ONGC to offload stake in petchem arm OPal, eyes global investors
ONGC Petro additions (OPaL) “has become our subsidiary and we have been tasked to dilute our stake in it and bring it back to a joint venture structure through a global tender,” ONGC director of strategy and corporate affairs Arunangshu Sarkar said on the sidelines of the ongoing India Energy Week 2026. “We are looking for partners. We hope to come out with a global expression of interest (EoI).”
Sarkar, however, did not specify the amount of stake the state-run power sector would transfer in the proposed private placement.
The proposed share sale is part of the government’s mandate to transfer its stake in the company to monetise the assets. ONGC owns 95.69% of OPaL, while GAIL India Ltd holds around 4% and the rest is held by Gujarat State Petroleum Corp.
Union government in August 2024 approved the granting of additional equity capital up to ₹10,501 crore in OPaL, conversion of backstop compulsorily convertible debentures (CCDs) amounts to: ₹7,778 crore and balance payment ₹86 crore in respect of share warrants, total ₹18,365 crore. According to the parent company, the investment was approved to alleviate the company’s financial difficulties and increase its operations.
ONGC’s FY25 annual report states: “Your company has taken decisive steps to address OPaL’s financial challenges, realizing its long-term potential. ₹To ensure feedstock stability and reduce dependence on volatile LNG markets, the Center has also approved allocation of up to 3.2 million standard cubic meters per day (MMSCM) of gas from new wells, the annual report said.
In the 25th Fiscal Year, OPaL increased its petrochemical product sales to 1,785 kilo tons, which was 1,769 kilo tons in the previous fiscal year, and its income from operations was 1,785 kilo tons. ₹14,804 crore ₹14,307 crore in FY24.
Established in 2006, OPaL is a petrochemical greenfield project located in the Dahej Special Economic Zone (SEZ). Opal Exited from SEZ in March 2025.
Mangalore Refinery and Petrochemicals Ltd (MRPL), another ONGC subsidiary, achieved a record production volume of 18.04 million tonnes in FY25 and is operating at 120% capacity, according to the annual report.
“Together, these downstream entities not only strengthen ONGC’s vertical integration but also contribute to sustainable stability at the group level by providing a financial hedge against upstream volatility. As the global energy market continues to evolve, the chemical and petrochemical sector is emerging as a major force poised to drive significant demand in the oil industry over the next decade and beyond.” he said.
As demand for products like petrol and diesel is expected to weaken globally, the Center aims to develop India as a petrochemical hub for global consumption of these alternative products used in making plastics, synthetic fibres, fertilisers, dyes, solvents, cosmetics and pharmaceuticals, among others.
India’s domestic petrochemical sector is expected to report strong growth of 6-7% annually in the medium term, supported by ongoing economic expansion and stable demand from downstream sectors, CareEdge Ratings said in its December report.
S&P Global’s October report stated that global petrochemical producers are relying on India as the main driver of demand due to slowing consumer demand, uncertainty in tariffs, shrinking margins and excess capacity.
He noted that although India’s petrochemical appetite is the strongest in Asia, this has not resulted in good news for domestic petrochemical producers. It was stated that chemical manufacturers in India are considering turning to specialty chemicals as well as upstream and downstream integration in order to compete with cheaper imports and gain a strong hold on the domestic market.
(Rituraj Baruah is in Panaji at the invitation of the Union ministry of petroleum and natural gas)
