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Oil India Q3 results: Profit falls 9.3%, hit by lower crude prices

Oil India shares closed 0.2% higher ahead of the earnings, after rising about 79% in 2023

Oil India

Oil India | Photo: Oil India official website

Reuters

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State-run explorer Oil India reported a 9.3 per cent fall in third-quarter profit on Tuesday, hit by lower prices for crude oil and a windfall tax levied by the government.
 
Standalone profit was Rs 1,584 crore ($191 million) for the quarter ended December 31, compared with Rs 1,746 cr a year earlier.
 
Average crude prices fell 6.5 per cent in the December quarter, as per LSEG data. The Indian government's windfall tax on crude oil producers since July 2022 has also hurt its bottom line.
 
The government has set the tax rate at a level that ensures a steady range of $73-$76 per barrel net crude realisation for Oil and Natural Gas Corp and Oil India, analysts at ICICI Securities said in a note last month.
 
Last year, the government also reduced the prices of gas produced from old blocks to $6.50 per million British thermal units (mmBtu) from $8.57 per mmBtu, squeezing the realisation of ONGC and Oil India, which together operate old fields responsible for about 80 per cent of India's annual gas output.
 
While revenue from Oil India's crude oil segment rose 5.7 per cent, pre-tax profit fell 7.3 per cent. Revenue from the natural gas business fell 15.1 per cent, pulling down the overall revenue by 1 per cent to 58.15 billion rupees.
 
Oil and Natural Gas Corp, another government-backed explorer, reported a 9.8 per cent decline in quarterly revenue and a 13.7 per cent fall in profit on Saturday. ONGC's crude oil price realisation fell 6.4 per cent from the previous year.
 
Oil India shares closed 0.2 per cent higher ahead of the earnings, after rising about 79 per cent in 2023.

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First Published: Feb 13 2024 | 10:52 PM IST

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