India’s state-run oil explorer Oil and Natural Gas Corp ((ONGC) reported a 91.7% drop in net profit to 4.96 billion rupees during the first quarter of the financial year due to a slump in crude oil prices.
Its revenues fell 51% to 13.01 billion rupees as a nationwide lockdown to check the Covid pandemic impacted fuel demand.
ONGC said it realised $28.72 for every barrel of crude oil it sold during the quarter, down from $66.32 a barrel in the same period a year back. Earnings were also impacted by lower production volumes, which fell by 10% during the quarter.
Gas price realisation fell 35.2% to $2.39 per million British thermal unit.
“The revenue and net profit for Q1 have been impacted by lower crude price realization,” ONGC said, adding that lower gas prices also contributed to lower top-line and bottomline.
ONGC said it made three discoveries during the current fiscal, including natural gas finds in KG blocks and Tripura, which will improve its prospects in the future.
“We expect (ONGC’s) earnings to improve over the next 6-12 months as oil prices have rebounded from the low levels seen in March and have now stabilised around $42-45/barrel,” said Sweta Patodia, analyst corporate finance at Moody’s Investors Service.