Top Indian Oil Producer’s Quarterly Earnings Miss Estimates
(Bloomberg) --
State-run Oil and Natural Gas Corp.’s quarterly profit missed estimates as crude oil prices slumped and production from aging fields remained subdued.
The New Delhi-based explorer’s net income declined 35% on year in the three months ended March 31 to 64.5 billion rupees ($753 million), according to a stock exchange filing. A Bloomberg survey of analysts had estimated an average profit of 85.03 billion rupees.
India’s largest oil and gas explorer is spending billions of dollars to not only ramp up production, but also diversify its portfolio to shield the core business from volatile oil prices. It’s investing in refineries, petrochemical ventures, trading of liquefied natural gas, as well as in renewable assets, to achieve its stated ‘net zero’ goal by 2038. Lower earnings could push it to raise more from the market to meet its expansion goal targets.
ONGC’s oil production from its own reserves during the quarter was nearly flat while that of gas declined 1.2%. Most of its fields are decades-old and witnessing a natural decline in output.
The company, which accounted for 65% of India’s oil and 52% of gas output last month, has entered into a technical partnership with BP PLC to increase output from its Mumbai offshore field. The alliance may help unlock $10 billion worth of new oil and gas production.
Revenue at the explorer rose 1% on year to 349.8 billion rupees in the fiscal fourth quarter. Its earnings on every barrel of crude sold declined 3.4% on year during the quarter to $74.2 while that from gas produced from old legacy fields was unchanged at $6.5 per million British thermal units.
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