Oil & Natural Gas Corp., India's biggest explorer, will boost spending to increase output at its biggest field and pay a mid-year dividend of 18 rupees a share.
The New Delhi-based company will spend an additional 25.5 billion rupees ($645 million) on increasing production at its Mumbai High area off India's west coast, Oil & Natural Gas said in an e-mailed statement. The explorer's board also approved the dividend payment amounting to 38.5 billion rupees.
Oil & Natural Gas, which in October approved a $1.4 billion investment on the acreage, needs to increase output to retain its position as the largest supplier of crude oil and gas in India. Oil imports by India, Asia's third-biggest oil consumer after China and Japan, are set to rise as refiners expand capacity to meet demand. India imports three-fourths of its oil requirement.
The Mumbai High region yields about 16 million tons of crude oil annually, or 320,000 barrels a day, which is more than 60 percent of the company's total output.
The explorer is investing in upgrading platforms and digging deeper wells and plans to replace pipelines as output from the aging, nearly three-decade old, area declines.
Oil & Natural Gas's spending, approved yesterday, will go toward replacing a network of pipelines, the company said. The money will be spent over three years.
The board also approved spending 1.5 billion rupees on the PY-3 field in the Cauvery basin, off the east coast. Oil & Natural Gas holds a 40 percent stake in the area, and Hindustan Oil Exploration Co. and Tata Petrodyne Ltd. hold 21 percent each.
Oil & Natural Gas plans to boost spending on developing new and existing fields by 20 percent in the year that began April 1 to 180 billion rupees from 150 billion rupees the previous year, Chairman R.S. Sharma said on April 16.
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