Your participation in our business is one of the fundamental drivers of ONGC'ssustained growth and its contribution to the energy landscape of the country. Protectingshareholder interests through sustained value creation is top priority for the Company. Ithank you heartily for your continued support. Though the year 2017-18 (FY'18) witnessed alot of uncertainties the market movement during the year was in contrast to the previousyear. Global crude prices recorded a strong recovery and more than doubled from early-2016levels. This is a positive indicator for the health and growth outlook of the Oil &Gas sector.
Withdrawal of US from the nuclear deal with Iran and subsequent re-imposition ofsanctions on the latter demonstrated the significant influence of geopolitics on oil andgas markets. Climate change concerns the remarkable growth of renewables and anticipatedenergy transitions have added to the complexity of the industry landscape.
It is important to note that while energy mix projections vary by the source agencyOil and Natural Gas are expected to remain one of the most important sources of energyover the foreseeable future. Keeping in view the long term focus your Company hascontinued to maintain good investment level in its core area of Exploration and Production(E&P) despite the high volatility in the Crude prices. I on behalf of the Board ofDirectors as well as 32265 dedicated energy soldiers of Oil & Natural Gas CorporationLtd (ONGC) present to you the Company's Annual Report for the financial year 2017-18.
FY'18 was another year of continued success story for your Company's businesses. Wemade as many as 12 hydrocarbon discoveries out of which two discoveries one each in Cambayand Cauvery Onshore have already been put on production. Reserve accretion (2P) for theyear stood at 67.83 MMtoe. With a Reserve Replacement Ratio (RRR) of 1.48 we expanded ourhydrocarbon resource base for the twelfth consecutive year. Our crude production volumesremained steady with a marked improvement in gas output; capital outlays remained robust;profit edged higher and dividend payout was impressive. Beyond E&P acquisition ofHPCL added further strength to our already respectable downstream portfolio.
E&P the mainstay of our energy business will continue to be the principal focusarea of the management strategy and investments in the years to come. It is widelyrecognized that the era of easy oil' is over. Hydrocarbon exploration is gettingtougher with associated costs expected to face upward pressures. Extended period of lowoil prices has necessitated the adoption of a more cost-effective andoperationally-efficient approach. We have done well in this regard. At just over USD6 perbarrel of oil equivalent our finding costs are among the most competitive globally. Weare continuously working towards optimising the same further. We are focussing on greaterintegration of the right technology' into our campaign and more focused exploratoryinputs through better seismic API. As you are aware your Company is also associated as anintegral part of National Seismic Programme.
Production performance remained on track and our contribution to domestic hydrocarbonsupplies increased year-on-year largely on the back of higher gas output. Standalonecrude oil production recorded increase to 22.31 MMT in FY'18 as compared to 22.25 MMT inFY'17. Natural gas production registered an impressive growth of over 6% as production forFY'18 rose to 23.48 BCM as compared to 22.09 BCM in FY'17. Our cumulative domestichydrocarbon volumes (inclusive of our share in JV-operated properties) also recorded anincrease; 50.05 MMtoe vis-a-vis 48.81 MMtoe in FY'17. Production of Value Added Productsincreased for the fourth consecutive year VAP output in FY'18 stood at 3.39 MMTwith an increase of 4.6% over FY'17 volumes. The fact that we have continued to achieveproduction growth with a largely mature portfolio makes the feat even more rewarding.Despite the maturity of our key fields our IOR/EOR schemes are aimed at maximizinghydrocarbon recovery from these ageing brownfields. In FY'18 incremental oil gain fromthese projects totalled 7.5 MMT almost one-third of our total oil output for the year.
A legacy-dependent portfolio however does present its own set of challengesespecially in a cash-constrained operating environment. However with more projects comingonline in the next few years we are confident of reducing our reliance on ageing fields.We expect a steady step-up in our domestic hydrocarbon output primarily led by ramp-up ingas output from key projects such as KG-DWN-98/2 Daman and Vashishta fields. While crudeoil volumes will not experience the same level of growth as gas Western Offshoreredevelopment projects will add incremental oil to our portfolio helping offset thenatural decline of our base portfolio. Seventeen projects completed during the last 4years contributed over 6 MMtoe of oil and gas supplies. Your Company completed two majorprojects namely Development of Western Periphery and Integrated Development of Vashishtaand S1 Fields in FY'18 envisaging lifecycle oil and gas gains of over 17 MMtoe.
Drilling is central to any E&P activity. FY'18 proved to be another record-settingyear for our drilling operations. For the second consecutive year as many as 503 wellswere drilled - the highest ever. Your Company drilled 119 exploratory wells - the highestnumber in the last 6 years and also achieved the highest cycle and commercial speed. With37 rigs operating in the offshore the Company remains focused on expanding its presenceand expertise in a terrain that has historically been its strong suite. Deepwater drillingis an exciting new arena within this domain and the Company plans to drill 24 deep waterwells in FY'19. A majority of our future oil and gas supplies are offshore-based whichmakes offshore drilling critical to the Company's success in the medium term. Consideringthe capital-intensive offshore operations cost optimisation is key to mitigating theinherent risks of any offshore upstream project. ONGC's Offshore drilling costs have comedown by 7% in FY'18 which in absolute terms is significant. The Company is constantlystriving to further bring down the drilling costs. Your Company's upstream capital programis growing steadily unlike that of most oil and gas operators over the past 4 years - aperiod that witnessed widespread and extensive budget reductions in reaction to low crudeprices. The committed capex of Rs 320770 Million for FY'19 is directed towards E&Pactivity. While strong domestic oil demand and the country's high degree of reliance onimports are drivers for sustaining robust investments in domestic upstream activity it isalso a derivative of our positive outlook on the domestic hydrocarbon potential. Therecently concluded Hydrocarbon resource reassessment project only confirms the view -prognosticated hydrocarbon resource base of the country today stands at 42 Billion tonnesof oil equivalent up by 50% from past estimates. The Company has also put in place firmplans to deliver on its targets to support the 10% Import Reduction mission as envisionedby the Hon'ble Prime Minister. Further constant efforts are being made to improve theoperational efficiencies through various "Research and Development" activitiescarried out by the in-house institutes.
Coming to financials the Company recorded Revenue from Operations of Rs 850041Million in FY'18 compared to Rs 779078 Million in FY'17. Profit After Tax increased byover 11% to Rs 199453 Million in FY'18 against Rs 179000 Million in FY'17. The Companyrealized USD 57.33/bbl for crude sold in the domestic market in FY'18 as compared to USD50.27/bbl in FY'17. Dividends to shareholder for FY'18 remained healthy with a totalpayout of Rs 84699 Million with impressive payout ratio (including dividend distributiontax) of 51.13%. We have consistently maintained a dividend payout ratio of over 50% overthe last 4 years. Even as your Company expands and diversifies its business the Companyis steadfast in its commitment to maintain its consistent track record in dividend payoutto shareholders. It is another testament of business fundamentals and prudent approach tocapital management. FY'18 proved to be good for our overseas arm ONGC Videsh Ltd also.Following the acquisition of significant stake in Russia's Vankorneft in 2016 ONGC Videshled Indian consortium also acquired an important 10% stake in the UAE's offshore oil andgas field Zakum in February 2018. Buoyed by incremental volumes from both these assetsoverseas hydrocarbon output rose by over 10% to 14.16 MMtoe in FY'18 versus 12.80 MMtoe inFY'17. Consolidated Revenue from Operations and Consolidated PAT during FY'18 stood at Rs104176 Million and Rs 9815 Million as against Rs 100800 Million and Rs 7573 Million inFY'17 respectively. Going forward ONGC Videsh's international ventures are going to playa critical role in the realization of ONGC's long-term growth blueprint as well asfurthering sovereign energy diplomacy reach globally. In the downstream business MRPLregistered highest ever throughput at 16.31 MMT in FY'18. The refining unit recorded animpressive GRM of USD 7.54/bbl. Revenue from Operations grew by 6.1% to Rs 630836Million. PAT stood at Rs 22241 Million. The refining unit also posted an 18% year-on-yeargrowth in its exports. It continues to maintain major share of the direct sales segment ofpetroleum products market in Karnataka and adjoining states and enhanced its market sharefor Polypropylene with introduction of new and niche grades. Providing another boost tothe sustainability efforts of ONGC group companies the refinery also successfullycommissioned largest solar power project (6 MW) at a refinery site in the country.
The acquisition of majority stake in state refining entity Hindustan PetroleumCorporation Ltd (HPCL) was a defining move one that significantly transforms ONGC'sdownstream portfolio. While ONGC in itself remains committed to excellence in upstreambusiness HPCL fits well into the group's integrated energy strategy. HPCL will providethe Company a pure-play refining and marketing edge with an extensive retail presence(over 15000 outlets) in the country entailing significant diversification benefits.Together with MRPL the refining capacity of ONGC group today stands at over 40 MMTmaking us the third largest in the country in terms of installed capacity.
The Company is also substantially invested in the Petrochemical segment. ONGC Petroadditions Ltd (OPaL) a 1.1 MMTPA Ethylene Cracker unit is one of the largest dual-feedcrackers in the world today. Capacity utilization of the plant is expected to be over 80%during the current fiscal i.e. FY'19 further reaching 100% utilization toward the end ofDecember 2019. OPaL in a short span of time has established itself in the domestic aswell as international markets both with respect to quality as well as price. ONGCMangalore Petrochemicals Limited (OMPL) another Petrochemical unit of ONGC havingproduction capacity of 1.2 MMTPA of Aromatics registered Revenue from Operations of Rs55613 Million. Close to 80% of its products namely Paraxylene and Benzene are exported.
ONGC Tripura Power Company (OTPC) our Power JV in the country's North-eastern State ofTripura which operates a 726 MW Combined Cycle Gas Turbine Power Plant recorded Revenuefrom Operations of Rs 12516 Million and Profit After Tax of Rs 1251 Million in FY'18.This is another noteworthy sustainability venture of ONGC group and a greenest UNFCCC-certified power plant of the country. This plant meets 35% power requirement of NorthEastern States.
As I mentioned already the entire energy framework is on the cusp of substantialrestructuring in fact the transformation is already underway. With increasingfreedom for the consumer to choose from a wide array of energy sources the energycommodities market will become more consumer-driven. Technology disruptions RenewablesDigitalization and Sustainability will be at the core of this change.
Your Company is gearing up for this period of transformation. An approach premised onsound application of technology and sustainability is what ONGC is embracing fordiscovering new pathways of growth. Application of cutting-edge technologies in the way welocate and source our hydrocarbons to implementation of paperless office and reduction ofgas flaring are all part of the Company's resilient philosophy of doing the business ofenergy. Our globally-recognized CDM projects and expanding engagement in renewables alsobear proof of our sustainable business ethics.
Your Company has been continuously rated outstanding' grade CPSE as per DPEguideline on corporate governance.
Beyond business our CSR initiatives have also helped the organization in making apositive impact in people's lives. At the same time it also sensitizes us to our role asan important stakeholder of the society and environment. In FY'18 your Company spent Rs5034 Million for its various CSR programs with target areas spanning from HealthcareSanitation Education to Environment and Sustainability.
In line with the Government policy your Company has set up a Start Up fund of Rs 1000Million dedicated to foster nurture and incubate new ideas related to energy. As a partof this initiative we signed MOUs with 5 StartUps in FY'18. I am happy to inform thatONGC officers after scaling Mount Everest last year also successfully summited the thirdhighest and most challenging peak Mount Kanchenjunga in FY'18.
Though our main objective is energy security I firmly believe that ONGC has over theyears proven its capability to contribute effectively to larger national goals andpriorities. Here I would like to thank the Government of India especially ouradministrative Ministry - the Ministry of Petroleum and Natural Gas for its constantsupport and encouragement. A lot of what we have achieved as the country's flagship energyexplorer would have been difficult without the policy support and facilitating approach ofthe Government.
Notwithstanding the shifts and turns in the market your consistent belief in ourgrowth story and enduring association with us is what keeps us motivated to emergestronger and more competitive with every passing year. At the successful closure of yetanother financial year I express my gratitude for this much valued invaluable investmentand support. Look forward to continuing this journey and achieving greater heightstogether.
Chairman and Managing Director