ONGC Reports 15% Net Profit Drop Amid Higher Exploration Costs

State-owned Oil and Natural Gas Corporation (ONGC) on Monday reported a 15 per cent drop in its June quarter net profit due to higher exploration cost write-offs.

Its net profit for April-June stood at Rs 8,938.10 crore, a decline from Rs 10,526.78 crore in the same period last year, as per its stock exchange filing. The profit also fell sequentially compared to Rs 9,869.37 crore in the January-March quarter.

India's largest crude oil and natural gas producer wrote off Rs 1,669.73 crore for unsuccessful exploratory endeavors, which significantly impacted the company's earnings despite rising oil prices. Revenue from operations increased to Rs 35,266.38 crore from Rs 33,814.33 crore last year.

Despite receiving USD 80.64 per barrel of crude oil sold to refiners, a rise from USD 70.64 per barrel last year, the higher write-offs neutralized these gains. Oil production remained steady at 4.629 million tonnes, but natural gas output dipped by 3.6 per cent to 4.86 billion cubic metres. Additionally, ONGC realized a lower gas price at USD 6.5 per million British thermal units against USD 6.71 in the previous April-June period.

ONGC announced making five oil and gas discoveries so far this financial year but did not disclose the reserve estimates or potential production figures.

(With inputs from agencies.)