Rangarajan proposal to bring relief to ONGC
If the panel’s recommendation is implemented, ONGC’s gas revenues will nearly double at current levels of production. Senior analyst at Nirmal Bang Institutional Equities Ashutosh Bharadwaj said: “According to rough estimates, the current blended gas realisation per quarter at $4.5 per mmBtu is R4,000 crore. The acceptance of the panel recommendations will give an incremental gas revenues of R3,000 crore per quarter or R12,000 crore annually to ONGC.”
ONGC now gets a price of $4.2 for its nominated blocks, at par with Reliance’s KG-D6 gas (the price of APM gas produced by national oil firms was revised to $4.2 per mmBtu a couple of years ago).
The company charges $5.65 for the gas produced from the Panna Mukta and Tapti fields.
According to industry estimates, the lifting cost (cost of production) of ONGC is $5.2/boe (barrels of oil equivalent). The cost of gas production is approximately $1/mmBtu.
ONGC's subsidy bill more than doubled to R12,330 crore in the second quarter of this fiscal, from R5,713 crore in the same period last year. Its post-tax profit dropped 32% to R5,897 crore. The company has expressed concern over having to take a higher share
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