India's Oil and Natural Gas Corporation (ONGC) has received government approval for an additional investment of Rs183.65bn ($2.19bn) into ONGC Petro additions Limited (OPaL).  

The investment will boost ONGC's stake in the petrochemical company, thereby strengthening OPaL's financial stability and operational efficiency. 

The approved funds will be allocated as additional equity capital of up to Rs105.01bn, conversion of Compulsorily Convertible Debentures amounting to Rs77.78bn, and a balance payment of Rs0.86bn for share warrants.  

This move will raise ONGC's stake in OPaL from 49.36% to 95.69%, according to an exchange filing by ONGC. 

OPaL, located in Dahej, Gujarat, operates a petrochemical complex and is claimed to have the largest standalone dual-feed cracker in Southeast Asia.  

Since its commissioning in 2017, OPaL has established a strong position in India's polymer market, with a 12% share, producing 1.5 million tonnes per annum (mtpa) of polymers and 0.5mtpa of chemicals. 

The government's approval to increase ONGC's equity in OPaL is anticipated to improve OPaL's capital structure and achieve a more balanced debt-to-equity ratio. 

With this capital infusion, ONGC's total investment in OPaL will reach Rs227.28bn. 

ONGC said that the government's approval ensures a continuous supply of gaseous feed to OPaL from ONGC's new gas fields, at a premium of up to 20% over the administered price mechanism gas price.  

This arrangement is anticipated to guarantee OPaL's consistent performance and aligns with ONGC's strategic objective of becoming an integrated global energy major. 

In a separate development, ONGC Videsh, the international arm of ONGC, recently expanded its portfolio by signing a sale purchase agreement with Equinor.  

The agreement involves acquiring a 0.615% participating interest in the Azeri Chirag Gunashli (ACG) oilfield and a 0.737% stake in the Baku Tbilisi Ceyhan (BTC) pipeline, both located offshore Azerbaijan.  

This enhances ONGC Videsh's existing stakes in the ACG field and BTC pipeline, furthering ONGC's global reach.