Government-owned upstream oil giant ONGC is looking at investing around Rs 1 lakh crore to diversify into the manufacturing of petrochemicals to move up the value chain from crude oil, senior company executives said in a conference call.

ONGC Director, Finance, Pomila Jaspal said the company is looking to build separate oil-to-chemical (O2C) projects.

ONGC’s Executive Director and chief of Joint Ventures & Business Development, D. Adhikari, said: “Our plan is to raise petrochemical capacity to 8.5-9 million tonnes by 2030.”

Demand for petrochemicals, used as inputs for making plastics, fertilisers, and pharmaceuticals, is expected to remain robust due to their wide range of uses across large industries, including construction, automobiles and electronics. Strengthening its chemicals business will help ONGC to improve profitability as it moves up the value chain.

ONGC already has two subsidiaries — Mangalore Refinery and Petrochemicals Ltd (MRPL) and ONGC Petro-Additions Ltd (OPaL) that run petrochemical units at Mangaluru in Karnataka and Dahej in Gujarat, respectively.

While MRPL is a profit-making entity, OPaL has a “distorted” capital structure, Adhikari said.

To correct this, the ONGC board has approved infusing Rs 18,355 crore capital in OPaL to raise its stake in the firm to over 96 per cent from 49.35 per cent at present, Adhikari added.

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