| ONGC Q1 profit jumps to Rs60.8b on forex gains |
NEW DELHI State-run producer Oil & Natural Gas Corp reported a higher-than-expected 48 per cent jump in quarterly profit, as the company benefited from higher crude oil prices and foreign exchange fluctuations.
India’s third-biggest company by market value reported net profit of Rs60.8 billion for its fiscal first quarter ended June, up from Rs41.0 billion a year earlier.
Analysts, on average, had expected a net profit of Rs49.6 billion. Net sales rose 24 per cent to Rs200.8 billion, as the company benefited from the year-on-year rise in its average sale price for crude oil.
The company, which prices its locally produced gas in dollar terms, has benefited from the sharp depreciation in the rupee. The rupee weakened by 8.5 per cent during the April-to-June period and has lost a fifth of its value over the past year.
ONGC does not fully benefit from rising crude prices because India caps prices of petroleum products such as diesel, cooking gas and kerosene and producers such as ONGC share the cost of subsidising refineries by selling crude to them at a discount.
Net realisations from oil sales, after giving discounts to state-run refiners, were slightly lower at $46.62 per barrel from $48.74 a barrel a year earlier.
ONGC said its net profit was reduced by Rs71.5 billion for the quarter by gross discounts of Rs123.5 billion to state-run refiners. It had given discounts of Rs120.5 billion a year earlier.
Total income increased to Rs212.16 billion for the June 2012 quarter from Rs171.28 billion in the year-ago period, according to a stock exchange filing by the company.
ONGC has made a fresh discovery at the D1 offshore field off India’s western coast, Chairman Sudhir Vasudeva said. The discovery would boost in-place reserves at the field to an estimated 140 million tonnes of oil-equivalent, from 82 million tonnes now, he said. The company has also made three other smaller discoveries in the past month.
ONGC, which has been investing heavily to maintain output from its old fields, has outlined capital expenditure of Rs331 billion in the current financial year. The company has said it aims to raise crude oil production by 15 per cent to 28 million tonnes, or 560,000 barrels per day (bpd), by March 2014.
ONGC is close to announcing a significant discovery near the Mumbai High fields, which may increase output in the region by 25,000 barrels per day. The discovery awaits formal scrutiny and assessment by the directorate general of hydrocarbons (DGH) and the company will make an announcement only after regulatory approval. The basin is the largest in India and includes Mumbai High, Bassein and Heera and Neelam producing fields. ONGC had made the oil discovery in this basin in 1974.
Agencies
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