OIL net profit up 31%

Despite a sharp rise in its fuel subsidy burden, state-owned Oil India (OIL) has posted a 30.5 per cent increase in its net profit for the fourth quarter ended March 31.

India’s second biggest explorer, reported a net profit of Rs 562.61 crore during the January-March quarter, against Rs 431 crore in the corresponding period last year. During the quarter, the company's revenues increased 10 per cent to Rs 2,018.9 crore from Rs 1,832.1 crore in the fourth quarter of 2009-10.

The company said its profit would have been higher by Rs 900.7 crore during the quarter if it did not have to share the subsidy burden. OIL paid Rs 3,293.1 crore towards subsidising diesel, domestic LPG and kerosene in 2010-11, against Rs 1,548.81 crore in the previous year. The increase in subsidy burden has seen the profits of ONGC and GAIL fall during the fourth quarter this financial year.

OIL Chairman N M Borah said the company board has had preliminary discussions on a follow-on public offer.

He, however, did not divulge further details. The government plans to sell stakes in 60 firms over the next few years to bring down its fiscal deficit and garner funds for social welfare programmes. In September 2009, Oil India had raised Rs 2,850 crore ($570 million) in an initial public offer.

Borah said Oil India is looking at assets in South-East Asia, Australia, Latin America, Canada, some parts of the former Soviet Union and Africa and wants to invest in oil-producing assets overseas. The company has set aside Rs 4,000-4,500 crore to buy oil and gas assets.

"At present we're working on six deals to acquire stake in overseas assets," Borah said. The company, along with ONGC Videsh, the overseas arm of Oil & Natural Gas Corporation, is looking at a stake in a natural gas assets in Russia.

The board of directors of the company has recommended a final dividend of Rs 19.50 a share.m The company's scrip today closed at Rs 1286.35, up 1. 43 per cent on the Bombay Stock Exchange.