OIL India Sept qtr Net drops 5.3% to Rs 904 cr

Oil India Ltd, the nation's second largest state explorer, today reported a 5.3% drop in its second quarter net profit on lower crude oil production and higher fuel subsidy.

Net profit in July-September quarter dipped to Rs 903.64 crore, or Rs 15.03 per share, from Rs 954.57 crore, or Rs 15.88 a share, the company said in a statement here.

Profits fell as it shelled out 7.5% more fuel subsidy at Rs 2,233.70 crore in the quarter under review.

Upstream firms like OIL and ONGC bear a portion of the losses fuel retailers incur on selling diesel, domestic cooking gas (LPG) and kerosene at government control prices.

They do so by selling crude oil they produce at a discount to the downstream companies.

The subsidy outgo lowered net profit by Rs 1,265.68 crore, OIL said.

OIL's net realisation on crude oil was $52.33 per barrel after it gave a discount of $56 to the downstream refinerers like IOC. The net realisation was marginally lower than $52.63 a barrel it got in Q2 of last fiscal.

Crude oil production slipped 4.6% to 0.916 million tonnes while natural production at 0.666 billion cubic metres was lower than 0.69 bcm in July-September of 2012.

"The decrease in crude oil production and sales quantity is due to certain bandhs and blockades (in North East) which affected operations in Q2 FY14. The crude oil loss due to such Bandhs and Blockades was 3456 tonnes during Q2," the statement said.

Turnover was up 12.58% at Rs 2,836.40 crore in second quarter.

Net profit fell 19.74% to Rs 1,512.72 crore, or Rs 25.16 a share, in the first half of current fiscal as subsidy outgo soared 3% to Rs 4,215.76 crore.

Turnover was almost unchanged at Rs 4,934.17 crore in April-September period.