State-owned Oil and Natural Gas Corporation (ONGC) reported a 28% year-on-year (y-o-y) jump in net profit to R7,126 crore for the October- December quarter boosted by a surge in other income and the depreciation of rupee against dollar. The sales revenue however fell 1.2% y-o-y to R20,833 crore.
The company wrote back R2,500 crore of tax provisions it had made in previous quarters towards the crude oil discounts it offers refiners. ONGC has asked the oil ministry to review the oil retailers decision to claim tax discounts on crude sales. Other income was up 108% y-o-y to R2,662.33 crore.
The growth in ONGC profit was despite a 11% rise in the subsidy burden over the previous year which stood at R13,764 crore. ?Despite heavy subsidy burden, profits registered a growth mainly due to rupee depreciation,? said ONGC chairman Sudhir Vasudeva.
ONGC gets paid for the crude oil and natural gas it produces in the US dollars and depreciation of rupee brings in more revenues in rupee terms. The average exchange rate in third quarter was R62.03 to a US dollar compared with R54.14 a year ago.
ONGC?s gross realisation on the sales of sold crude in the quarter stood at $108.18 per barrel against $110.13 in the third quarter of last fiscal. After paying for fuel subsidy, its net realisation fell to $45.98 a barrel from $47.94 a year ago. In rupee terms, however, its net realisation was R2,852 per barrel in Q3 compared with R2,595 crore in last fiscal.
Vasudeva said crude oil production was almost flat at 6.1 million tonnes while natural gas output fell by close to 1% to 6.285 million standard cubic metres per day (mmscmd). ?With around 75% of our fields in the 35-50 years range the production has been falling rapidly. However we expect strong gas production between 2014-19 on account of several marginal fields coming on stream. Also the KG basin 98/2 discovery which holds around 4.85 tcf of gas and 100 mmt of oil will commence production,? said Vasudeva. ONGC made 4 new oil and gas discoveries during the quarter.
