Shares of ONGC (Oil and Natural Gas Corporation) traded flat even the oil and gas company signed six contracts for discovered small fields (DSF), with 3 each for fields in the Arabian Sea and Bay of Bengal. 

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Besides, the company said that it has also signed 2 contracts for fields under special CBM Bid round-2021 blocks in Jharkhand and Madhya Pradesh.  

The oil & gas stock was trading flat at Rs 134 per share in BSE intraday trade on Monday. The stock dropped around four per cent in the past one month as crude prices fell to seven-month lows. The counter has declined nearly 20% in the past three months, while one year-return, as on September 12, stood around 10 per cent.  

"The correction in crude prices was on account of a possible recessionary scenario in the west, weak economic data from China (world’s second largest oil consumer), coupled with anticipated interest rate hikes hinting lower fuel demand," as per ICICI Direct.  

The brokerage says fall in oil prices will have a limited impact on the net realisation of PSU upstream companies such as ONGC. "The impact on midstream companies will be neutral," it said.  

As per ICICI Direct, his would improve the marketing margins for OMCs like IOCL, BPCL, HPCL as their marketing profitability may improve.  

For ONGC, the brokerage recommended a 'Hold' with a target price of Rs 140.  

Earlier, the DSF-III bid round 2021 was launched by Government of India on 10 June 2021. A total of 75 fields (Nomination & PSC Regime) under the Discovered Small Field Policy were clubbed in 32 Contract Areas (11 Onland and 21 Offshore) for offer under DSF-III.  

ONGC participated in the bidding and subsequently won 6 contract areas. These include 4 contract areas as sole bidder and 2 contract areas in partnership with Indian Oil Corporation Limited (IOCL).