 "ONGC's net profit drops 17% as subsidy burden takes toll")
“Subsidy burden has impacted our profit by Rs 7,260 crore. There was also an 80 per cent rise in cess during the current quarter. The drop in net profit on a quarter-to-quarter basis is also because of an exceptional income of Rs 3,142 crore as cost recovery on royalty from Cairn India last year," said Sudhir Vasudeva, chairman and managing director. The impact of under-recovery on profit after tax during the quarter under review stood at Rs 7,260 crore, compared to Rs 7,172 crore last year. The gross discount due to under-recovery during the third quarter of 2012-13 was Rs 12,433 crore, 0.8 per cent less than the Rs 12,536 crore during the third quarter of the previous financial year.
According to Vasudeva, even if there was an increase in diesel price rise next month, it will not have a significant impact on the subsidy bill. ONGC’s outgo on subsidy sharing would touch Rs 50,000 crore this year, against Rs 44,456 crore last year," he said.
Sales revenue zoomed 15.9 per cent to Rs 21,089 crore, compared to Rs 18,199 crore during the third quarter of FY12.
Production went down drastically during the quarter. While crude oil production saw a 3 per cent drop to 6 million tonne against 6.2 million tonnes during the third quarter of the previous financial year, natural gas production has also gone down 0.9 per cent to 6.3 million standard cubic metres (mscm) compared to 6.4 mscm a day during the previous financial year.
“Production is declining rapidly, as most blocks are running out of reserves. To arrest this, we have to start production in new fields. In crude oil, monsoon and power shutdowns affected us badly. In terms of natural gas, production was affected in Mumbai High and Cauvery assets due to less offtake by the consumers," said Vasudeva.
On the other hand, gas sales saw an increase of 0.06 per cent to 5,026 mscm, compared to 5,023 mscm during the previous financial year. ONGC has got six new discoveries to its credit during the quarter, including two oil assets.
Despite a drop in net profit, the company has gained Rs 1,254 crore due to a decline in exchange rate compared to the previous year.
Net realisation for the quarter stood at $47.97 a barrel after paying a discount out of $110.16 a barrel of gross realisation.
However, ONGC’s gross under recovery discount for the first nine months of FY13 was Rs 37,108 crore, compared to Rs 30,296 crore during the same period last year.