ONGC Chairman Arun Singh has told The Economic Times that lenders may soon be reluctant to fund oil and gas projects as it is considered a 'sin industry' and the company will soon have to generate enough cash to fund its business.
Rising concerns about climate change has prompted some capital providers in the developed world including banks and debt funds to to avoid funding projects with high emissions. However, in India the sector is not facing any major funding crunch but the fear around reluctant to fund oil and gas sector is growing, The ET report said quoting Singh.
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"You have to generate enough money from the existing business to fund your own business. You don't have a choice to get outside funds," Singh was quoted by ET as saying at its town hall.
Singh has been tasked to increase company's oil and gas production while ensuring that its investments are not stranded when demand shifts from oil and gas sector in future.
Meanwhile, he added that to generate surplus cash the company will need to contain costs.
ONGC Videsh, which has 32 projects in 15 countries is currently facing increased green scrutiny, the ET report added.
