PUBLIC sector oil major Oil and Natural Gas Corp (ONGC) on November 14 posted a 10 percent fall in quarterly profit, its first drop after four quarters of growth. The decline has been ascribed...largely to lower crude prices that hurt profitability from both onshore and offshore blocks.
The Maharatna PSU also said its board had approved investments of over Rs 106 billion ($1.71 billion) to boost production from two western offshore formations.
India's biggest oil and gas explorer has struggled to lift production from its ageing domestic fields and is aggressively investing overseas to secure energy assets for Asia's third-largest economy.
The state-owned company posted a profit of 54.45 billion rupees in the three months ended Sept. 30, its fiscal second quarter, down from 60.64 billion rupees a year earlier.
Net sales fell 8.7 percent to 203.61 billion rupees.
A higher burden from subsidised sales of products to state refiners to keep retail prices in check has squeezed ONGC's margins even as it spends heavily to boost overseas assets and maintain output at its domestic fields.
The company's cost of helping subsidise fuel fell slightly to 136.41 billion rupees from 137.96 billion in the same quarter last year.
The PSU, in which the Central government plans to sell a five percent stake worth close to $3 billion, is expected to benefit from government reforms to free diesel prices and raise natural gas prices.
Earlier, ONGC Videsh, the overseas arm of ONGC reported 9.65 percent rise in net profit to Rs 2068 crore on 12.94 percent rise in gross revenue from operations to Rs 11362 crore in H1 FY 2015 over H1
ONGC, a Maharatna PSU and India’s flagship energy major is engaged in exploration and production
of oil and gas in India and abroad.A global player in energy, it contributes about 69 percent of India’s domestic oil and gas production. Currently, ONGC through its subsidiary ONGC Videsh Ltd., is India’s largest transnational corporate with overseas investment of over $10 billion in 16 countries.