ONGC production disappoints in Q2; higher crude oil prices are key

MUMBAI : State-run oil and gas producer Oil and Natural Gas Corp. Ltd’s (ONGC’s) September quarter results did not impress the Street. Even as the company’s stand-alone net profit of ₹6,263 crore was in line with the estimates of a Bloomberg poll of analysts, there were some disappointing factors.

Stand-alone net crude oil price realizations declined by 17% year-on-year to $60.33 a barrel, disappointing some analysts. Crude oil realization was lower sequentially as well, declining by 9%. Moreover, production performance was rather discouraging. ONGC’s total crude oil and gas production declined 4% and 2%, respectively, on a year-on-year basis. “Oil production has seen year-on-year decline in successive eight quarters while this is the first decline seen in gas production in 13 quarters,” said analysts at Centrum Broking Ltd in a report on 15 November.