 "A technician works inside the ONGC group gathering station on the outskirts of Ahmedabad. Photo: Reuters")
Government-owned Oil and Natural Gas Corporation (ONGC) reported a 6.3 per cent increase in net profit to Rs 4,975 crore in the September quarter, the second one of this financial year, against Rs 4,681 crore in the same quarter last year.
The board of directors recommended a bonus issue in the ratio of 1:2 (a bonus share for every two already held), subject to approval of shareholders. The previous such bonus issue was in 2010-11, of 1:1. Further, ONGC said it had split its share of the face value of Rs 10 each, fully paid, into two shares each of the face value of Rs 5. If approved by shareholders, each equity share of Rs 10 held by shareholders prior to 1995-96 would now be 36.72 equity shares of Rs 5 each.
“The increase in profit was mainly driven by three factors. First, our exploration writeoff was lower at Rs 547 crore during the quarter, compared to Rs 1,728 crore in the same period last year. In addition, we saved a lot on operating expenses and decline in prices of oilfield services,” said D K Sarraf, chairman and managing director.
Lower crude oil and natural gas prices saw gross revenue fall 10.3 per cent to Rs 18,395 crore, from Rs 20,512 crore in Q2 of FY16.
The board also approved an interim dividend of 90 per cent, Rs 4.50 on each equity share of Rs 5. The total payout on this will be Rs 3,850 crore. The Union government will receive Rs 2,654 crore on its 68.93 per cent shareholding. In addition, dividend distribution tax of ?784 crore would be paid to the government.
"We will issue the first and second interim dividends within the regulatory time period, after the Q2 and Q3 results. The final dividend will be paid after the annual general meeting," said Sarraf.
During the financial year, ONGC has had 15 oil and gas discoveries. Gas production increased from 5.702 billion cubic metres (bcm) in Q2 last year to 5.807 bcm this time. Production of value added products rose from 696 kilotonnes last year to 798 kt this year.
On the other hand, the quarter saw a 2.8 per cent drop in the production of crude oil to 6.392 million tonnes, from 6.578 mt in the same period last year.
With cash-strapped Venezuela failing to pay after oil prices slumped to a decadal low, ONGC might past dues of about $600 million from the country on investments in oilfields there, after adjusting with oil imports.
ONGC has 40 per cent stake in the San Cristobal oilfield in Venezuela but that cash-short country has not paid the company's share of oil sales for two years. "We are in the final stages of striking an agreement. We will adjust the amount through crude oil imports in two years," Sarraf added.
OVL, had invested about $190 million in the project, where state-run Petroleos de Venezuela SA is the majority holder.
