ONGC net dips 17% to Rs.5,563 cr as output falls

Written by Agencies | New Delhi | Updated: Feb 12 2013, 06:11am hrs
Oil and Natural Gas Corp (ONGC) on Monday reported 17.5% drop in net profit for its third quarter ended December as crude oil output fell.

Net profit at R5,563 crore during October-December, 2012-13 was lower than R6,741 crore in the year-ago period, ONGC chairman and managing director Sudhir Vasudeva told reporters here.

Vasudeva said the profit in Q3 last year was higher due to R3,142 crore one-time exceptional income from cost recovery being allowed on royalty it paid on Cairn Indias Rajasthan oil block.

The benefit of the decision came for the full-year in that quarter and if this exceptional item was excluded, the quarter-on-quarter net profit should have been higher by R736 crore, he said. Also, ONGCs share in fuel subsidy was marginally lower at R12,433 crore, against R12,536 crore in October-December 2011-12.

Upstream firms like ONGC bear a portion of the losses retailers incur on selling diesel, domestic LPG and kerosene at government controlled rates. This they do by selling crude oil at discount to the refiners.

ONGC realised $47.97 per barrel after paying a discount out of $110.16 a barrel gross realisation. The net realisation was higher than $44.71 a barrel realised in Q3 last year.

Vasudeva said the net profit would have been higher by R7,260 crore if we were not to foot the subsidy bill.

ONGC produced 6.05 million tonne of crude oil in the third quarter, 3.02% lower than 6.244 MT output a year ago. Gas sales was almost unchanged at 5,026 million standard cubic meters while production of value added products was down 1% to 831 kilo tonne. The companys turnover was up 16% to R21,089 crore.

ONGC has been on a buying spree in recent months to secure interests in overseas oil and gas assets.

It agreed to pay $5 billion for ConocoPhillips 8.4% share of the Kashagan field in Kazakhstan in November, and months earlier signed a $1 billion deal for a small stake in oil fields in Azerbaijan.

The state explorer has also been investing to maintain output from its old fields in India and has lined up capital spending plans of around R34,000 crore for the next fiscal starting April.