ONGC earns Rs 1,286-cr Q3 profit de­spite write-off af­ter oil slump


Resource Digest - - CONTENT -

ONGC has an­nounced that it has taken a one-time im­pair­ment charge on re­serves due to slump in oil prices. Its net profit of Rs 1,286 crore in Oc­to­ber-de­cem­ber was 64 per cent lower than Rs 3,571 crore in the same pe­riod a year ago, ONGC Chair­man and Man­ag­ing Di­rec­tor Di­nesh K Sar­raf told re­porters.

With oil prices slump­ing to 12-year low, it wrote down the value of re­serves it holds by Rs 3,994 crore. The write- down is called im­pair­ment. “It wasn’t a bad quar­ter but for the im­pair­ment, we con­sciously took, to keep our bal­ance sheet clean,” he said adding but for the write-off the net profit would have been Rs 3,898 crore.

Rev­enue was down 2.3 per cent to Rs 18,547 crore on fall­ing oil prices, he said. ONGC re­alised $44.34 per bar­rel in the third quar­ter, down from $50.56 a bar­rel net re­al­i­sa­tion in the same pe­riod a year ago. Un­like last fis­cal, the com­pany did not have to pay any fuel sub­sidy in Oc­to­ber-de­cem­ber as the Govern­ment de­cided to make good all of the losses that state-owned fuel re­tail­ers in­curred on sell­ing kerosene and LPG at sub-mar­ket rates. Pre­vi­ously, ONGC as well as Oil In­dia Ltd had to make good a cer­tain part of the losses.

Sar­raf said crude oil pro­duc­tion in the third quar­ter was marginally down at 6.52 mil­lion tons from 6.61 mil­lion tons a year ago while gas out­put fell 4 per cent to 5.77 bil­lion cu­bic me­ters.

“The com­pany has as­sessed the in­di­ca­tions of sig­nif­i­cant im­pair­ment as at De­cem­ber 31, 2015 due to fall in crude oil prices in the in­ter­na­tional mar­ket, and ac­cord­ingly the com­pany has tested its Cash Gen­er­at­ing Units for the im­pair­ment. As a re­sult, an amount of Rs 3,994 crore has been pro­vided as im­pair­ment loss and shown as ex­cep­tional items for the quar­ter,” Sar­raf said.

On do­mes­tic gas pric­ing, Sar­raf said that go­ing by the trends till De­cem­ber, a 15% fall in prices is ex­pected from April 1. He added that the com­pany might write to the govern­ment to hold the do­mes­tic gas price at $4.2 per mbtu.

He said that ONGC made 14 oil and gas dis­cov­er­ies in 201516. In first nine months of cur­rent fis­cal, ONGC re­ported net profit drop­ping 16 per cent to Rs 11,588 crore. Rev­enue was how­ever up 1.2 per cent to Rs 62,147 crore.

ONGC Videsh Ltd and Ros­neft signed an Agree­ment of Con­fir­ma­tion of suc­cess­ful com­ple­tion of the first stage pre- com­ple­tion ac­tions in re­la­tion to the cre­ation of a joint ven­ture in JSC “Vanko­rneft” on De­cem­ber 24, 2015. The doc­u­ment was signed in con­tin­u­a­tion of the agree­ment of sale and pur­chase of a 15 per cent share in Vanko­rneft and the share­hold­ers agree­ment in re­gard of the en­ter­prise man­age­ment. ONGC and OIL also signed an­mou on De­cem­ber 23, 2015, for Joint col­lab­o­ra­tion lead­ing to mu­tu­ally ben­e­fi­cial R&D projects ful­fill­ing com­mit­ment un­der the head of “JIP- Joint In­dus­tries Pro­ject” man­dated in the sec­to­rial in­no­va­tion coun­cil re­port of Union Govern­ment for the E&P sec­tor.

ONGC’S Hazira Plant won the pres­ti­gious ‘Cer­tifi­cate of Merit’ in Na­tional En­ergy Con­ser­va­tion Award 2015 or­ga­nized by Min­istry of Power for adopt­ing en­ergy con­ser­va­tion mea­sures. The Na­tional En­ergy Con­ser­va­tion Awards are pre­sented to in­dus­tries and other es­tab­lish­ments ev­ery year by the Min­istry of Power with the ob­jec­tive of pro­mot­ing en­ergy con­ser­va­tion among all sec­tors of econ­omy.

The com­pany also re­ceived Oil and Gas con­ser­va­tion award from the Min­is­ter of State (In­de­pen­dent Charge) P&NG Shri Dhar­men­dra Prad­han on 18th Jan­uary, 2016 on the oc­ca­sion of Oil & Gas Con­ser­va­tion Fort­night-16 in New Delhi for ONGC’S role in spread­ing mes­sage of oil & gas con­ser­va­tion.

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