Oil and Natural Gas Corporation (ONGC) announced a 30% drop in net profit for the September quarter after the government imposed a windfall tax to offset earnings from a surge in international oil and gas prices.
The business stated in a statement that its net profit in July-September 2022-23 was Rs 12,825.99 crore, or Rs 10.20 per share, compared to Rs 18,347.73 crore, or Rs 14.58 per share, in the same period last year.
Profit plummeted 15.6% from the previous June quarter when it declared a net profit of Rs 15,205.85 crore.
The company’s gross billing for crude oil produced increased 37.7% to USD 95.49 per barrel in the third quarter, up from USD 69.36 per barrel the previous year.
The state-owned ONGC sells crude oil, which is processed at refineries into gasoline, diesel, and other petroleum products, at worldwide benchmark prices that have risen since Russia invaded Ukraine.
However, on July 1, the government imposed a new tax to deduct benefits from the worldwide energy price spike.
The tax, which is adjusted every 15 days to reflect fluctuations in world oil prices, was as high as USD 40 per barrel when it was first implemented.
The company said that its board of directors has recommended an interim dividend of 135%, or Rs 6.75, on each equity share Rs 5. The overall compensation would be Rs 8,492 crore, with the government receiving the lion’s share.
ONGC’s oil and gas output fell 2% in the second quarter of the current fiscal year. In July-September, oil production was 5.36 million tonnes, compared to 5.47 million tonnes the previous year. Similarly, gas production in Q2 was 5.35 billion cubic meters, compared to 5.46 billion cubic meters in July-September 2021.
During the current fiscal year, the company made six discoveries on its KG basin acreage. “Of the six finds disclosed to far during FY 2022-23, two discoveries, Mandapeta-60 and Kesanapalli West Deep-7, have already been monetized by ONGC,” according to the release.