The depreciation of the rupee helped ONGC, India’s biggest oil and gas explorer, post better-than-expected results in the September. quarte. The state-run explorer, however, continues to suffer from ad hoc subsidy sharing and stagnating production. Net profit at ONGC rose 2.8% yearon-year to . 6,064 crore, despite a 12% spurt in the subsidy burden to . 13,796 crore. This was made possible mainly by the more than 12% year-on-year depreciation in rupee during the quarter.
For every barrel of oil that ONGC sold, it recovered . 2,786 even after offering a $64.2 per barrel discount to oil marketing companies under a government diktat. This was 7.9% higher compared with the year-ago quarter. Being the biggest oil company, ONGC has to share the maximum subsidy burden.
While ONGC gave a subsidy of $64.2 per barrel during the quarter, Oil India offered $56 per barrel. It was also higher than the $62.9 per barrel discount it extended to downstream oil marketing companies in FY13 and $62.7 per barrel discount it offered in the quarter to June.
Although production has been lagging ONGC’s own expectations for some time, the September quarter did see some improvement in output. While crude production was stable at 5.1 million tonne, natural gas output was up 1.4% to 5.9 billion cubic metre.
The company’s depletion and depreciation expenses rose nearly 47% to . 2,427 crore, but a slow rise in rest of the costs led to a muted 11% growth in total expenditure. However, markets are likely to cheer the company’s ability to post a more than 50% growth in profits over the previous quarter. The positive sentiment, though, is likely to be short lived as the worry over ad hoc subsidy sharing still persists.
For every barrel of oil that ONGC sold, it recovered . 2,786 even after offering a $64.2 per barrel discount to oil marketing companies under a government diktat. This was 7.9% higher compared with the year-ago quarter. Being the biggest oil company, ONGC has to share the maximum subsidy burden.
While ONGC gave a subsidy of $64.2 per barrel during the quarter, Oil India offered $56 per barrel. It was also higher than the $62.9 per barrel discount it extended to downstream oil marketing companies in FY13 and $62.7 per barrel discount it offered in the quarter to June.
Although production has been lagging ONGC’s own expectations for some time, the September quarter did see some improvement in output. While crude production was stable at 5.1 million tonne, natural gas output was up 1.4% to 5.9 billion cubic metre.
The company’s depletion and depreciation expenses rose nearly 47% to . 2,427 crore, but a slow rise in rest of the costs led to a muted 11% growth in total expenditure. However, markets are likely to cheer the company’s ability to post a more than 50% growth in profits over the previous quarter. The positive sentiment, though, is likely to be short lived as the worry over ad hoc subsidy sharing still persists.
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