Riding on higher crude oil realisations, Oil and Natural Gas Corporation (ONGC), India’s biggest energy explorer, reported a 60.4 per cent jump in net profit for the quarter ended September 30. Net profit stood at Rs 8,642 crore, while sales revenue rose 24.4 per cent to Rs 22,687 crore.
Net realisation on crude oil improved by 33.4 per cent to $83.70 per barrel, though ONGC offered a higher discount of Rs 5,713 crore towards subsidizing losses of oil marketing companies (against Rs 3,019 crore in the corresponding quarter last year). The subsidy payout is given by the government-owned company in the form of discount to state-owned refiners, which are required to sell diesel, kerosene and domestic liquefied petroleum gas at government-regulated prices.
ONGC chairman Sudhir Vasudeva said, “The good performance is not an indication of what the annual results will be. We will get an idea of that only in the fourth quarter.” Vasudeva said the company would factor in the Rs 2,500 crore arising as a result of royalty being made cost-recoverable in the next quarter. “This will add Rs 1,900 crore to the bottom line of next quarter.”
ONGC MAY REGAIN LOST GLORY
A higher subsidy burden saw ONGC lose its position as India’s largest profit making company to Reliance Industries Ltd (RIL) in 2010-11. While RIL made Rs 20,286 crore in profits, ONGC reported a profit of Rs 18,924 crore last financial year. In the first six months of this financial year, ONGC has moved ahead of RIL. ONGC’s net profit stood at Rs 12,737 crore, against Rs 11,364 crore of RIL.