More than double subsidy outgo has hit ONGC's bottom line for the June quarter. But for the subsidy outgo of Rs 12,046 crore, ONGC's profits would have been higher by Rs 6,878 crore.
The company has reported an 11.9 per cent growth at Rs 4,095 crore in its net profit for the quarter because of increase in APM gas price and higher crude oil production.
ONGC, besides Oil India, is an exceptional exploration company that did not seem to benefit from soaring global crude oil prices. Public sector upstream companies have to extend discounts to their oil marketing counterparts such as Indian Oil, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation for selling petroleum products at a Government controlled price.
Mr A.K. Hazarika, Chairman and Managing Director, ONGC, said, “The net realisation on crude oil stood at $48.76 a barrel as against the gross realisation of $121.29 a barrel because of the discounts.”
He further said that his company expects to fully benefit from the June 25 decision to increase product prices and reduce customs and excise duties on crude oil and petroleum products in the coming quarters. For the first quarter, ONGC could reap benefits for only a few days.
Royalty payments
The current profits have been calculated without considering the royalty paid on Rajasthan crude oil as cost recoverable, Mr D.K. Sarraf, Director (Finance), said. For the quarter the company has paid Rs 546 crore as royalty for Cairn India's 70 per cent stake in the fields and Rs 235 crore for its 30 per cent.
The company's oil output excluding the joint venture projects was 5.933 million tonnes in the quarter, and natural gas production was 5.605 billion cubic metres. The gas sales were 4.379 bcm. From the joint venture projects, crude oil production was 6.758 mt, natural gas 6.162 bcm, and gas sales 4.878 bcm.
During the quarter, the company also notified two discoveries – one each in Assam & Assam-Arakan Basin and Western Onshore basin. In the Western onshore it is NELP block CB-OSN-2003/1, which flowed gas.
ONGC's share price at the BSE on Thursday ended almost flat at Rs 276.65.