Oil and natural gas Corporation (ONGC) reported a profit of Rs 3,763.5 crore on a consolidated basis for the quarter ended December, 31.1% but the profit made within the same period a year ago, mainly on the state-run oil and gas producing company’s lower crude price realisation and under-recoveries within the gas business. The company’s board, on Saturday, has approved creation of latest subsidiary for marketing and trading gas . The board has also decided to pay an interim dividend of Rs 1.75 on each equity share of Rs 5.
The company, which produces about 65% of domestic petroleum , supplied 5.6 million tonne (MT) of petroleum within the quarter from its ageing oilfields, recording an annual drop of three .3%. Its gas output fell 5.9% year-on-year (y-o-y) to five .8 billion cubic metres. ONGC’s realisation from petroleum from its nominated fields fell 27.7% to $43.2 per barrel during the December quarter, compared with the year-ago period. gross sales was down 8.4% y-o-y to Rs 1lakh crore within the quarter.
The upcoming subsidiary will specialise in the gas business value chain, including LNG, hydrogen enriched CNG, ONGC said. the corporate also will help ONGC diversify further into the gas to power, bioenergy, and other bio fuel business fronts. ONGC also will acquire 5% stake in IGX, the country’s maiden and only gas exchange.
The move towards diversification comes at a time when the corporate isn't ready to sell its produce at viable rates. the corporate has made numerous representations to the govt about the strain faced because of low gas prices. the govt price of domestic gas is currently at $1.79 per million British thermal units (mBtu), whereas the firm’s average output cost is around $3.7/mmBtu. quite 95% of the gas currently produced by ONGC is sold at government determined rates.