Country’s largest explorer ONGC on Monday reported 17.5 per cent drop in its net profit during October-December 2012 against the corresponding period last year.
The profit was impacted due higher subsidy outgo and cess.
The explorer registered Rs 5,563 crore as net profit in the third quarter of the current year against Rs 6,741 crore in the corresponding quarter previous year, it said in a statement.
The impact of subsidy on the performance was Rs 7,260 crore during the quarter (against Rs 7,172 crore).
In the third quarter of previous financial year, ONGC received Rs 3,142 crore as extraordinary income for cost-recovery from the Rajasthan asset.
The company forked out subsidy of Rs 12,433 crore (Rs 12,536 crore) in the third quarter of the fiscal.
ONGC sold every barrel of crude oil for $110.16 ($111.48 a barrel). But after sharing subsidy burden, net realisation on every barrel came down to $47.97 ($44.71 a barrel).
“Today, cost of production is $42 a barrel,” said Sudhir Vasudeva, Chairman and Managing Director.
A.K. Banerjee, Director Finance, said the increase in cess levied by the Government has also impacted the profit.
The company’s cess outgo has increased by 80 per cent. “Had it not been for the Rs 1,254-crore gain due to exchange rate, our profits would have declined further,” he said.
ONGC’s crude oil production was down 3.02 per cent to 6.055 million tonnes (mt) against 6.244 mt in the same quarter last fiscal.
Natural gas production during the quarter was also affected in Mumbai High and Cauvery assets due to less offtake by the consumers.
Vasudeva said that the company may come out with a dollar bond issue later this month or early next month.
During the quarter, ONGC also notified six new oil and gas discoveries.