NEW DELHI: THE country’s largest oil explorer ONGC on Thursday reported a 12.2 per cent increase in its net profit to Rs 4,416.11 crore for the fourth quarter of fiscal 2015-16 as it reversed part of impairment losses and got back some of the fuel subsidy from the government.
During the corresponding period last year, the company reported a net profit was Rs 3,935.07 crore.
“The increase in net profit was due to a Rs 800 crore reversal in impairment charge incurred by the company last year and the exemption from the government to pay any subsidy for the second quarter of the 2015-16 fiscal,” D K Sarraf, Chairman and Managing Director, ONGC said. We have received another Rs 633 crore from the government for excess fuel subsidy paid earlier, he added.
ONGC also gained Rs 1,585 crore on dry well provisioning. However, the company’s total income from operations during the quarter fell 24.3 percent to Rs 16,424 crore from Rs 21,683 crore in the same quarter last year.
Operationally, the company’s crude oil production fell by 1.7 per cent to 6.34 million tons and natural gas output also dropped by nearly 10 percent to 5.24 billion cubic meters during the quarter.
“We expect that oil and gas production will both increase in the next year as many of the projects we had undertaken last year will be complete,” said Sarraf.
The company has a capital expenditure target of around Rs 30,000 crore for the 2016-17 fiscal. “Our capital expenditure is not dependent on crude oil prices. However, when prices are low, the cost of services and equipment is also low. Therefore, even if the capital expenditure comes down, the actual physical work remains the same,” Sarraf added.
Commenting on the auctions for the discovered small fields which ONGC has already surrendered, he said, “Our team has started studying them. We are just refreshing our old workings since we used to own most of them. With the new fiscal regime some of them may fall within our bidding parameters.”