The recent drop in the rupee’s value helped Oil and Natural Gas Corp (ONGC) report a 2.83 per cent increase in net profit for the September quarter at Rs 6,063.86 crore, compared with the corresponding period last year.
This is despite a higher subsidy outgo for public sector oil marketing companies to offset the revenue losses they incur by selling fuels at controlled prices.
Till August-end, the rupee fell almost 20 per cent this calendar year.
Sudhir Vasudeva, ONGC Chairman and Managing Director, told reporters after a Board meeting that forex fluctuation has helped the company this time, but it is not possible to develop oil fields at less than $ 60 a barrel. The rupee closed at closed at 63.3 against a dollar on Wednesday.
“The Government needs to address the subsidy issue. We are already ringing the alarm bells …we will deplete our cash reserves in two years and after that we have to go and borrow from the market to sustain our day-to-day operations and I only hope that that situation doesn’t come," he said.
In the second quarter, ONGC gave out subsidies worth Rs 13,796 crore against Rs 12,330 crore a year ago.
Total income has increased 9.69 per cent to Rs 23,897.64 crore in the September quarter, from Rs 21,786 crore in the last corresponding period.
Asked about the reports of ONGC alleging Reliance Industries Ltd of stealing its KG gas, Vasudeva said: “We never complained. There is only an apprehension…If the fields are connected at reservoir level, then even if they are producing from their reservoir, since we are not producing, it is possible that some gas will be drawn.”
“So we only want to establish that first of all if the fields are connected or not. If they are connected then there are methods available to work on it.”
N K Verma, Director Exploration at ONGC, said: “We wrote to the Directorate General of Hydrocarbons to facilitate the date sharing. We have had a tri-partite meeting with RIL (DGH, ONGC and RIL). We have signed an agreement for data exchange.”
On Wednesday, the company’s scrip gained 0.96 per cent to Rs 268.40 on BSE.