ONGC says finances are sound; no issues with salary payments

State-owned Oil and Natural Gas Corp (ONGC) Thursday said its finances are as sound as ever and is generating enough revenues to meet all its capital and operating expenditures as well as any additional merit-based requirement.

Debunking reports of the company had to avail overdraft facility to pay salaries to its employees, ONGC Director (Finance) Subhash Kumar said ONGC continues to be on a "sound financial position" and is meeting all of its Rs 32,077 crore budgeted expenditure for 2018-19 fiscal year.

"These claims in some quarters of the company being unable to pay salary to its employees are completely untrue and based on a misinformation campaign," he said. "Even in low oil prices, we were able to discharge all our obligations. And now prices (that ONGC gets for oil and gas it produces) are certainly much better and so there is no question of any default on any count."

The company, which has an annual revenue of about Rs 85,000 crore, has enough resources to meet its capital expenditure and operating expenses, he said. "Salary is only a small expense."

Congress spokesperson Manish Tewari had earlier this week stated that ONGC Employees Mazdoor Sabha has written to Prime Minister Narendra Modi alleging that the public-sector oil giant has been turned from a cash-rich company to totally debt-ridden that has to resort to avail overdraft facility in order to discharge the salary obligation of employees.

"We are apolitical organisation. We don't want to be caught in any politics but the fact is that I have enough resources to meet my budgeted expenditure that includes salaries to employees," he said. "The company is as strong as it was in past. We are capable of meeting the budgeted Rs 32,077 crore expenditure and any additional merit-based outlay."

Kumar said the company's debt-equity ratio is 0.13:1 which is significantly lower than global peers in oil and gas exploration and production business. ONGC had borrowed Rs 24,881 crore on a short-term loan to fund buying the government's 51.11 per cent stake in HPCL. It has already paid off close of half of that from revenues it generates.

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ONGC had in January this year bought government's stake in Hindustan Petroleum Corp Ltd (HPCL) for Rs 36,915 crore. Of this, Rs 24,881 crore was by way of loan and remaining from internal accruals.