New Delhi: The board of Oil and Natural Gas Corporation (ONGC) approved a parent company guarantee of USD 500 million in favour of Saudi Aramco at its meeting on July 28, backing crude oil imports by its subsidiary Mangalore Refinery and Petrochemicals Limited (MRPL). The guarantee runs for two years, from September 1 to August 31, 2028.
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In its outcome-of-board-meeting intimation to the stock exchanges, ONGC said its board "has inter-alia approved the proposal to provide Parent Company Guarantee (PCG) of USD 500 million in favour of Saudi Arabian Oil Company (Saudi Aramco) for the period 01.09.2026 to 31.08.2028 on behalf of Mangalore Refinery and Petrochemicals Limited (MRPL), to enable MRPL to import crude oil from Saudi Aramco."
A parent company guarantee has ONGC stand behind MRPL's payment obligations to the supplier, allowing the refiner to secure crude supply from Saudi Aramco without posting its own security. The USD 500 million figure is the ceiling of that contingent backing over the two-year term, not a cash outlay by ONGC. The filing does not disclose the crude volumes, pricing, or contract terms the guarantee supports.
ONGC directly holds 71.63 percent of MRPL and is its promoter; ONGC and its subsidiary Hindustan Petroleum Corporation Ltd (HPCL) together held 88.58 percent of MRPL's paid-up capital as on March 31, 2026.
MRPL, which operates a refinery on the Karnataka coast, has been a term buyer of Saudi crude for years. In 2018, the company cut its annual term deal with Saudi Aramco by about 22 percent to 70,000 barrels per day, with sources at the time citing the supplier's insistence on guarantees for oil purchases. The current PCG formalises that backing for the September 2026 to August 2028 window.
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On its latest reported earnings, ONGC posted a 3.1 percent rise in standalone net profit to Rs 6,649.97 crore in Q4 FY26, against Rs 6,448.28 crore in Q4 FY25.
