Oil & Natural Gas Corporation (ONGC), India's state-owned oil and gas giant, has made a significant move in the corporate bond market by providing its first guarantee in 15 years. The guarantee is for a rupee-denominated bond to be issued by its subsidiary, ONGC Petro Additions Ltd (OPAL), this quarter.

Bond Issue Details

OPAL, in which ONGC holds more than a 95% stake, is planning a substantial fundraise through a multiple-tranche bond sale. Here are the key details of the proposed bond issue:

Credit Rating Boost

The guarantee provided by ONGC has significantly enhanced OPAL's credit rating:

This credit rating upgrade is attributed to ONGC's unconditional and irrevocable guarantee, which has bolstered investor confidence in OPAL's bonds.

Historical Context

ONGC's decision to provide this guarantee marks a notable shift in its approach to supporting subsidiary fundraising:

• Last guarantee: January 2010 for ONGC Videsh Ltd bonds
• Current guarantee: First in 15 years

OPAL's Operations

OPAL operates a petrochemical project in Gujarat, highlighting the strategic importance of this fundraising for its operations and potential expansion plans.

Investor Engagement

OPAL is currently in discussions with large state-run investors to act as anchor investors for this bond issue. This move suggests a strategic approach to ensure the success of the fundraising effort and potentially secure favorable terms for the bond issuance.

The bond guarantee by ONGC for OPAL's fundraising initiative underscores the parent company's commitment to supporting its subsidiary's financial needs. This move is likely to have positive implications for OPAL's ability to raise capital at competitive rates, potentially facilitating its growth and operational plans in the petrochemical sector.

Oil & Natural Gas Corporation Limited (ONGC), India's leading oil and gas exploration and production company, has announced a strategic partnership with APM to establish an offshore oil and gas logistics facility. This collaboration aims to develop crucial infrastructure to support offshore energy operations, potentially enhancing ONGC's capabilities in the sector.

Partnership Details

The partnership between ONGC and APM is set to focus on:

• Developing a state-of-the-art offshore oil and gas logistics facility
• Creating infrastructure to support offshore energy operations
• Enhancing the efficiency of ONGC's offshore activities

This move is expected to strengthen ONGC's position in the offshore energy sector and potentially improve its operational capabilities.

Potential Impact

The establishment of this offshore logistics facility could have several benefits for ONGC:

1. Improved operational efficiency in offshore operations
2. Enhanced support for exploration and production activities
3. Potential cost savings through optimized logistics
4. Increased capacity to handle offshore projects

Company Background

ONGC, with its registered office in New Delhi, is a key player in India's oil and gas sector. The company is known for its extensive offshore and onshore operations across the country.

Recent Corporate Developments

While the partnership with APM is a significant development, it's worth noting that ONGC has recently faced a challenge in its auditing arrangements. According to the latest LODR (Listing Obligations and Disclosure Requirements) data:

• M/s MSKA & Associates, one of the five Chartered Accountants Firms appointed as Joint Statutory Auditors, has declined the appointment.
• The firm cited a conflict of interest, as its network entity has been providing multiple services to the ONGC Group, including accounting and finance services to a subsidiary and business valuation services to an associate company.
• These services fall under the category of prohibited services under Section 144 of the Companies Act, 2013, which would compromise the firm's independence as an auditor.

This development highlights ONGC's commitment to maintaining transparency and adhering to regulatory requirements in its corporate governance practices.

As ONGC moves forward with its partnership with APM for the offshore logistics facility, it will likely also need to address the auditor appointment issue to ensure compliance with statutory requirements.

The collaboration with APM for the offshore logistics facility represents ONGC's ongoing efforts to enhance its operational capabilities and maintain its position as a leader in India's oil and gas sector.