NEW DELHI: Oil and Natural Gas Corporation (ONGC) reported a 20 per cent decline in net profit at Rs 10,216 crore for the second quarter of the current financial year (Q2FY24) on a fall in oil prices and lower output. It had reported a net profit of Rs 12,826 crore in the same period last year, a statement said.
This is the second consecutive quarter of a fall in net profit for ONGC, the country’s top crude oil and natural gas producer. The state-owned company had reported a 34 per cent drop in April-June profit.
ONGC earned $84.84 for every barrel of crude oil it produced and sold from nomination fields against a gross realisation of $95.50 per barrel last year and $76.49 in earnings in the preceding quarter.
Oil prices globally had risen sharply in April-June 2022, after Russia’s invasion of Ukraine led to uncertainties over supply and demand, but rates have cooled this year.
They were in the $80-90 range in the second quarter.ONGC Director (Finance) Pomila Jaspal, in a statement, said the main reason for the fall in the net profit is lower oil prices. Besides that, oil and gas production was slightly lower than last year.
However, according to the company, this will reverse in the current quarter (October-December), as the company brings to production a prolific oilfield in the KG basin.
The company had a Rs 1,900 crore reversal of impairment last year, which had boosted earnings. This year there is no such exceptional income. Crude oil pumped out of below ground and seabed is refined in refineries to produce petrol, diesel and other fuels. Natural gas is used to generate electricity as well as burn kitchen stoves and run automobiles (CNG).
The gross revenue of the company declined 8.2 per cent to Rs 35,162 crore, mainly because it realised lower oil prices. ONGC said crude oil production was 1.9 per cent lower at 4.54 million tonnes, while gas output fell 3 per cent to 5.01 billion cubic meters.
The fall in output can primarily be attributed to the decline in some of the matured fields and marginal fields. ONGC is taking proactive steps by implementing well interventions and advancing new well drilling activities within these fields to counter this decline, the statement said.