ONGC shines despite royalty payments to Gujarat, Assam

State-owned Oil and Natural Gas Corp (ONGC) on Friday reported a 6.2 per cent drop in March quarter net profit after it cleared royalty dues to Gujarat and Assam and provisioned for employee pay revision.

Net profit in January-March at Rs 4,340 crore was 6.2 per cent lower than Rs 4,625 crore net profit in the same period a year ago.

The drop was despite the company's net price realisation for crude oil produced from nominated fields rising 57 per cent to $54.91 a barrel and also from joint venture fields by 68 per cent to $48.72 a barrel.

"We set out Rs 2,444 crore to clear royalty payments to Gujarat and Assam as had been ordered by the Supreme Court," ONGC Director (Finance) A K Srinivasan said.

The royalty payment was due after the government agreed with the contention of Gujarat and Assam that the state-owned company should pay royalty on gross price for crude and not the net price it realised after paying for fuel subsidises. Also, the company provisioned Rs 1,944 crore towards ensuing pay revision for employees.

"But for the royalty payments, our net profit would have been higher by Rs 1,600 crore," he said.

Revenues were up 33.7 per cent to Rs 21,714 crore in the fourth quarter of 2016-17, a company statement said. Also, the company lost Rs 4,000 crore in revenue on natural gas price dipping to $2.5 per million British thermal unit from $3.82 per mmBtu in Q4 of 2015-16 fiscal. For the full fiscal, the company reported a 10.9 per cent rise in net profit to Rs 17,900 crore on flat revenue of Rs 77,907 crore. Net realisation on crude oil produced from nominated fields was up 6.6 per cent at $50.27 per barrel and that from joint venture fields by 4 per cent at $44.09 a barrel.

"ONGC has achieved a phenomenal rise in exploration performance in FY'17 by making 23 discoveries, as against 17 discoveries in FY'16 an increase of 35 per cent. Of the 23 discoveries, 13 discoveries were made in onland and 10 in offshore," the statement said.

Out of 13 onland discoveries, nine were monetized during the year itself having a potential of 0.218 million tonnes of oil equivalent per year. ONGC's crude oil production rose marginally by 0.8 per cent in January-March to 6.39 million tonnes but fell 1.5 per cent in the full year to 25.534 million tonnes.

Gas output was up 13.4 per cent in Q4 to 5.944 billion cubic meters and by 3.3 in full 2016-17 fiscal to 23.27 bcm.

After accounting for revenue and profits of its unlisted subsidiaries ONGC Videsh Ltd and Mangalore Refinery and Petrochemicals Ltd, ONGC had a consolidated net profit of Rs 20,498 crore in 2016-17, up 59.2 per cent from Rs 12,875 crore of previous year.Consolidated turnover was up 4.8 per cent at Rs 1,42,149 crore.