Lower Gas Price Dents ONGC, Profit Slips 8% In June Quarter

New Delhi: India's biggest oil and gas producer ONGC on Thursday reported a 8.2 per cent drop in its June quarter net profit after sharp reduction in natural gas rates took away gains made from higher oil prices.

Oil and Natural Gas Corp (ONGC) reported a net profit of Rs 3,884.73 crore, or Rs 3.03 a share, in April-June compared to Rs 4,232.54 crore, or Rs 3.30 per share, in the same period of the previous fiscal, the company said in a statement.

The company got $51.03 for every barrel of crude oil it produced from fields given to it on nomination or without bidding, and $45.92 a barrel from joint venture fields in the first quarter. This is compared to $46.10 per barrel for nominated fields and $38.90 a barrel for joint venture fields.

The government-mandated price for natural gas fell to $2.48 per million British thermal unit in April-June, a 19 per cent drop from $3.06 per mmBtu in the same quarter of the previous fiscal.

Revenue was up at Rs 19,073.54 crore from Rs 17,784.75 crore in the first quarter of the previous fiscal.

Crude oil production was up 1.6 per cent to 6.44 million tonnes in the June quarter while natural gas output soared 9.8 per cent to 6.03 billion cubic meters.

ONGC said it has notified five new discoveries in offshore blocks during the quarter. "Out of the five discoveries, three have been made in offshore blocks while two discoveries have been made in onshore blocks."

Oil and gas was discovered in a well drilled on the Matar ML Block in Cambay basin in Gujarat, leading to opening up a new area for explroation.

Natural gas was found in a well drilled in Mumbai offshore while an exploratory well drilled on a KG basin block in Bay of Bengal too encountered natural gas.

Gas was also found in a well drilled in west Tripura in the Assam-Arakan basin, improving prospectivity of the area and opening it up for further exploration.

Oil was found in another KG offshore block, GS-29, it added.

ONGC said it has received government approval for relinquishing its 30 per cent stake in SGL field in Rajasthan block RJ-ON/6 to Focus Energy Ltd.

This is conditional to Focus Energy paying all of the past royalty obligation and other statutory levies and waive development and production costs payable by ONGC.

"Farm out agreement and amendment in Production Sharing Contract (PSC) in this regard are yet to be executed," it added.

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