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Oil India reported a 95 per cent dip in net profit at ₹19.31 crore for the fourth quarter of 2016-17.
Net profit in the fourth quarter of 2015-16 stood at ₹470.13 crore.
The steep fall in bottomline is attributed to the higher royalty outgo of ₹1151.73 crore to the Assam and Arunachal Pradesh governments.
In addition, the company also accounted for a higher wage payout of ₹660.26 crore. An OIL official said the wage pay revision was an one-time outgo and will be close to ₹120 crore in subsequent quarters.
Oil India Chairman Utpal Bora told journalists that the company had produced the highest amount of natural gas in its history during 2016-2017.
Natural gas price He said: “Natural gas production for fiscal 2017 stood at 2,937 mmscm. This is 3.48 per cent higher than the production in fiscal 2016.”
The company’s bottomline was also hit by the reduction in natural gas price. In a press statement, OIL said that the lowering of gas price from $4.24/mBtu in 2015-2016 to $2.78/mBtu in 2016-2017 contributed to the reduction in profit after tax.
OIL is incurring a cost of production close to $2.48/mBtu on gas production and the price of domestically produced gas has been lowered further to $2.50/mBtu in October 2016.
Meanwhile, the company’s board recommended a final dividend of ₹4.75 per share.
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