ONGC Q3 profit falls 14% to Rs 9,536 crore on lower oil prices

New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) on Sunday reported 14 per cent drop in net profit for the third quarter ended December 31 as oil and gas prices fell.

Standalone net profit of Rs 9,536 crore in October-December 2023 (third quarter of 2023-24 fiscal year) was 13.7 per cent lower than Rs 11,045 crore earning in the same period of previous financial year, the company said in a statement.

The earning was lower as price realised for crude oil the firm produced and sold in the quarter fell 6.4 per cent to  $81.59 per barrel. Gas price too was 24.2 per cent lower at $6.5 per mmBtu.

Also contributing to lower profit was a decline in production of crude oil, which is converted into fuel like petrol and diesel at refineries, and natural gas which is used to generate electricity, produce fertilizer, turned into CNG and piped to kitchens for cooking.

Crude oil production dropped 3.3 per cent to 5.22 million tonne while gas output was 4.3 per cent lower at 5.12 billion cubic meters.

Gross revenue was down 10 per cent at Rs 34,789 crore in Q3.

The board of the company approved a second interim dividend of 80 per cent or Rs 4 a share. "The total payout on this account will be Rs 5,032 crore," the statement said.

This is in addition to the first interim dividend of Rs 5.75 per share declared in November last year.

ONGC's standalone net profit in the first nine months of the current fiscal fell 24 per cent to Rs 29,767 crore as oil price realised dropped to USD 75.55 a barrel from USD 97.10. Gas price realised too was 5 per cent lower at USD 6.57 per million British thermal unit.

The nine-month production too was lower.

"The reduction in ONGC's production output in first nine months of FY 2023-24 was due to shutdown in Panna-Mukta offshore platforms for commissioning of new crude oil pipeline to modernise its evacuation facilities, and Cyclone Biparjoy (in June 2023) disrupting offshore and onshore production," ONGC said adding crude oil production of a southern field was hampered as a refinery stopped receiving oil, following a leakage in their pipeline.

To counter the decline in production from some of the matured and marginal fields, ONGC is taking proactive steps by implementing well interventions and advancing new well drilling activities.

"The decline in production from matured fields will be compensated in upcoming quarters with commencement of additional production from upcoming projects, which are under various stages of development," the firm said adding crude oil production has already commenced from KG-DWN-98/2 Block on January 7, 2024.

ONGC said it made nine oil and gas discoveries in the current fiscal. Five of these discoveries are offshore and the remaining are onland.

Besides start of oil production from the deep-water KG-DWN-98/2 block in Bay of Bengal, other highlight was Mandapeta field of Rajahmundry Asset crossing 1.0 million standard cubic meters per day of gas production mark on October 5, 2023 - the highest-ever since inception of the field in 1994, through reservoir characterization & proper well placement, high-volume fracking and timely augmentation of production facilities.

ONGC said it also received approval to form a 100 per cent subsidiary company for green energy and gas business. The wholly-owned subsidiary company shall pursue green hydrogen, hydrogen blending, renewable energy (solar, wind and hybrid), biofuels/ biogas business and LNG.