India’s top oil and gas producer ONGC is planning to set up two oil-to-chemical plants in India to convert crude oil directly into high-value chemical products as it prepares for an energy transition that is shaking up the industry worldwide, chairman Arun Kumar Singh said.

Crude oil, which companies like ONGC pump out from below the seabed and from underground reservoirs, is a primary source of energy. It is processed in oil refineries to produce petrol, diesel and jet fuel. With the world looking to transition away from fossil fuel, companies around the globe are looking at new avenues to use crude oil.

Petrochemicals are chemical products derived from crude oil and are used in the manufacturing of detergents, fibres (polyester, nylon, acrylic etc.), polythene and other man-made plastics.

“The demand for petrochemicals is expected to remain strong and will continue to be a key driver of oil and gas demand in the future,” Singh said in the firm’s latest annual report.

“With this objective, ONGC is collaborating with other entities to explore opportunities in the oil to chemical (O2C), refining, and petrochemicals. We are also planning to set up two greenfield O2C plants in India.”

He, however, did not give details.

The firm already has two subsidiaries, Mangalore Refinery and Petrochemicals Limited and ONGC Petro-Additions Limited, that run petrochemical units at Mangalore in Karnataka and Dahej in Gujarat, respectively.

“MRPL and OPaL are strongly engaged in the diversification plan from oil to the petro-chemical sector,” Oil and Natural Gas Corporation (ONGC) said in the 2022-23 annual report.

“ONGC is also partnering with players to explore opportunities in the Oil to Chemical (O2C) and Oil to Petrochemicals (O2P).”