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ONGC net drops 10% on oil price slump

ONGC net drops 10% on oil price slump

State-owned Oil and Natural Gas Corp (ONGC)  today reported a sharp 10 percent drop in its July-September net profit, the first decline in five quarters, after global oil prices slumped.

Net profit in July-September at Rs 5,444.89 crore was 10.2 percent lower than Rs 6,063.86 crore net profit in the same period a year ago, the company said in a statement.

ONGC earned USD 102.13 for every barrel of crude oil it produced in second quarter, down from USD 109.03 a year ago.

After paying for fuel subsidy, its net earning was USD 41.35 per barrel as opposed to USD 44.86 in second quarter of last fiscal.

The company doled out Rs 13,641 crore to partly subsidise diesel and cooking fuel in the quarter. This dented its profitability by Rs 11,581 crore, the statement said. 

Brent crude has dropped 30 percent this year to the lowest price in more than four years, reducing earnings for oil producers.

Brent, a benchmark for more than half the world’s crude, slumped to USD 78.50 a barrel today.

ONGC said its oil production rose 2.08 per cent to 5.206 million tons but gas output dipped 8.41 percent to 5.327 billion cubic meters mainly because it had to shutdown some of its fields in the KG basin following a pipeline of transporter GAIL being damaged in a blast.

Turnover fell 8.7 percent to Rs 20,447.76 crore. 

ONGC shares closed 2.05 per cent higher on the at Rs 393.35.

The company said it made two new discoveries in shallow waters off Gujarat coast and in Assam basin. The well GKS092NAA-1 in NELP block GK-OSN-2009/2 at Kutch offshore shallow water flowed gas at the rate of 1,15,168 cubic meters per day during tests.

“This new discovery has provided lead for further exploration in the block,” it said.

The block is operated by ONGC (40 percent), while other partners are Adani Welspun Exploration Ltd (30 percent) and Indian Oil Corp (30 percent).

In Rudrasagar block in the North Assam Shelf, a new pool of oil was found. “This discovery will provide lead for the field growth towards south-west part of the main Rudrasagar field,” the statement said. 

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