ONGC Videsh Ltd Q1 profit jumps 72% to Rs 837 cr

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), today reported a 72% jump in its net profit in the June quarter on the back of higher crude oil and natural gas output.

Net profit in April-June quarter rose by 71.9% to Rs 837 crore from Rs 487 crore in the same period a year ago, the company said in a statement here.

Crude oil production rose 15.7% to 1.335 million tons in Q1 while natural gas output rose 18.7% to 0.807 billion cubic meters.

"Oil production is higher mainly due to production from newly acquired ACG fields in Azerbaijan and resumption of production from South Sudan," OVL said.

ONGC Videsh Ltd (OVL) has interest in 32 projects in 16 countries, out of which 11 are producing projects, 5 discovered/ under-development projects, 14 exploratory projects and 2 pipeline projects.

The company, together with Oil India Ltd (OIL) signed definitive agreements on June 25 to acquire Videocon's 10% stake in a giant Mozambique gas field for USD 2,.475 billion.

While the Government of Mozambique approved the deal, the transaction is expected to close in the fourth quarter of 2013.

In the same Area-1 field, the company also signed definitive agreements on August 24 to buy another 10% stake from Anadarko for USD 2.64 billion.

"The acquisition is subject to the approvals of the Governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions," it said.

Area 1 covers approximately 2.6 million acres in the deep-water Rovuma Basin offshore Mozambique and represents the largest gas discovery in offshore East Africa with estimated recoverable reserves of 35 to 65 trillion cubic feet.

OVL said while production at its field in Syria stopped since December 2011, gas delivery commenced from Blocks A1 & A3 in offshore Myanmar on July 15.

The field is currently producing 2.17 million standard cubic meters per day and is expected to reach 5.67 mmscmd in March 2014 and will reach peak level of 14.50 mmscmd in Q1 of 2015. OVL has 17% share in the fields.

"The company continues to pursue opportunities towards energy security for the country through both organic and inorganic growth by participating in bidding rounds in exploration blocks and acquiring discovered/producing oil and gas projects overseas with strategic target to reach production level of 20 million tons of oil and oil equivalent gas per annum by FY'18 and 60 million tons by FY'30," it added.