State-owned Oil and Natural Gas Corp (ONGC) is unlikely to invest in overseas oil and gas assets at current crude prices of USD 40-45 per barrel and foreign acquisitions make sense only at lower rates, its director finance said on Wednesday.
ONGC Videsh Ltd (OVL), the overseas arm of the company, has seen profitability drop by about 73 per cent to Rs 454 crore in the fiscal ended March 31.
The company has not made an overseas investment in two-and-half years.
At the first quarter earnings call with investors, ONGC Director (Finance) Subhash Kumar said "any acquisition by OVL will be justified only at significantly lower oil prices than current rates." Prices are stuck at USD 45 per barrel, he said.
OVL is the overseas investment arm of ONGC. It has 39 projects in 19 countries spanning from Venezuela to New Zealand. It has so far invested USD 29.28 billion in projects abroad.
Its last acquisition was a 4 per cent stake in Lower Zakum Concession in the UAE in February 2018.
Some of its past decisions, such as the 2014 decision to buy 16 per cent stake in a Mozambique gas block, have come under intense scrutiny of the present government.
Kumar said OVL's overseas investments are largely funded through borrowings by the company. Such debt is backed by ONGC.
He, however, said OVL can invest if there is a right opportunity.