ONGC June quarter profit dives 92% as oil, gas price slump to decade low

Revenues dipped 51 per cent to Rs 13,011 crore after a nationwide coronavirus lockdown impacted fuel demand.

State-owned Oil and Natural Gas Corp (ONGC) on Tuesday reported 92 per cent slump in its June quarter net profit after oil prices halved and gas rates fell to a decade low.

Standalone net profit of Rs 496 crore in April-June was 91.7 per cent lower than Rs 5,980 crore net profit a year back, the company said in a statement.

The surprise profit came after the company delayed payment of cess on crude oil it produces. Initially, the company did not pay even royalty in anticipation of relief from the government to deal with a slump in oil prices.

It cleared royalty payments at June-end but cess payments were done only in July.

ONGC pays about Rs 400 crore of royalty and cess every quarter to the government.

Revenues dipped 51 per cent to Rs 13,011 crore after a nationwide coronavirus lockdown impacted fuel demand.

ONGC said it got USD 28.72 for every barrel of crude oil it sold in the quarter, down from USD 66.32 a barrel in the same period a year back.

Gas price realisation fell 35.2 per cent to USD 2.39 per million British thermal unit.

"The revenue and net profit for Q1 have been impacted by lower crude price realization," ONGC said. "Lower gas prices also contributed to lower topline and bottomline."

Consolidated net profit at Rs 1,090 crore was 84.7 per cent lower than Rs 7,120 crore a year back.

The company's crude oil production was flat at 4.8 million tonne while gas output fell 12.3 per cent to 5.4 billion cubic meters. The gas output was lower due to reduced offtake by industries shut down during the lockdown.

ONGC said it made three discoveries in the current fiscal so far. These include natural gas finds in KG blocks and Tripura.

Also, an oil and gas find was made in the KG-DWN-98/2 block that sits next to Reliance Industries' flagging KG-D6 block in the Bay of Bengal.

"This discovery (in KG-DWN-98/2) has improved the prospectivity," it said.

ONGC is investing over USD 5 billion in bringing to production the first set of oil and gas finds in the block.

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