ONGC Profit Drops 14% Amid Low Oil Prices, But Beats Estimate

(Bloomberg) -- Oil and Natural Gas Corp., India’s largest oil and gas explorer, posted better-than-expected quarterly profit as lower windfall tax helped offset impact of the decline in oil and gas prices.

Still, net income fell 14% to 95.4 billion rupees ($1.1 billion) for the quarter ended Dec. 31, compared with 110.4 billion rupees a year-ago, according to an exchange filing on Saturday. That beat the average 91.56 billion rupees estimated by a Bloomberg survey of analysts. Revenue fell 9.8% to 347.9 billion rupees.

The state-owned explorer, which accounts for 67% of India’s oil and 54% its gas production, has chalked out an annual spending plan of around 300 billion rupees as it pursues production growth. It is also spending $2 billion to recapitalize its petrochemical subsidiary ONGC Petro additions Ltd, which will also help raise its stake in the venture to 95% from 49%. Higher earnings will help the New Delhi based firm meet its ambitious investment goals. 

ONGC’s quarterly oil production declined 3.3% and gas output fell 4.3% from a year earlier. Earnings on every barrel of crude declined 6.4% to $81.59 and that on gas fell 24.2% to $6.50 per million Btu. 

“To counter the decline in production from some of the matured and marginal fields, ONGC is taking proactive steps by implementing well interventions and advancing new well drilling activities,” the company said in a statement.

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