ONGC Net down due to unprecedented high subsidy burden
Summary of Q3 results (October - December 2007):
- Net Profit: 4,367 Crore, down 6.4 % from Rs. 4,668 Crore (in Q3 FY-07)
- Sales Revenue: 15,218 Crore, down 2.6 % (Rs. 15,631 Crore)
- Crude Oil production: 6.62 Million Metric Tonnes (MMT) [6.63 MMT]
- Natural Gas production: 5.78 Billion Cubic Meters (BCM) [up from 5.73 BCM]
- Value-Added-Products: 857 Kilo-Tonnes (KT) [874 KT], 102% of Q3 Target
Nine-month results (April - December 2007):
- Net Profit: Rs. 14,075 Crore (up 8.6 % from Rs. 12,961 Crore in 9-month in FY-07)
- Sales Revenue: Rs. 44,409 Crore (down 0.1% over Rs. 44,454 Crore)
- EPS: Rs. 65.80 (Rs. 60.60 per share)
- Crude Production: 19.5 MMT (up from 19.49 MMT)
- Natural Gas Production: 16.82 BCM (up from 16.62 BCM)
- Value-Added-Products: 2,442 Kilo-Tonnes (up from 2394 KT)
1.0 Oil and Natural Gas Corporation Ltd. (ONGC) has posted a Net Profit of Rs. 4,367 Crore, in the 3rd Quarter of fiscal 2007-08.
2.0 The turnover of the company is down 2.6% to Rs. 15,218 Crore, due to a subsidy pay-out of Rs. 6,080 Crore to the Oil Marketing Companies IOC, BPCL and HPCL. The pre-discount realization for Q3 is 91.19 US$ per barrel and post-discount realization is 54.52 US$ per barrel.
3.0 The net profit for the corresponding quarter last year (FY-07) was Rs. 4,668 Crore, after sharing a subsidy of Rs. 2,204 Crore.
4.0 The subsidy burden amounts to Rs. 13,528 Crore during the current 9 months as compared to Rs. 12,356 Crore in the corresponding period, last year.
5.0 Earnings-Per-Share (EPS) of ONGC for the 9-months of FY-08 has increased to Rs. 65.80 per share as compared to Rs. 60.60 per share for the corresponding period the year before.
ONGC made nine (9) discoveries during the October - December 2007 period. Out of these, four (4) are from new prospects and five (5) are new pool discoveries in earlier established fields. In the cumulative 9-month period of FY-08, ONGC has made 19 discoveries (9 from new prospects and 5 from new pool).
7.0 Some significant developments in Q3-08
7.1 New Projects: 2nd Pipeline Replacement Project
After the implementation of the Mumbai Redevelopment Project, Mumbai Offshore fields are expected to produce up to 2030. Hence, to strengthen the Pipeline network for Oil & Gas transportation, the ONGC Board approved the 2nd Pipeline Replacement Project along with necessary modifications, at a cost of Rs. 2553.25 Crore, to be implemented over a period of 3 years.
7.2 PY-3 Phase-III Development approved
The ONGC Board approved the Phase-III Development of PY-3 (In Cauvery Offshore) field at a Capex of US$ 35.9 million (Rs. 147.19 Crore), which is 40% of the total investment of US$ 89.75 million. ONGC holds 40% stake in the field; other stakeholders are HOEC (21%), Tata Petrodyne (21%) and Hardy Exploration & Production (18%). This Phase-III development of the field will enhance the recovery by 10.52 MMSTB (Million Metric Stock Tank Barrels).
8.1 First-ever Indian company in Fortune's list of World's Most Admired Companies, 2007
ONGC achieved the unique distinction of becoming the first-ever Indian company in the Fortune Magazines annual (2007) list of the World's Most Admired Companies. This is based on a survey of Fortune companies across the globe, conducted by the Fortune magazine, in association with Hay Group.
8.2 3rd CDM project registered with UNFCCC
The Oil major's third Clean Development Mechanism (CDM) project was registered with the United Nations Framework Convention for Climate Change (UNFCCC) on 21st December 2007. The project "Flare Gas Recovery project at Uran Plant" involves reducing Gas flaring from ONGC's Uran Plant and qualifies for a CDM project under fuel substitution category. This is a large scale project with an estimated estimated annual Carbon Credits (CER) of 97,740, equivalent to an annual earning of around Rs. 9.3 Crore of green revenue (1 CER drawing 16 Euro these days on a conservative basis).
9.0 ONGC Videsh Ltd. (OVL) Ã¢â‚¬â€œ bigger overseas footprints
9.1 ONGC Videsh Ltd. (OVL) wins two exploration blocks in Brazil
OVL bagged two exploration blocks in Brazil, viz. Deepwater Block 470 in the highly prospective Espirito Santo Basin and Shallow water Block 1413 in another highly prospective Santos basin, amid stiff competition from International companies on 27th November 2007.
9.2 ONGC-Mittal Joint Venture acquires 30% Participating Interest in Turkmenistan Exploration Block
ONGC Mittal Energy Ltd. (OMEL), a joint venture between OVL and Mittal Investment Sarl (MIS), acquired 30% Participating Interest (PI) in an exploratory Block 11-12, Offshore Turkmenistan in the Caspian Sea. Covering an area of 5663 square km, the block is located close to discovered and producing fields, and contains a number of prospects with significant reserve potential. Apart from OMEL, the other stakeholders in the block are Wintershall, a German company with 34% Participating Interest (PI) and Maersk Oil, a Denmark company with 36% PI.
10.0 Announcing the results, Mr. R S Sharma, Chairman & Managing Director, ONGC complimented Team ONGC for the nine discoveries in October-December 2007 and improvement in production for the cumulative 9-month period. He expressed optimism that going forward, ONGC will display better performance.
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