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ONGC net dips 24% on subsidy payout
Our Bureau
New Delhi, July 29
Higher subsidy payout pulled down ONGC's net profit by 24.5 per cent in the first quarter of the current fiscal. The company's net profit for the quarter stood at Rs 3,661 crore against Rs 4,848 crore in the same quarter last year.
ONGC's sales revenue for
the quarter dropped 8.1 per
cent at Rs 13,710 crore (Rs
14,922 crore). Speaking to
newspersons after the board
meeting, the Chairman and
Managing Director, Mr R.S.
Sharma, said that "a well-defined
equitable mechanism
for subsidy discounts would
ensure much higher commercial
values."
ONGC paid Rs 5,515 crore
towards fuel subsidy in the
April-June quarter (Rs 429
crore). Upstream companies
such as ONGC, Oil India and
GAIL (India) have to extend
discounts on crude oil and
product sales to public sector
oil marketing companies as
part of the Government's
mechanism to compensate
the retailers for selling auto
and cooking fuels below the
market price. ONGC's net realisation
on crude oil sale
was $48.04 a barrel ($58.25).
Mr Sharma said that
ONGC earned Rs 862 crore
less revenues during the
quarter under review due to
exchange rate variations.
"We lost Rs 3 a dollar," he
explained.
However, the recent increase
in the price of the gas
sold under the Administered
Price Mechanism helped the
company earn about Rs 539
crore additional revenues.
The company's board also
approved two investment
proposals, Mr Sharma said. A
proposal to set up 102 MW
wind power farm in Rajasthan
at an estimated investment
of Rs 650 crore also got
the board's nod. The project
is expected to be commissioned
by September 2011.
The board also approved investments for a single point mooring off Mangalore coast for Rs 1,044 crore, which will enable MRPL receive oil crude through very large crude carriers. The completion target for the project is April 2012.
Mr Sharma said ONGC expects to reach a gas production target of 100 mscmd by 2016 from the current 62 mscmd with its East Coast gas production as well as Daman offshore, B-12 and C-24 assets.
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