India?s largest oil producer ONGC on Wednesday reported a net profit dip of 16% at Rs 2,207 crore for the fourth quarter of 2008-09, against a profit of Rs 2,627.10 crore in the year-ago period.
Sales for the period also plunged 17% at Rs 13,883.58 crore as against Rs 16,699.21 crore. The refiner, however, registered its highest turnover in 2008-09 at Rs109,294 crore, up 7.4 %, from Rs101,835 crore during the corresponding period last year. ONGC’s gross refining margin during the last quarter of 2008-09 was $47.85 a barrel as compared to $100.37 a barrel in the year-ago period.
Meanwhile, shares of the company were up 2.39% to close at Rs 1.051 on the Bombay Stock Exchange on Wednesday. The company declared a final dividend of Rs 14 per share for the 2008-09.
Recently, ONGC has struck oil and gas in three new blocks, one of these finds is the most significant in decades. The gas find at Krishna Godavari (K-G) basin off the Andhra coast could prove as rich as Reliance Industries’ D-6 block, which, at its peak, is expected to double India’s current natural gas output. The other two discoveries included an oil find in Charada-3 offshore block in Cambay basin and oil and gas find in Matar in Vadodara district, both in Gujarat.
However, going forward, ONGC will have to pay Rs 13,792 crore in royalty to the government on behalf of Cairn India in the prolific Rajasthan oilfields as the state-run firm has been made liable to pay statutory levies on total production irrespective of its stake. The company has 30% stake in the block RJ-ON-90/1 in Rajasthan but is liable to pay 20% royalty on the entire crude oil produced from the block.
Cairn India, which is the operator of the block with a 70% stake, does not have to pay any royalty. At $50 per barrel crude oil price, the royalty outgo over the entire life of the field would be Rs 16,209 crore – Rs 4,862.7 crore on its share and Rs 11,346.3 crore on behalf Cairn. At $60 a barrel oil price total outgo on royalty would rise to Rs 19,703 crore while at $70 per barrel price, it will be Rs 23,196 crore, the official said.
Additionally, ONGC will have to pay Rs 2,500 crore per tonne cess on crude oil. But unlike royalty, the cess liability would be limited to its shareholding.
