CHENNAI: Higher crude oil prices helped public sector oil and gas exploration major Oil and Natural Gas Corporation (ONGC) record a net profit of Rs 6,734 crore in the quarter ended March 31, 2021 (Q4 FY21), a turnaround from a net loss of Rs 3,214.41 crore in the corresponding quarter of the previous year. However, the company’s gains from higher oil prices were partially offset by record low gas rates during the period. Its gross revenue during the quarter also declined 1.2 per cent to Rs 21,189 crore compared to the previous year.
According to ONGC Chairman and Managing Director Subhash Kumar, who was speaking at an investor’s call, the oil major realised $58.05 for every barrel of crude oil produced and sold in January-March, up from the $49.01 a barrel realised a year ago. The period saw the company also reverse earlier impairment losses, following a re-assessment of crude oil prices, which have rebounded from lows hit last year.
Based on the assessment, the company has recorded a net impairment reversal of Rs 2,613 crore for the January-March quarter and Rs 1,375 crore for the year to March 31, 2021, Kumar said. He also pointed out that domestic gas prices set under the administered pricing mechanism—revised once every six months—stood at just $1.79 per million British thermal unit in the quarter, down from $3.23 a year ago.
However, all is not well with the oil business either. The disruption caused by the pandemic has led the company to produce 3.5 per cent less crude oil during the fiscal year at 22.53 million tonnes. Gas output was 8.4 per cent lower. “The shortfall in natural gas production is primarily due to less offtake by customers due to COVID-19 pandemic. This has resulted in a production shortfall of condensate and value-added products (VAP) as well,” he said.
But, the CMD set an optimistic outlook for the industry going forward, saying “we think the worst is behind us.” Prices, he added, are likely to increase 50-60 per cent at the time of the revision due on October 1.
For the full year, FY21, ONGC registered a 16.5 per cent decline in profit at Rs 11,246 crore and a 29.2 per cent fall in gross revenue at Rs 68,141 crore, compared to the previous year.ONGC said it had declared a total 10 discoveries (3 in onland, 7 in offshore) during FY21 in its operated acreages. Out of these, six are new prospects.