ONGC net rises on weak rupee

The total income rose 9.6% during the same period to Rs 23,897 cr

State-run ONGC Ltd has posted 2.8% rise in its net profit for the second quarter of the financial year to Rs 6,063.86 crore, as against Rs 5,896.57 crore during the same period in 2012-13.

The company’s sales revenue for the quarter under review also zoomed 12.7% to Rs 22,384 crore, compared to Rs 19,384 crore for the second quarter of the previous financial year.  “The rise in net profit beating expectations is mainly due to rupee depreciation. This despite our production falling almost flat to last year’s level,” said Sudhir Vasudeva, chairman and managing director of ONGC.

However, the company suffered a forex loss of Rs 249 crore during the second quarter, compared to a gain of Rs 16 crore last year. The company paid Rs 13,796 crore as subsidy share on diesel, LPG and kerosene in the second quarter, while it was Rs 12,330 crore during the Q2 of 2012-13.

Crude oil production for the quarter was slightly down from the previous year at 5.09 million tonne against 5.103 MT last year. On the other hand, natural gas production for the period under review fell 1.39% to 4.55 billion cubic metre compared to 4.645 bcm last year.

Meanwhile, the net realisation for the second quarter stood at $44.84 per barrel, while it was $46.76 per barrel during the second quarter last year. “The net realization for the first half of the fiscal stands at $42.56 per barrel, as it was only in the range of $40 per barrel during the first quarter,” said A K Banerjee, director (finance), ONGC.

Pressure on cash reserves

The company added that it may have to raise at least Rs 3,000 crore from the market during the next financial year and to draw at least Rs 5,000 crore from its cash reserves this fiscal in order to meet its capital expenditure.

“Our cash reserves now is around Rs 13,000 crore. Since our net realization is lower, we are forced to withdraw around Rs 5000 crore from reserves this year. Out of the remaining cash about Rs 6000 crore comes under employee funds. As a result, we will be left with Rs 2,000 crore next year to play around for capital expenditure. Hence, we would be forced to raise at least Rs 3,000 crore form the market next year,” Banerjee added.

Gas flow concerns in KG-D6

Meanwhile, regarding the dispute on ONGC raising concerns to the directorate general of hydrocarbons (DGH) on whether gas from its G4 field in the Krishna-Godavari basin may flow from flow to RIL’s side, Vasudeva said, “If there is a flow we would like to be compensated. But it has to be proved once the production starts. This is the practice globally” Recently, a meeting was held between ONGC, RIL and DGH was present in which data exchange of the fields was agreed upon.

To raise $1.5 bn for Mozambique deal

ONGC Videsh is planning to raise $1.5 billion to refinance a bridge loan that it expects to finalise soon, to buy a 10 per cent stake in Mozambique's Rovuma gas field from the Videocon group. “We will finalise the deal by December-end. The acquisition of 10 per cent stake in the block from Anadarko Petroleum Corp would be concluded by February-end,” said the chairman.