Oil and Natural Gas Corporation (ONGC), the country’s biggest oil exploration company, today reported a 71 per cent jump in March quarter net profit at Rs 3,776 crore, as against Rs 2,207 crore in the year-ago period, on higher crude oil realisation.
Net sales grew over 7 per cent to Rs 14,713 crore, compared to Rs 13,703 crore earlier. ONGC shares touched a monthly high of Rs 1,145 on the Bombay Stock Exchange and closed 0.50 per cent up at Rs 1,130.95.
The state-owned company managed to grow its profit, despite paying Rs 4,999 crore towards fuel subsidies, compared to a Rs 852-crore payout a year earlier. During the reported quarter, ONGC’s realisation on every barrel of crude was $51.42, up by over 18 per cent from $43.40 in same period last year.
For 2009-10, net sales dipped over 5 per cent to Rs 59,987 crore, while net profit rose by 4 per cent to Rs 16,768 crore. The company board recommended the highest ever dividend of Rs 33 per share, subject to approval in its September annual general meeting.
ONGC Chairman and Managing Director R S Sharma said the government’s move to raise gas price to $4.20 per million British thermal units (mBtu) from $1.79 per mBtu would add Rs 5,500 crore to revenues and about Rs 3,500 crore to bottom line. “With this price increase, we will be able to wipe out the entire under- recoveries (revenue loss) on gas business,” he said.
ONGC lost Rs 4,775 crore in 2008-09 on selling about 50 million standard cubic meters per day at $1.79 per mBtu.
Sharma said the company was in talks with Reliance Industries, another major energy player, to devise means to share resources to optimise costs. “It is a common practice overseas and we should also look at such an option,” he said.
