ONGC doubles profit on global rally

ONGC doubles profit on global rally

India's top oil and gas producer ONGC reported a tripling in net profit in the June quarter as it earned record prices before the government imposed a tax on windfall profits arising from a global rally in energy rates.

Oil and Natural Gas Corporation's net profit was $15,205. In April-June, 85 crore, or 12.09 per share, was compared to Rs 4,334. According to a stock exchange filing by the company, 75 crore or 3.45 a share was in the same period a year ago.

The profit was higher than the Rs 8,859. The company received USD 108.54 per barrel price for crude oil in the quarter compared to the USD 65.59 per barrel rate in the same period last year. Gas price realisation more than doubled to USD 6.1 per million British thermal unit from USD 1.79.

Since Russia invaded Ukraine in late February, international energy prices have been elevated, raising concerns about global shortages due to the nation's role as a key commodities supplier, especially to Europe.

West Texas Intermediate crude, the US oil benchmark, went up to a high of USD 130.50 per barrel in March, while International benchmark Brent crude came within striking distance of USD 140. It was the highest level of contract since 2008.

The rally prompted the government to impose a Rs 23,250 per tonne USD 40 per barrel windfall profit tax on domestically produced crude oil from July 1. In subsequent reviews the rate was reduced as global oil prices tumbled.

The price of oil has dropped below USD 100 a barrel this month due to recession fears, sparking fears that an economic slowdown will affect demand for petroleum products.

ONGC and other domestic crude oil producers, like Oil India Ltd and Vedanta Ltd, will lose earnings in the current quarter that began in July as a result of the windfall profit tax on domestic crude oil, which is currently at USD 17,750 per tonne.

ONGC said turnover rose to 42,320. In the first quarter of the current fiscal year, 72 crore were generated from Rs 23,021. In the same period last year, there were 64 crore.

The earnings were aided by a 2 per cent increase in crude oil production at 5.5 million barrels and a 1.4 per cent increase in gas output at 5.38 billion cubic meters.

In a statement, ONGC said it made two gas discoveries during the current fiscal.

A gas find was made in a block in West Bengal and another in a block in Andhra Pradesh.

In the same year, it had an average price of USD 76.62 per barrel and a gas rate of USD 2.35 per mmBtu.