ONGC posts net profit of ₹16,553 crore in Q2 FY24

State-run Oil and Natural Gas Commission (ONGC) on Friday reported a 142.4 per cent y-o-y growth in its consolidated net profit at ₹16,553 crore in the July-September quarter of FY24.

However, the exploration and production major’s consolidated total income fell to ₹1.49 lakh crore in Q2 FY24 from ₹1.66 lakh crore in Q1 FY214 and ₹1.71 lakh crore in Q2 FY23.

On a standalone basis, the company’s realisation from crude oil produced from nominated fields fell to $84.84 per barrel in Q2 FY24 from $95.50 a year ago. The realisation of crude oil produced from joint ventures (JVs) also declined to $79.41 per barrel from $94.96.

“Board has approved interim dividend of 115 per cent, i.e. ₹5.75 on each equity share of ₹5. The total payout on this account will be ₹7,234 crore. The record date for distribution of dividend has been fixed for November 21, 2023, which has been intimated to the stock exchanges,” the company said.

ONGC’s total crude oil production fell by 2.1 per cent y-o-y to 5.249 million tonnes. Gas production fell by 2.8 per cent y-o-y to 5.2 billion cubic meters (BCM).

Discovery update

The company declared a total of five discoveries (2 on land and 3 offshore) during FY24 in its operated acreages. Out of these, 3 are prospects (Offshore) and 2 on land are New Pools. ONGC has monetised 2 discoveries till date during FY24, Gopavaram-21(FY24) and Karugorumilli-1 (FY23).

ONGC said the reduction in production output can primarily be attributed to a decline in some of the matured fields and marginal fields. To counter this decline, ONGC is taking proactive steps by implementing well interventions and advancing new well-drilling activities within these fields.

Furthermore, in a bid to bolster evacuation capacities and modernise offshore facilities, a shutdown was undertaken in Panna-Mukta for the commissioning of a new crude oil pipeline, post taking over from JV Partner. The shutdown resulted in a temporary loss of production, it added.

Another factor impacting production was Cyclone Biparjoy struck in June 2023. This event disrupted both offshore and onshore production operations. Further, oil production of a Southern asset was hampered due to the stoppage of wells caused by the cessation of crude oil receipts by a refinery, following a leak in its pipeline.

ONGC, however, acted swiftly and devised an alternate method for the evacuation of crude oil through tankers, thus resuming production. The current decline in production from matured fields will be compensated in upcoming quarters with the commencement of additional production from upcoming projects, which are under various stages of development, the company said.

The Company also made the disclosure about the approval of the Board of Directors for “Sustainable Capital Restructuring of ONGC petro additions Ltd (OPaL)”, a joint venture of the company, for a capital infusion of ₹14,864.281 crore, subject to the approval of shareholders and/ or Government of India, as the case may be.

“It is informed that the Board of Directors at its meeting held today inter-alia accorded in–principle approval, to do a sustainable debt-equity ratio for OPaL, subject to approval of shareholders and/ or Government of India, as the case may be, for additional equity investment of ₹3,501 crore, over and above the aforesaid approval of ₹14,864.281 crore, making a total investment of ₹18,365.281 crore in OpaL,” it added.