goes to the exchequer in taxes. The rest is invested in hunting for new reserves and maintain production from existing fields. Lack of such investments will hurt future production and affect efforts to reduce the country’s dependence on imports by raising domestic production.
Mittal said ONGC is spending Rs 30,000-32,000 crore annually to maintain output from ageing fields and starting production from new finds.
On the issue of government reportedly looking at selecting a person from the private sector as the next ONGC chairman, Mittal said batted for : “All I can say is the best of talent in the upstream sector is available on the (company’s) board.“
On reports of the government asking ONGC to look at acquiring stakes of western majors that have announced plans to exit Russian oil projects, Mittal said there was no directive. “We are in touch with the (oil) ministry and watching the situation. There is nothing beyond that.”
A senior company executive said “no one has made any offer to ONGC (on Russia), which remains on the lookout for prized assets globally at any given point.”


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