Oil exploration firm ONGC posted its lowest profits in last five quarters in the quarter to December 31, 2012, on lower production, while the subsidy burden remained high. The profit, at . 5,563 crore, was 17% lower y-o-y, but in line with street expectations.
The market is unlikely to treat the results as a negative surprise as ONGC’s profits last year were boosted by extraordinary income. The company had booked . 3,142 crore income in the Dec 2011 quarter as Cairn India accepted the royalty payment as cost recoverable for the Rajasthan field.
ONGC shared . 12,433 crore as subsidy during the December 2012 quarter, which was only marginally lower to the year-ago quarter. The company’s subsidy burden has remained above . 12,000-crore level for seven of the past eight quarters, as it contributed over . 93,000 crore in the last two years. This resulted in the company securing a net realisation at $47.97 per barrel, 7.3% higher y-o-y. A depreciated rupee meant the realisation jumped 13.9% against the year ago period to . 2,597 per barrel.
ONGC has been facing dwindling production at its major producing field, Bombay High, through FY13. This has caused the company’s standalone production to fall 3% from 6.24 million tonnes in the December 2011 quarter to 6.05 million tonnes in the December 2012 quarter, according to the company’s press release. It has also lowered its production target to 23.64 million tonnes from 23.98 million tonnes for FY13. During the recently concluded quarter, the company’s natural gas production too fell 1% to 5.03 billion cubic metres.
ONGC’s future appears bright, mainly due to the government’s steps to gradually raise diesel prices that would substantially reduce petroleum subsidies in the coming months. The government is also considering raising prices of domestically produced natural gas. Moreover, the company’s oil production is expected to witness a jump of nearly 2 million tonnes in FY14.
The market is unlikely to treat the results as a negative surprise as ONGC’s profits last year were boosted by extraordinary income. The company had booked . 3,142 crore income in the Dec 2011 quarter as Cairn India accepted the royalty payment as cost recoverable for the Rajasthan field.
ONGC shared . 12,433 crore as subsidy during the December 2012 quarter, which was only marginally lower to the year-ago quarter. The company’s subsidy burden has remained above . 12,000-crore level for seven of the past eight quarters, as it contributed over . 93,000 crore in the last two years. This resulted in the company securing a net realisation at $47.97 per barrel, 7.3% higher y-o-y. A depreciated rupee meant the realisation jumped 13.9% against the year ago period to . 2,597 per barrel.
ONGC has been facing dwindling production at its major producing field, Bombay High, through FY13. This has caused the company’s standalone production to fall 3% from 6.24 million tonnes in the December 2011 quarter to 6.05 million tonnes in the December 2012 quarter, according to the company’s press release. It has also lowered its production target to 23.64 million tonnes from 23.98 million tonnes for FY13. During the recently concluded quarter, the company’s natural gas production too fell 1% to 5.03 billion cubic metres.
ONGC’s future appears bright, mainly due to the government’s steps to gradually raise diesel prices that would substantially reduce petroleum subsidies in the coming months. The government is also considering raising prices of domestically produced natural gas. Moreover, the company’s oil production is expected to witness a jump of nearly 2 million tonnes in FY14.
No comments:
Post a Comment