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The state-owned Oil and Natural Gas Corporation (ONGC) revealed a 14% decrease in net profit for the third quarter that concluded on December 31 due to a decline in the price of gas and oil. Standalone net profit of ₹9,536 crore in October-December 2023 (third quarter of 2023-24 fiscal year) was 13.7% lower than ₹11,045 crore earning in the same period of previous financial year, the company said in a statement.
The earning was lower as price realised for crude oil the firm produced and sold in the quarter fell 6.4 per cent to USD 81.59 per barrel. Gas price too was 24.2% lower at $6.5 per mmBtu.
Also contributing to lower profit was a decline in production of crude oil, which is converted into fuel like petrol and diesel at refineries, and natural gas which is used to generate electricity, produce fertiliser, turned into CNG and piped to kitchens for cooking.
Crude oil production dropped 3.3% to 5.22 million tonne while gas output was 4.3% lower at 5.12 billion cubic meters. Gross revenue was down 10% at ₹34,789 crore in Q3. The board of the company approved a second interim dividend of 80% or Rs 4 a share. "The total payout on this account will be ₹5,032 crore," the statement said.
This is in addition to the first interim dividend of ₹5.75 per share declared in November last year. ONGC's standalone net profit in the first nine months of the current fiscal fell 24% to ₹29,767 crore as oil price realised dropped to $75.55 a barrel from $97.10. Gas price realised too was 5% lower at $6.57 per million British thermal unit.
The nine-month production too was lower. "The reduction in ONGC's production output in first nine months of FY 2023-24 was due to shutdown in Panna-Mukta offshore platforms for commissioning of new crude oil pipeline to modernise its evacuation facilities, and Cyclone Biparjoy (in June 2023) disrupting offshore and onshore production," ONGC said adding crude oil production of a southern field was hampered as a refinery stopped receiving oil, following a leakage in their pipeline.
To counter the decline in production from some of the matured and marginal fields, ONGC is taking proactive steps by implementing well interventions and advancing new well drilling activities. "The decline in production from matured fields will be compensated in upcoming quarters with commencement of additional production from upcoming projects, which are under various stages of development," the firm said adding crude oil production has already commenced from KG-DWN-98/2 Block on January 7, 2024.
ONGC said it made nine oil and gas discoveries in the current fiscal. Five of these discoveries are offshore and the remaining are onland. Besides start of oil production from the deep-water KG-DWN-98/2 block in Bay of Bengal, other highlight was Mandapeta field of Rajahmundry Asset crossing 1.0 million standard cubic meters per day of gas production mark on October 5, 2023 - the highest-ever since inception of the field in 1994, through reservoir characterization & proper well placement, high-volume fracking and timely augmentation of production facilities.
ONGC said it also received approval to form a 100% subsidiary company for green energy and gas business. The wholly-owned subsidiary company shall pursue green hydrogen, hydrogen blending, renewable energy (solar, wind and hybrid), biofuels/ biogas business and LNG.
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