ONGC’s net profit for the fourth quarter of FY16 rose 12.2 per cent to ₹4,416.11 crore, against ₹3,935.07 crore in the previous-year period.

The increase was due to a ₹850-crore reversal in impairment charge incurred by the company last year and the exemption from the government to pay any subsidy for the second quarter of FY16, according to DK Sarraf, Chairman and Managing Director.

The company’s total income from operations during the quarter fell 24.3 per cent to ₹16,424 crore (₹21,683 crore).

According to Sarraf, the exemption in the subsidy was due to low crude oil prices prevailing in the second quarter. Operationally, the company’s crude oil production fell 1.7 per cent to 6.34 million tons and natural gas output also dropped nearly 10 per cent to 5.24 billion cubic meters during the quarter.

“We expect that oil and gas production will increase next year as many of the projects we had undertaken last year will be complete,” said Sarraf.

Capex target The company has a capital expenditure target of around ₹30,000 crore for FY17.

“Our capital expenditure is not dependent on crude oil prices. However, when prices are low, the cost of services and equipment is also low. Therefore, even if the capital expenditure comes down, the actual physical work remains the same,” Sarraf added.

Commenting on the auctions for discovered small fields, he said: “Our team has started studying them. We are just refreshing our old workings since we used to own most of them. With the new fiscal regime some of them may fall within our bidding parameters.”

On Thursday, the company's shares closed 3.09 per cent higher on the BSE at ₹216.70.

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