New Delhi : State-owned Oil and Natural Gas Corp reported a 28 per cent jump in December quarter as rupee depreciation against US dollar helped it realise more revenues, which neutralised a near record subsidy payout.
Net profit in October-December rose to Rs 7,126 crore from Rs 5,563 crore a year ago, ONGC Chairman and Managing Director Sudhir Vasudeva said. ONGC paid Rs 13,764 crore in the third quarter to help fuel retailer sell diesel and cooking fuel at rates below cost, 10.7 per cent more than Rs 12,433 crore in the same period a year ago. The subsidy payout was near the record payout of Rs 13,796 crore in July-September quarter of this fiscal.
“Despite heavy load of subsidy, profits registered a good growth mainly due to rupee depreciation,” he said.
ONGC gets paid for the crude oil and natural gas it produces in US dollar and depreciation of rupee brings in more revenues for it. The average exchange rate in third quarter was Rs 62.03 to a US dollar as compared to Rs 54.14 a year ago.
Net profit, he said, net profit would have been higher by Rs 7,649 crore if it was not forced to pay subsidy, he said. ONGC sold crude oil at a gross rate of USD 108.18 per barrel as against USD 110.13 in third quarter of last fiscal. After paying for fuel subsidy, its net realisation fell to USD 45.98 per barrel from USD 47.94 a year ago.
In rupee terms, however, its net realisation was Rs 2,852 per barrel in Q3 as compared to Rs 2,595 crore in last fiscal. Vasudeva said crude oil production was almost flat at 6.1 million tonnes while natural gas output fell by close to a per cent to 6.285 million cubic metres.
ONGC’s profit also soared because other income doubled on account of a provision writeback.
The company wrote back Rs 2,500 crore of tax provisions it made in earlier quarters on fuel subsidy it had to pay. Vasudeva said the company made four oil and gas discoveries during the third quarter.
With domestic gas prices set to increase from April, Oil and Natural Gas Corp Ltd has put it plan to develop discoveries in its blocks in the Krishna-Godavari basin on fast track, hoping to start output
by as early as 2016, a senior official told Cogencis.
“Suddenly it will be more viable than what it was at $4.2 (per mscmd),” the official said. “We have just submitted declaration of commerciality now.” Earlier, the company was targeting production from KG-DWN-98/2 and G4 gas fields in the KG basin by 2018. Both blocks are adjacent to Reliance Industries Ltd’s KG-D6 block in offshore Andhra Pradesh.
The official said the company is now starting work to prepare a field development plan for the KG-DWN-98/2 block even before the declaration of commerciality is approved by the Directorate General of Hydrocarbons.
Last year, the government approved a new dynamic pricing mechanism for domestically produced gas, which will be come into effect from Apr 1 and may double the existing price of $4.2 per mBtu. -Cogencis/PTI