The government is planning to ask ONGC to bear about 90 per cent of the estimated Rs 4,000 crore (Rs 40 billion) loss that the retailing firms - IOC, BPCL and HPCL - are likely to make in April-June quarter on selling petrol and diesel below cost.
ONGC chairman Subir Raha said the company plans to invest $1 billion over the next three years for acquisition of overseas assets and Rs 10,000 crore (Rs 100 billion) annually for oil and gas production at home.
"All this exploration risk is on our balance sheet. If we are asked to pay more, our ability to raise finances from the market would be impacted, thus adversely affecting our plans," he said.
Raha said the company realised about $52-53 per barrel on crude it produces in India during April-June quarter as against $37-40 per barrel average realisation in the same quarter last fiscal.
Raha said ONGC also proposes to form a Special Purpose Vehicle called Rajasthan Refineries Ltd for building a 7.5 million tonnes per annum refinery in Barmer district where Cairn Energy of UK has found a large oil field.
Cairn and ONGC will hold 50 per cent stake in the SPV. "We have submitted our application to the government for setting up the refinery and are awaiting approval," he said, adding the refinery would be built in three and half years' time.