Private explorer Cairn India on Wednesday reported 70.45% drop in its net profit during the July-September quarter of FY16 mainly due to decline in crude prices. The Vedanta group company reported net profit of Rs 673 crore in the second quarter of FY16 against Rs 2,278 crore in the corresponding quarter in the previous year.
Cairn India said in a statement that the net revenue for Q2FY16 was reported at Rs 2,242 crore, a 44% year-on-year decline due to fall in crude prices and increase in discounts on Brent for Rajasthan crude. The crude oil produced from Barmer block in Rajasthan is sold to Indian refiners at a discount to the benchmark Brent. The production for the country’s largest onshore rose by 3% y-o-y to 168,126 barrels of oil equivalent per day (boepd) during July-September FY16. The average Brent prices fell 18% quarter on quarter to $50.5/ barrel driving our average oil realisation down by 22% q-o-q to $43.7/barrel. Discount to Brent for Rajasthan crude widened to 14.3% from 9.9% on sequential basis due to lower demand for heavy crude, it said.
Cairn said that the firm continues to maintain low water-flood operating cost at Rajasthan at $5.5 per barrel of oil equivalent (boe) aided by reduction in crude processing and facility maintenance costs. The water-flood operating cost was slightly up by 4% q-o-q from $5.2/boe in Q1FY16 due to lower production volumes resulting into increase in cost per unit. Ramp-up in the polymer injection volumes also lifted the blended operating cost by 11% q-o-q to $ 6.4/boe.
During Q2FY16, Cairn had a gross production of 18.9 million barrels of oil equivalent (mmboe) from its three producing blocks where it enjoys 100% operatorship, of which net working interest production was 11.8 mmboe.