**ONGC Plans to Establish Oil and Gas Trading Unit Amid Market Volatility**
State-run Oil and Natural Gas Corporation (ONGC) is in the process of establishing a trading unit focused on oil, gas, petroleum products, and petrochemicals produced by its subsidiaries. Rajarshi Gupta, managing director of ONGC Videsh Ltd (OVL), the overseas arm of ONGC, emphasized that trading is a crucial step for the country’s oil and gas sector. Speaking at the 3rd Energy Summit of the Indo-American Chamber of Commerce, Gupta stated, “We have created a commodity trading group within ONGC dedicated to trading activities.”
The initiative is currently in the conceptual phase, with plans to expand its scope as the need for trading in India grows, particularly due to increasing demand driven by economic growth. Gupta noted that the global energy market is experiencing significant volatility and uncertainty, largely due to geopolitical tensions, making oil sourcing a critical issue.
ONGC currently produces approximately 42 million tonnes (MT) of crude oil, while its subsidiary Hindustan Petroleum Corporation Ltd (HPCL) procures around 30-35 MT, and Mangalore Refinery and Petrochemicals Ltd (MRPL) purchases about 18-20 MT. Additionally, OVL contributes 10.5 MT of oil. “As a group, ONGC manages around 100 MT of crude oil transactions. Consolidating these efforts could be beneficial,” Gupta explained.
The trading unit is still in the planning stages, with a dedicated group working on the operational modalities. Gupta also highlighted that innovative gas sourcing models are being explored in the energy market. “We have decided to source about 5 million tonnes of LNG, utilizing a mix of Henry Hub pricing, crude-based LNG, and various sources,” he added, acknowledging that market volatility is expected to persist and that sourcing options will likely expand in the future.
In conclusion, ONGC’s initiative to establish a trading unit reflects its proactive approach to navigating the complexities of the global energy market and meeting the rising demand for oil and gas in India.
**FAQ**
**What is ONGC’s new trading unit focused on?**
ONGC’s new trading unit will focus on oil, gas, petroleum products, and petrochemicals produced by its group companies, aiming to enhance trading capabilities in response to market demands.
