OVL H1 net profit more than doubles to Rs 512 crore

ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC), today reported an over two-fold jump in net profit at Rs 512 crore in the first half of this fiscal, helped by higher crude production and lower depreciation and amortisation expenses.
Net profit for April-September was at Rs 512 crore, 126.55 per cent higher than Rs 226 crore for the same period in the year-ago period, the company said in a statement.
OVL, which has projects in 15 countries from Venezuela to New Zealand, reported a 3 per cent rise in standalone crude oil production at 1.3 million tonnes.

Consolidated crude oil production was up 29 per cent at 3.6 million tonnes while gas output was 13 per cent higher at 1.87 billion cubic meters.
The consolidated oil production was higher due to the acquisition of 15 per cent stake in Russia's Vankor oilfield.
The net profit was higher despite a 8.5 per cent drop in revenue to Rs 3,457 crore.

The profit was higher "due to reduced depreciation, depletion and amortisation expenses and forex gains," the statement said without giving details.
OVL is unlisted 100 per cent subsidiary of ONGC and by regulation is not required to give out quarterly earning numbers.

The company completed acquisition of 15 per cent stake in Vankor field in East Siberia in May and subsequently acquired another 11 per cent stake from Rosneft Oil Company on October this year.
Vankor is Russia's second largest field by production and accounts for 4 per cent of Russian output. "The average daily production from the field is around 415,500 barrels per day of crude oil since acquisition and OVL's share of daily oil production from Vankor (considering both the acquisitions) will be about 108,030 barrels a day," the statement said.
OVL said it has signed an agreement with Petroleos De Venezuela SA (PDVSA) for facilitating redevelopment of the San Cristobal joint venture project in Venezuela.

"The redevelopment plan aims to increase the current level of production of about 18,000 barrels per day to 27,000 barrels a day by use of water flooding techniques," the statement said.
The agreement also provides for mechanism to liquidate OVL's outstanding dividends from the project and to obtain term finance for the USD 318 million capital investment for implementing the redevelopment plan, it added.
OVL owns 40 per cent of Venezuela's San Cristobal oilfield and had invested about USD 190 million in the project in 2008. PDVSA holds the remaining stake.
It has not been paid for its share of oil from the San Cristobal field in last few years. After this agreement, PDVSA has agreed to supply 17,000 barrels per day of crude oil to repay USD 537 million that it owes to OVL.