ONGC lost 3.2% to Rs 267.50 at 13:29 IST on BSE after the company announced that ONGC Videsh has signed definitive agreements to acquire a direct 10% participating interest in gas block.
The company made the announcement during trading hours today, 26 August 2013.
Meanwhile, the BSE Sensex was down 11.56 points, or 0.06%, to 18,507.88.
On BSE, 3.71 lakh shares were traded in the counter compared with average volume of 3.26 lakh shares in the past one quarter.
The stock was volatile. The stock rose as much as 1.61% at the day's high of Rs 281. The stock lost as much as 3.71% at the day's low of Rs 266.30. The stock hit a 52-week high of Rs 354.10 on 18 January 2013. The stock hit a 52-week low of Rs 247 on 22 August 2013.
The stock had underperformed the market over the past one month till 23 August 2013, falling 11.31% compared with the Sensex's 8.78% fall. The scrip also underperformed the market in past one quarter, falling 15.61% as against Sensex's 5.87% fall.
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The large-cap state-run company has an equity capital of Rs 4277.74 crore. Face value per share is Rs 5.
ONGC said that ONGC Videsh (OVL) has signed definitive agreements on 24 August 2013 with Anadarko Mombique Area 1 Limitada (Anadarko) to acquire a direct 10% participating interest (Interest) in the Rovuma Area 1 Offshore Block in Mozambique (Area 1) for $ 2640 million. OVL is a wholly owned subsidiary of ONGC.
The acquisition is subject to the approvals of the Governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions. The transaction is subject to usual closing conditions and has long stop date of 28 February 2014.
The acquisition of an additional 10% interest in Area 1 follows company's earlier announcement of a joint acquisition, with Oil India (OIL), of an indirect 10% interest in Area 1, from Videocon Mauritius Energy. BPRL Ventures Mozambique B.V. (BPRL), another Indian PSU already holds a 10% interest in Area 1. Area 1 covers approximately 2.6 million acres in the deep-water Rovuma Basin offshore Mozambique and represents the largest gas discovery in offshore East Africa with estimated recoverable resources of 35 to 65 trillion cubic feet. The partners in Area 1 include Anadarko, operator of the project, ENH, Mitsui, BPRL, Videocon and PTTEP. Area 1 has the potential to become one of the world's largest LNG producing hubs. The Area 1 LNG project is strategically located to supply LNG to India at a competitive price. Participation of Indian PSUs in the project will facilitate access of LNG to the growing Indian gas market. Indian PSUs would need to devote significant funding and technical resources to the development of the project, which will also enhance the strong links between Mozambique and India.
The acquisition of an interest in Area 1 would mark OVL's entry into this emerging world-class offshore gas basin with significant future upside potential, and is consistent with OVL's quest of adding high quality international assets to its existing E&P portfolio. The acquisition would increase OVL's reserve and resource base significantly. The project would also be an important milestone in reaching OVL's long-term production targets of 20 MMTOE by FY'18 and 60 MMTOE by FY'30.
"We are very pleased to have agreed with Anadarko the terms to acquire a direct 10% Interest in Area 1 to add to the 10% interest OVL has agreed to jointly acquire with OIL recently. As a result of both transactions, OVL will own a significant interest in this strategic project in Mozambique. Area 1 has potential to become one of the world's largest LNG projects and today's acquisition marks a further significant step by OVL/ONGC group towards the energy security of our country. OVL is delighted to partner with Anadarko and other project participants to develop this world-class asset", said Mr Sudhir Vasudeva, Chairman, OVL.
ONGC's net profit fell 33.9% to Rs 4015.98 crore on 3.4% decline in total income to Rs 20505.03 crore in Q1 June 2013 over Q1 June 2012.
ONGC gave a gross subsidy discount of Rs 12622 crore in Q1 June 2013, which was higher than Rs 12346 crore in Q1 June 2012. The subsidy discount impacted the profit before tax (PBT) by Rs 10803 crore and profit after tax (PAT) by Rs 7131 crore. ONGC shares the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
ONGC sold crude at $102.90 per barrel in Q1 June 2013, but after giving subsidy discounts the net realization was $40.17 in Q1 June 2013 against $45.91 a barrel in Q1 June 2012.
ONGC said that due to changes in accounting policies, the profit before tax was higher by Rs 222 crore.
ONGC said it has provided for Rs 1611 crore in Q1 June 2013 towards contribution for conversion of Post Retirement Benefit Scheme from Defined Benefit Scheme to Defined Contributory Scheme based on guidelines of the Department of Public Enterprise.
ONGC reported 4 hydrocarbon discoveries in Q1 June 2013 and an additional discovery in August 2013.
The Government of India (GoI) holds 69.23% stake in ONGC (as per the shareholding pattern as on 30 June 2013).
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