Indian Oil Corporation reported a 30.9 per cent increase in its net profit for the first quarter of fiscal 2016-17 at ₹8,628.98 crore against ₹6,590.83 crore in the same quarter last year.
The jump in profit was due to substantial inventory gain and improvement in margins from the petrochemical business.
However, during the quarter, the company's net revenue fell 5.75 per cent to ₹1,07,200.65 crore against ₹1,13,743.46 crore in the same quarter last year.
The company's board also recommended the issue of bonus shares in the ratio of 1:1.
The bonus shares will help in the capitalisation of reserves to the tune of ₹2,427 crore, said Sanjiv Singh, Director-Refineries, IndianOil. An oil marketing company gets an inventory gain when crude oil prices start firming up. This is because companies would have sourced the crude oil at lower prices and by the time it reaches the refinery for processing and selling products, the prices would have improved. IndianOil benefitted significantly as its inventory gain during the quarter under review stood at ₹7,479 crore against ₹3,223 crore in the same quarter last year.
Progress in Iran Giving an update on the Farzad B block in the Farsi offshore block in Iran, the company said that the Indian consortium which hopes to develop the block is currently preparing the field development plan.
"Response from the Iranian side has been very good so far...We gave appointed a consultant to find the best alternatives for the monetisation of the gas there....We do hope that a deal would be concluded by October," said D Sen, Director (Planning and Business Development) at IndianOil.
ONGC Videsh Ltd, the overseas investment arm of ONGC, along with its partners Indian Oil Corporation and Oil India had made the discovery in the Farsi offshore fields in Iran in 2008.
The Farzad B block has estimated in-place reserves of 21.68 trillion cubic feet (tcf) of which 12.8 tcf of gas and 212 million barrels of condensate may be recoverable.
Meanwhile, IndianOil will also procure 5 million tonnes of crude oil from Iran in the current financial year through a term contract.
In the previous fiscal it sourced around 1.5 million tonnes from Iran.
On Monday, Indian Oil's shares closed 0.32 per cent lower on the BSE at ₹571.95.