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ONGC crowns glorious year with two major discoveries

Oil and Natural Gas Corporation (ONGC) Chairman & Managing Director (CMD) Sudhir Vasudeva on Wednesday declared two new discoveries which will help considerably in increasing the country’s energy security.  Announcing an impressive array of financial results for financial year 2012-13 at the national oil and gas company’s 243rd board meeting in the Capital, he said that the first discovery is exploratory well KGOSN041NANL#2 in NELP (New Exploration & Licencing Policy) Block KG-OSN-2004/1 of the KG Shallow Offshore basin.

It was drilled to a depth of 2000 m and is the fourth discovery in this block, adding further value towards making it a commercial proposition.

The second recent discovery is exploratory well GK-42 # 3 in GK-28 PML, Kutch Shallow Offshore, Western offshore basin, which as was drilled to a depth of 1480 m. This new pool discovery will add value to GK-28/ GK-42 areas which Oil and Natural Gas Corporation plans to put on production, adding a new producing basin to the geological map of India and taking the country yet another step towards much needed hydrocarbon production.

The company reported a 40 per cent drop in its March quarter net profit as oil and gas output fell while payments on account of statutory levies rose sharply. Net profit in January-March at Rs 3,387 crore was 40 per cent lower than Rs 5,644 crore in the same period a year ago. Oil output fell to 5.62 million tonnes in Q4 from 5.78 million
tonnes a year ago while natural gas production declined to 5.58 billion cubic metres (bcm) from 6.03 bcm in January-March 2012, he said.

Also, cess  on crude oil as well as royalty payments rose by Rs 1,043 crore in the quarter, Oil and Natural Gas Corp  Director (Finance) A K Banerjee said that adding an additional provision of Rs 1,698 crore was made for increased operating expenditure because of employee benefit scheme.

The government had last fiscal raised cess on crude oil to Rs 4,500 per ton from Rs 2,500 previously. Also, ONGC had to shell out more royalty on crude oil produced from Cairn India's Rajasthan block. Oil and Natural Gas Corporation, which holds a 30 per cent interest in the Rajasthan block, is liable to pay royalty on 100 per cent of crude oil.

Banerjee said the company had to make higher provision for dry wells and survey expenditure in the quarter. Payment of statutory levies increased from Rs 4,521 crore in January-March 2012 to Rs 5,561 crore in Q4 of 2012-13, he said. Oil and Natural Gas Corp had to shell out Rs 12,312 crore in march 2013 quarter so that diesel, domestic LPG and kerosene can be sold by retailers at subsided rates to public. The subsidy outgo was lower than Rs 14,170 crore in the same period last fiscal. Vasudeva said but for the subsidy, Oil and Natural Gas Corporation’s profits would have been higher by Rs 6,900 crore in the quarter. The company's March 2013 quarter sales were up 13.1 per cent at Rs 21,460 crore.

For the fiscal, net profit was down 16.7 per cent to Rs 20,926 crore
on record subsidy payout. Oil and
Natural Gas Corporation paid Rs 49,421 crore in 2012-13, up from Rs 44,466 crore in the previous year. But for this record subsidy outgo, net profit should have risen by Rs 28,413 crore, he said.

‘Last year we had a one-time gain of Rs 3,141 crore after Cairn India agreed to reimbursement of cess and royalty Oil and Natural Gas Corp  pays
on crude oil produced from its Rajasthan block,’ he said. Vasudeva said .
ONGC plans to invest Rs 35,049 crore in 2013-14 up from Rs 29,503 crore

in the previous fiscal.
Oil and Natural Gas Corporation’s turnover in 2012-13 fiscal rose by 8.4 per cent to Rs 82,552 crore.

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