Whalesbook
ONGC Starts Gas Flow from DUDP Project
Oil and Natural Gas Corporation (ONGC) began gas production from its Daman Upside Development Project (DUDP) on March 29, 2026. Gas is now flowing from Platform B-12-24P to the Hazira Plant. The $1 billion project was completed in less than two years, demonstrating efficient execution. ONGC anticipates increasing output from DUDP and other new fields, especially offshore assets.
Analyst Optimism Grows as Tax Concerns Ease
Analysts are positive on ONGC and Oil India, citing their strong domestic market share and reserves. A major reason for this optimism is the Indian government's decision not to impose windfall taxes on domestic crude earnings. This regulatory clarity, supported by amendments to the Oilfields Regulation and Development Amendment Act in January 2025, has removed a significant concern for producers. Brokerages like JM Financial note that companies are currently pricing net crude realization around $65 per barrel, far below levels seen after the Russia-Ukraine crisis. They estimate that each $1 per barrel increase in crude realization could lift earnings per share by 1.5-2% for both companies.
Growth Outlook and Price Targets
ICRA forecasts ONGC's oil and gas volumes to rise as new fields come online. Redevelopment of mature western offshore fields, including Mumbai High, with BP under technical service agreements is expected to boost recovery in the next two to three years. CLSA analysts see potential for ONGC's stock to reach ₹440 from current levels, even if crude oil prices are $90 per barrel. Oil India's management expects FY26 production to surpass FY25 levels and has provided oil production targets for FY27 and FY28 indicating continued expansion. The sector outlook remains positive, especially with no immediate threat of windfall taxes.