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Oil and Natural Gas Corporation (ONGC) on Thursday reported a threefold sequential growth in its consolidated net profit at ₹10,946 crore for the March quarter. Total income rose by 15 per cent quarter-on-quarter to ₹1,18,206 crore.
In the corresponding quarter of the previous fiscal year (2019-20), ONGC had reported a loss of ₹6,726 crore.
For the financial year 2020-21, profit grew by 86 per cent to ₹21,343 crore. Annual revenue, however, fell by 15 per cent to ₹3,69,895 crore. Total crude production declined by 3.5 per cent to 23.35 million tonnes. Gas production fell by 8.4 per cent to 24.9 bcm.
ONGC board, on Thursday, also recommended a final dividend of ₹1.85 per share for 2020-21. Total dividend for the year comes to ₹3.6 per share. Subsidiary Hindustan Petroleum Corporation had also declared a dividend of ₹22.75 per share for the year in May.
Future plans
Capital expenditure during the fiscal year came close to ₹28,000 crore against a downwardly-revised target of ₹26,000 crore, CMD Subhash Kumar said on a call with analysts on Friday. For the ongoing financial year, the firm has set a capex target of ₹29,000 crore.
Annual gas production from the closely-watched deepwater KG-DWN-98/2 block off the eastern coast stood at 3 bcm during 2020-21, he said, adding that the company is sticking with the existing target of 4 bcm by 2023-24. However, the commencement of production from new discoveries in the area is dependent on import of complex machinery, and Covid-19 has disrupted international supply chains more heavily than domestic ones, Kumar added.
“We expect an increase in production from new projects,” he said, adding that ONGC is in talks with multiple international oil and gas majors for partnerships on new projects.
“The size and scale of our existing fields might not be of interest to large players in the international arena, but Category 2 and Category 3 basins may be of interest. We are looking at who fits best in those locations. That is how we are trying to pick partners and having discussions,” Kumar said.
“With regard to gas prices, we believe the worst is behind us. On both the pricing fronts, we should see a minimum increase of 50 per cent for the next quarter,” he added. In a six-monthly revision in March, the Centre kept the price of domestic gas produced by ONGC and Oil India (OIL) stable at $1.79 per MMBTU. It had also reduced the price ceiling on the production from discoveries in deep-water, ultra deep-water, and high pressure-high temperature areas to $3.62 per MMBTU.
“During the year, there has been a rebound in global Crude Oil and Natural Gas prices due to ease in pandemic driven lockdown restrictions globally. The company has considered possible effects of regained stability in the product market on the recoverability of its cash generating units,” ONGC said in a statement.
The March 2021 quarter was the first time that ONGC Petro Additions (OPAL), a joint venture with GAIL (India) and Gujarat State Petroleum Corporation, turned a profit after tax of ₹274 crore. For 2020-21, the JV’s losses were reduced by 62 per cent to ₹2089 crore, Kumar said.
“OPAL’s EBITDA has been very good in the first quarter of this fiscal year,” he added. “We are also looking at what structural arrangement needs to be made at the company level so that it’s operational and the bottom-line efficiency improves,” he said.
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