ONGC Q1 net profit drops 34% on lower oil prices, output

New Delhi: The net profit of Oil and Natural Gas Corporation (ONGC) fell over 34 percent in June quarter on decline in oil prices and lower output, the firm said.

Net profit of Rs 10,015 crore in April-June (first quarter of current 2023-24 fiscal year) compared to Rs 15,206 crore earning in the same period last year, the company said in a statement.

ONGC, India's top crude oil and natural gas producer, earned USD 76.49 for every barrel of crude oil it produced and sold from nomination fields against a net realisation of $ 108.55 per barrel last year.

Oil prices globally had risen sharply in April-June 2022 after Russia's invasion of Ukraine led to uncertainties over supply and demand.

Crude oil pumped out of below ground and seabed is refined in refineries to produce petrol, diesel and other fuels. Natural gas is used to generate electricity as well as burn kitchen stoves and run automobiles (CNG).

Gross revenue fell 20 percent to Rs 33,814 crore.

ONGC said crude oil production was 3.2 percent lower at 4.6 million tonnes, while gas output fell 3.3 percent to 5.04 billion cubic meters.

"The reduction in ONGC's production in Q1 FY 2023-24 was due to shutdown in Panna-Mukta offshore platforms for commissioning of new crude oil pipeline to modernise its evacuation facilities, post taking over from JV partners, cyclone Biparjoy (June 2023) disrupting offshore and onshore production and crude oil wells in southern India had to be stopped as a refinery there stopped receiving oil, following a leakage in their pipeline," the statement said.

To counter the decline in production from some of the matured and marginal fields, ONGC is implementing well interventions and advancing new well drilling activities.

"The current decline in production is temporary. The same will be compensated in upcoming quarters with commencement of additional production from new projects; especially by crude oil production commencement from KG-98/2 in Q3 2023-24," it added.

ONGC said it made four oil and gas discoveries in the first quarter. Of these, three are new prospects in offshore areas and one is an onland find. The discoveries include a find in the Mid and South Tapti field in Mumbai offshore. "This prospect discovery has been named 'Pukhraj'," the statement said.

In a Krishna Godavari basin onland block, a development well hit a new hydrocarbon bearing pay zone.

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