NEW DELHI: Flagship explorer ONGC recorded a 20% decline in its second quarter net profit at Rs 10,216 crore compared to Rs 12,826 crore a year ago as a drop in global oil prices coincided with marginally lower production during the July-September period.
Company director (finance) Pomila Jaspal said lower crude prices reduced earning from each barrel to $84.8 against $95.5 in the year-ago period.She expected the situation to reverse in the December quarter with the KG-DWN-98/2 block off the Andhra coast coming onto production this month.
Besides, she said last year earnings were boosted by a Rs 1,900 crore reversal of impairment, while this year there was no such exceptional income.
Global oil prices had surged in the April-June period of 2022 after Russia’s invasion of Ukraine, which led to higher earning. But prices have fallen this year and were in the $80-90 band during the second quarter.
Sequentially, this is the second consecutive quarter of decline in profit for ONGC, which posted a 34% drop in the April-June period, when realisation per barrel dipped to $76.4 earning in the preceding quarter.
Gross revenue fell 8.2% to Rs 35,162 crore mainly because it realised lower oil prices. “The reduction in production output can primarily be attributed to decline in some of the matured fields and marginal fields. To counter this decline, ONGC is taking proactive steps by implementing well interventions and advancing new well drilling activities within these fields,” the company said in a statement.
Furthermore, in a bid to bolster evacuation capacities and modernize offshore facilities, a shutdown was undertaken in Panna-Mukta for commissioning of a new crude oil pipeline, post taking over from joint venture Partner. The shutdown resulted in a temporary loss of production.
“Another factor impacting production was Cyclone Biparjoy struck in June 2023. This event disrupted both offshore and onshore production operations,” the company said.