State-owned Oil and Natural Gas Corporation (ONGC) reported a 20% drop in September quarter net profit on decline in oil costs and lower output.
The firm reported a net profit of ₹10,216 crore in July-September (second quarter of present 2023-24 fiscal 12 months), in comparison with ₹12,826 crore incomes in the identical interval the sooner 12 months, a press release mentioned.
This is the second consecutive quarter of a decline in net profit for ONGC, India’s prime crude oil and pure gasoline producer. The agency had reported a 34% drop in April-June profit.
ONGC earned $84.84 for each barrel of crude oil it produced and bought from nomination fields towards a gross realisation of $95.50 per barrel final 12 months and $76.49 within the previous quarter.
Oil costs globally had risen sharply in April-June 2022, after Russia’s invasion of Ukraine led to uncertainties over provide and demand. Rates have cooled this 12 months. They have been within the $80-90 vary within the second quarter.
ONGC Director (Finance) Pomila Jaspal mentioned the primary cause for the decline in net profit is lower oil costs.
Also, oil and gasoline manufacturing was barely lower than final 12 months. This will, nonetheless, reverse within the present quarter (October-December), as the corporate brings to manufacturing a prolific oilfield within the KG basin.
“We will be starting production from KG-DWN-98/2 this month and this will help raise the output and thereby earnings,” she mentioned.
Last 12 months, the corporate had a ₹1,900 crore reversal of impairment which had boosted earnings. This 12 months there isn’t a such distinctive revenue.
Crude oil pumped out of the bottom under and seabed is refined in refineries to provide petrol, diesel and different fuels. Natural gasoline is used to generate electrical energy in addition to to burn kitchen stoves and run cars (CNG).
Gross income fell 8.2% to ₹35,162 crore primarily as a result of it realised lower oil costs.
ONGC mentioned crude oil manufacturing was 1.9% lower at 4.54 million tonnes, whereas gasoline output fell 3% to five.01 billion cubic meters.
“The reduction in production output can primarily be attributed to a decline in some of the matured fields and marginal fields. To counter this decline, ONGC is taking proactive steps by implementing well interventions and advancing new well drilling activities within these fields,” the assertion mentioned.
Furthermore, in a bid to bolster evacuation capacities and to modernize offshore amenities, a shutdown was undertaken in Panna-Mukta for the commissioning of a brand new crude oil pipeline, submit taking on from three way partnership Partner. The shutdown resulted in a brief lack of manufacturing.
“Another factor impacting production was Cyclone Biparjoy which struck in June 2023. This event disrupted both offshore and onshore production operations.
“Further, oil manufacturing of a Southern Asset was hampered as a result of stoppage of wells brought on by the cessation of crude oil receipts by a refinery, following a leak in its pipeline. ONGC, nonetheless, acted swiftly and devised an alternate methodology for the evacuation of crude oil via tankers, thus resuming manufacturing,” it added.
The present decline in manufacturing from matured fields will likely be compensated within the upcoming quarters with the graduation of further manufacturing from upcoming tasks, that are underneath varied levels of growth.
Jaspal mentioned the present decline in manufacturing is short-term and the identical will likely be compensated in upcoming quarters with the graduation of further manufacturing from new tasks; particularly by crude oil manufacturing graduation from KG-DWN-98/2 in Q3 2023-24.
ONGC mentioned it made 5 discoveries (02 in Onland and 03 in Offshore) throughout FY 2023-24 in its operated acreages.
