ONGC net at Rs 5,389 crore

Oil and Natural Gas Corporation (ONGC) today reported a 5.9 per cent rise in its second-quarter net profit at Rs 5,388.77 crore, over the corresponding quarter last year, on better oil price realisation. Revenue from sales rose over 20 per cent to Rs 18,239 crore.

The country’s biggest oil exploration company paid 14.8 per cent more towards fuel subsidy at Rs 3,019 crore, compared to Rs 2,630 crore last year.

Upstream companies such as ONGC, Oil India and GAIL (India) provide discounts on crude oil and product sales to public sector oil marketing companies to compensate the retailers for selling auto and cooking fuels below the market price. Net realisation on crude sale after discounts was $62.75 per barrel against $ 56.41 per barrel a year ago.

ONGC Chairman and Managing Director R S Sharma told reporters that: “The company has notified a new oil discovery in Cambay basin, Western onshore.” The field flowed oil at the rate of 355 barrels per day. It also has traces of gas at 6,636 cubic metre per day.

During the three months to September, the company paid a royalty of Rs 319 crore towards the entire crude oil production from Barmer block in Rajasthan, where Cairn India is the operator and ONGC is a licensee.

“We are required to bear royalty on 100 per cent production from Barmer, whereas our share on oil produce is just 30 per cent,” Sharma said.

Royalty liability has been making the Rajasthan project unviable for ONGC. On the Cairn Energy-Vedanta deal, Sharma said, “The royalty issue is not linked with the deal. We have not put any pre-condition.”