ONGC Trims Dividend As Bottomline Takes A Hit

New Delhi, Sept 29 | Updated: Sep 30 2004, 05:30am hrs
A 17.7% drop in net profit from Rs 10,529 crore to Rs 8,664 crore has forced Oil and Natural Gas Corporation (ONGC) to reduce dividend from 300% in 2002-03 to 240% for 2003-04. The outflow towards dividend will be Rs 3,422 crore as against Rs 4,278 crore in the previous financial year.

Addressing newspersons on Wednesday, Subir Raha, the Chairman and Managing Director of ONGC, attributed fall in profit to the subsidy paid by the corporation to oil marketing companies by way of discounts in prices of crude oil, LPG and kerosene amounting to Rs 2,690 crore. This was done on administrative instructions of the government. The other reason which affected the bottomline of the ONGC, he said, was appreciation of rupee vis-a-vis dollar.

The payment of final dividend at Rs 24 per share was approved by the 11th annual general meeting of the corporation held on Wednesday. ONGC had earlier declared an interim dividend of 140% envisaging an outflow of Rs 1,996 crore. The interim dividend was paid in February 2004.

The total dividend will be exclusive of dividend tax amounting to Rs 438.5 crore.

On physical performance, Mr Raha said the production of crude oil during 2003-04 rose to 27.72 million metric tonne from 27.57 million metric tonne in 2002-03. The company produced 25.70 billion cubic meters natural gas.

On retail marketing of petrol, Mr Raha said, ONGC has acquired land for opening petrol pumps across the country but initially less than 10 stations would come up in various locations of the country.

We have found land for the purpose and we would be opening petrol pumps in the year 2004-05, Mr Raha disclosed. Mr Raha said the pumps would receive supply from the Mangalore Refinery and Petrochemicals Ltd.

On the problem of oil pricing in India, he said the country was not self-sufficient in oil and had to be import-dependent. He suggested that the wells which were not considered economically viable in ONGCs scale of production in a lower price environment be given for service contracts.