ONGC has been moving from strength to strength of late on expectations that the entire energy sector's fortunes will brighten in the current financial year.

And that optimism saw the scrip of the state-run oil and gas explorer burst up to an all-time high of Rs 427 in morning trades. Subsequently, the scrip eased slightly, and was placed at Rs 424.45 (up 1.34% over its yesterday's close) at 11:20 IST. Close to 50,000 ONGC shares were registered as volumes on BSE by then. The scrip of ONGC has now risen 17% from Rs 363 on 9 May 2003.

Bargain hunting seems to be a dominant factor on the counter of late. Players are following a chain action, shifting funds from software stocks to banking and auto ancillary stocks and now to ONGC.

Reports that the company's crude output is expected to cross 30 million tonnes in 2003-04 is also enhancing the scrip of the largest Indian oil explorer. The expected increase in output is largely on account of imports from ONGC's newly acquired oilfield in Sudan. ONGC had acquired 25% stake in the Greater Nile Oil Project in Sudan by buying out Canadian company Talisman Energy Inc's holding in the project for $670 million. ONGC's share of oil is 3 million tonnes a year, which is 25% of the total output from the field. The company expects domestic output to increase as well.

ONGC's crude production in 2002-03 crossed the 26-million-tonne mark, an increase of 1.3 million tonnes over the production in 2001-02. The increase came mainly from ONGC's prime asset, the Mumbai High field, following re-development projects launched in 2001.

ONGC, meanwhile, has announced that it will commence retailing automotive fuels from its own petrol stations by the end of 2003. The largest Indian company in terms of market capitalisation has already secured a licence from the Government of India to set up 600 petrol pumps in four states including Gujarat, Maharashtra and Karnataka. The first petrol pump will come up in Mangalore in a couple of months time.

Some market players reckon that the ONGC scrip has received a boost following speculation over a voluminous dividend and impressive results. Already, ONGC has declared an interim dividend of Rs 17 per share. Players expect the full dividend for FY 2002-03 to be around Rs 23-24 per share.

ONGC's financial performance has been impressive of late. For the third quarter ended 31 December 2002, ONGC recorded an 84% rise in net profit to Rs 2,593.47 crore (Rs 1,409.66 crore) on a 35% increase in net sales to Rs 7,604.99 crore (Rs 5,640.58 crore).

In April 2003, the company announced the discovery of substantial oil reserves west of the Vasai gas field, off the Bombay coast. The Vasai West find is estimated to contain 240 million barrels of in-place oil plus oil-equivalent gas. The company also reported another find at Laipling-gaon in the northeastern state of Assam. Even by preliminary estimates, 100 million barrels of in-place oil plus oil-equivalent of gas are believed to be held in the Laipling-gaon discovery.

With this, ONGC has made six recent new discoveries -- Vasai West (oil and gas) on the western offshore, GS-49 (gas) and GS-KW (oil and gas) on the Krishna Godavari offshore, Chinnewala Tibba (gas) in Rajasthan, Laipling-gaon (oil and gas) and Banamali (oil) both in Assam. At Chinnewala Tibba, testing has indicated the presence of sweet gas with more than 7,000 Kcal/m calorific value, against the usual range of 1,250 to 3,100 Kcal/m in other gas finds in Rajasthan.

As on 31 March 2003, Government of India held 84.11% stake in ONGC, while the public and institutions held 1.2% and 2.62%, respectively.