Oil India net profit drops 95%

This is despite posting highest-ever crude oil production of 3.277 million tonnes

State-run Oil India Ltd (OIL) has posted a 95 per cent drop in net profit for the March quarter to Rs 19.3 crore, against Rs 470 crore during the same period last year.

“The major reasons for our drop in profit was due to a one-time differential royalty on crude oil of Rs 1,152 crore which has been paid to the government of Assam and Arunachal Pradesh during the period. Similarly, lower crude oil and natural gas price and a higher wage payout of Rs 660 crore also played its part. The profit after tax would have been higher by about Rs 610 crore if the additional burden of royalty had not been borne by OIL,” said Utpal Bora, chairman and managing director. 

Total income for the fourth quarter stood at Rs 3,309 crore, up 35.3 per cent from Rs 2,445 crore during the same period in 2015-16. The company’s net profit for the financial year 2016-17 dropped 32 per cent from Rs 2,302 crore in 2015-16 to Rs 1,549 crore in 2016-17. 

This is despite the company posting its highest-ever crude oil production of 3.277 million tonnes (mt) during the financial year  under review from 3.247 mt in 2015-16. Natural gas production also saw a marginal rise to 2.937 billion cubic metres (bcm) in 2016-17 from 2.838 bcm in the previous financial year. However, giving a major relief to the firm, a resolution on a dispute with Assam and Arunachal Pradesh avoided contingent liability of Rs 10,000 crore.