Shares of Oil and Natural Gas Corporation (ONGC) remained in focus on Tuesday, May 26, ahead of the company’s Q4 FY26 earnings announcement, supported by positive brokerage commentary and expectations of long-term production growth from its Western Offshore basin partnership with BP Plc.
At around 9:25 AM, ONGC shares were trading 1.16% higher at Rs 288.25 on the NSE.
Morgan Stanley maintained its “Overweight” rating on ONGC with a target price of Rs 363, while UBS retained its “Buy” rating with a target price of Rs 350. Brokerages turned constructive after ONGC selected a subsidiary of BP Plc as a technical service provider (TSP) for its entire Western Offshore basin, one of the company’s most important producing assets comprising 43 blocks.
According to estimates shared by the technical service provider, the partnership could help increase crude oil production by 10.8% and gas output by 31.5%, translating into an overall production increase of 24.1% over the 10-year contract period.
Morgan Stanley noted that ONGC is targeting oil production growth of 11% to 51 million metric tonnes over the next decade, while gas production could rise 32% to 109 bcm during the contract period. The brokerage also highlighted that ONGC has reduced its natural offshore decline rate to 4% from the historical 7.5% through infill drilling initiatives.
Brokerages believe the BP partnership could emerge as a key catalyst for the stock beginning this year, especially as India continues to focus on strengthening domestic energy security and reducing import dependence.
Analysts also expect higher domestic gas realizations and lower royalty burdens to support ONGC’s earnings outlook in the coming quarters.
Investors will now closely track ONGC’s Q4 FY26 results later today for updates on production trends, realizations, capex plans and management commentary on the BP-led offshore expansion strategy.
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