India's ONGC to invest in nuclear plants

Oil & Natural Gas Corporation plans to invest in nuclear plants in India and has started mining for uranium to counter declining crude production.

The company is in talks with Nuclear Power Corp. of India, the state-owned monopoly, on a potential partnership, ONGC Chairman A.K. Hazarika said by telephone from New Delhi.

“It’s very much a demand story and we would want to be helping meet most of India’s energy demand,” Hazarika said. “We are looking to get into related businesses for our next phase of growth.”

 Asia’s third-biggest economy reaffirmed plans to boost nuclear power generation about 13-fold by 2030 to bridge an energy shortfall after conducting a safety review that was triggered by Japan’s Fukushima disaster.

“Given India’s power demand and ONGC’s own declining oil production, nuclear is an opportunity,” said Alok Deshpande, a Mumbai-based analyst at Elara Securities Ltd., which has an “accumulate” rating on ONGC shares. “Rewards may only start coming in the long term because the process of setting up nuclear plants is long and very highly regulated.”

ONGC may buy stakes in Nuclear Power’s projects and hasn’t decided if it will invest in existing stations or planned ones, Hazarika said. Indian Oil Corp., the nation’s biggest crude oil refiner, will invest 9.61 billion rupees or US $216 million in a plant being built with Nuclear Power.

ONGC hasn’t ascertained the size of its planned investment, Hazarika said.g to get into all kinds of clean energy businesses.”

The state-run company has started mining for uranium in the Cauvery area in the south Indian state of Tamil Nadu in partnership with Uranium Corp. of India and plans to explore in Andhra Pradesh state, he said. ONGC approved a plan to build a 102 megawatt wind farm in Rajasthan state, the company said in July last year. The government may ask the company to work on the nation’s first offshore wind project, Renewable Energy Ministry Secretary Deepak Gupta said Feb. 17.