India's ONGC reports 34% drop in profit in April-June
Indian state-owned oil and gas producer ONGC announced a 34% year/year decline in standalone net profit for the April-June quarter of fiscal year 2024 (Q1FY2024). The decrease was primarily attributed to lower realised oil prices.
According to the company's statement, net profit for the quarter amounted to 100.15bn rupees ($1.21bn), compared with the 152.06bn rupees recorded during the same period in the previous year. Additionally, revenue during the quarter stood at 338.14bn rupees, indicating a 20% yr/yr decrease.
ONGC reported an average realisation of $76.49 for each barrel of crude oil it produced, marking a significant drop from the $109.6 realised in the previous year. The rise in global oil prices last year was due to Russia's invasion of Ukraine.
Crude oil production also witnessed a decrease of 3.2% yr/yr, reaching 4.6mn tonnes, while gas output dropped 3.3% yr/yr to 5.04bn m3. ONGC attributed this reduction in output to several factors, including the shutdown of the Panna-Mukta offshore platforms for the commissioning of a new crude oil pipeline, the impact of cyclone Biparjoy, and the closure of crude oil wells in southern India.
In response to the production decline, ONGC assured that the current situation is temporary and anticipates compensating for this reduction in the upcoming quarters. The company expects to achieve this through the initiation of additional production from new projects, particularly the commencement of crude oil production from KG 98/2 in Q3 of the 2023-24 fiscal year.
During the quarter, ONGC also reported four discoveries, with one discovery on land and three discoveries offshore, within its operated acreages.