The recent price hike of natural gas by the centre may result in an additional revenue of Rs 1500 crore to the state-owned ONGC Limited during the first half of the current fiscal, said global rating and research agency Moodys.
The price paid to most of natural gas produced from domestic fields will be USD 3.06 per million British thermal unit (mmBtu) for six months, beginning April 1, from current USD 2.89, according to a recent notification issued by oil ministrys Petroleum Planning and Analysis Cell.
"Natural gas contributed around 45 per cent of ONCGs total crude oil and natural gas production volume in fiscal 2017."
"Assuming natural gas sales volume of around 10 billion cubic meters for the first six months of fiscal 2019 for ONGC and its joint venture partners, ONGCs natural gas revenue will increase 23 per cent to Rs 80 billion (Rs 8000 crore) for the six months between 1 April and 30 September 2018, from a reported Rs 65 billion (Rs 6500 crore) the year before", Moodys said in its credit outlook issued today.
The government revises domestic natural gas prices every six months using a pricing formula based on a volume-weighted annual average of prices prevailing in Henry Hub (US), National Balancing Point (UK excluding Russia), Alberta (Canada) and Russia, it added.
Indias oil and gas producers, including ONGC, are unlikely to increase gas production over the next 12-18 months because most of the discovered resources will take at least another two to three years to reach production, the report opined.
ONGC, accounted for 70 per cent of the countrys natural gas production on a standalone basis for fiscal 2017.
"We expect Indias LNG imports to increase because domestic production growth will lag the growth in domestic demand for LNG. Indias oil and gas producers, including ONGC, are unlikely to increase gas production over the next 12-18 months because most of the discovered resources will take at least another two to three years to reach production," the report said.
India relies on LNG imports to meet its energy needs, with LNG imports accounting for 44.5 per cent of total natural gas consumption in India in fiscal 2017, it said.
Theprice ceiling for natural gas produced from deep-water blocks was also hiked to USD 6.78 per mmbtu from USD 6.30.
Disclaimer: No Business Standard Journalist was involved in creation of this content
