MUMBAI: ONGC shares rallied the most among large caps on Monday on reports the ceiling on crude pricing from the oil major’s marginal fields is likely to be removed, thus making development of these fields by service contractors lucrative.
At 11:35 am, the company’s share was up 6.37 per cent at Rs 1,111 with volume traded at 82,711 against two-week average of 3,47,573 shares.
Currently, ONGC enters into service contracts with companies involved in development of marginal fields through a bidding process. A price cap of $35 a barrel governs the sale price when contractors sell crude to the exploration major.
This means even if international crude prices soar, the price of oil produced from marginal fields cannot be above $35, making it unattractive for the prospective bidders.
However, the crude price after removal of the cap would still be lower than what ONGC realises by selling crude to oil marketing companies, which is around $54 a barrel.
At 11:35 am, the company’s share was up 6.37 per cent at Rs 1,111 with volume traded at 82,711 against two-week average of 3,47,573 shares.
Currently, ONGC enters into service contracts with companies involved in development of marginal fields through a bidding process. A price cap of $35 a barrel governs the sale price when contractors sell crude to the exploration major.
This means even if international crude prices soar, the price of oil produced from marginal fields cannot be above $35, making it unattractive for the prospective bidders.
However, the crude price after removal of the cap would still be lower than what ONGC realises by selling crude to oil marketing companies, which is around $54 a barrel.
No comments:
Post a Comment