Kolkata, Sept. 8
THE ONGC Chairman, Mr Subir Raha, today said that crude prices are unlikely to come down. He was speaking to newspersons after meeting the Chief Minister, Mr Buddhadeb Bhattacharjee.
"I personally feel that the oil prices should remain firm in the winter ahead," he said when asked whether crude prices are likely to come down in the immediate future.
Though still unaware of the quantum of subsidy burden the company will have to bear in the second quarter, Mr Raha made it clear that the high subsidy burden hampers the company's turnover and profitability. ONGC had to foot a subsidy bill of Rs 2,860 crore as price discount to oil marketing companies in the first quarter of 2005-06. This was against a subsidy of Rs 4,104 crore in the whole of 2004-05 and Rs 2,690 crore in 2003-04.
Realisation for domestic crude dropped by 56 per cent, from $37 a barrel in the first quarter of 2004-05 to just $16 a barrel in April-June 2006.
The average India-basket crude price during the first quarter of this year was $50 a barrel. Though ONGC was able to register a rise in net profit, the high subsidy had impacted the net profit of the first quarter by a clear Rs 1,900 crore.
On the prospects of striking oil in the Bengal-offshore where the company is currently carrying out exploratory drilling, he said: "We are expecting to arrive at a conclusion on the same in the next two weeks." Expecting a rise in activity in Kolkata in view of the exploratory drilling in Bengal off-shore, exploration and development of coal bed methane projects and proposed exploratory drilling for oil and gas in Mahanadi off-shore blocks, ONGC had sought five acres at New Town area in Kolkata to set up its regional office and integrated data processing centre.