ONGC net surges 230% to Rs 18,749 crore on tax gains

Its natural gas output fell 7% year-on-year (y-o-y) to 5.5 billion cubic metres. On a standalone basis, ONGC’s realisation from crude oil from its nominated fields increased 67.6% to $69.4 per barrel during the September quarter, compared with the year-ago period.

Oil and Natural Gas Corporation (ONGC) reported a profit of Rs 18,749.2 crore on a consolidated basis for the quarter ended September, 230.4% higher than the profit made in the same period a year ago, mainly on the state-run oil and gas producing company opting for a lower tax regime which resulted in Rs 8,715.7 crore reduction in tax incidence. The company’s board, on Friday, also declared an interim dividend of Rs 5.50 on each equity share of Rs 5 for FY22.

The company, which produces about 65% of domestic crude oil, supplied 5.5 million tonne (MT) of crude oil in the quarter from its ageing oilfields, recording an annual drop of 3.8%.

Its natural gas output fell 7% year-on-year (y-o-y) to 5.5 billion cubic metres. On a standalone basis, ONGC’s realisation from crude oil from its nominated fields increased 67.6% to $69.4 per barrel during the September quarter, compared with the year-ago period.

Gross revenue was up 44.3% y-o-y to Rs 1.2 lakh crore in the quarter, while expenses increased by a sharper 46.2% to Rs 1.1 lakh crore.

As FE recently reported, the Union ministry of petroleum and natural gas (MoPNG) has asked ONGC to consider divesting 60% stake in the country’s largest producing oil and gas assets in Mumbai offshore. Pointing out that ONGC’s contribution in the country’s crude oil consumption has “declined drastically to a paltry 9%” in FY21, MoPNG said that “there is an urgency for ONGC now, to prepare a 25 years energy plan to remain a flag-bearer on energy front”, adding that to expand exploration sector in the country and increase its own capital efficiency, ONGC must divest its drilling and well services arms by various modes including start-ups and investment trusts.

On natural gas output front, production commenced on August 31 from ONGC’s U1B deep-water gas located in KG-DWN 98/2 block, which has an estimated peak production of 1.2 million standard cubic meters per day.

Owing to high global spot gas rates, the ceiling price for gas produced from such difficult fields has been raised by 69% to $6.13/mbtu by the government, effective from Q3FY22.The company said that production of crude oil and gas has declined during current year mainly due to restrictive conditions created by cyclone Tauktae and Covid impact.