ONGC: Falling numbers

THE PRODUCTION from ONGC’s onshore oilfields is falling fast, which will have an adverse impact on the company’s performance during the December 2008 quarter. ONGC's onshore production from its onshore fields in Assam, Gujarat, Andhra Pradesh and Tamil Nadu contributes nearly 30.5% of its total domestic production of 26 million tonnes per annum or 0.52 million barrels per day. The onshore production of ONGC, which grew 6% y-o-y in May 2008, reported a 1% growth in June but fell 2% y-o-y in July, followed by a 3% fall in August, 4% in September and was 8% lower in November 2008 compared to the November 2007 production. The onshore production in the month of November 2008, at 614,000 tonnes, was the lowest in at least two years as revealed by the petroleum ministry figures. ONGC's production from Assam, which has been suffering from environmental issues, is likely to report an 8% fall to around 290,000 tonnes for the December 2008 quarter. The production from Gujarat, which is suffering due to a reduction in reservoir pressure, leading to an increase in water content of the total production, would report a 6% fall at 1.56 million tonnes. Production in Andhra Pradesh was lower in November 2008 as production could begin from only two wells out of eight. Despite the problems on the onshore front, ONGC's offshore production from the Mumbai High oilfield, continues to remain on track and is not expected to report any fall on y-o-y basis.