The Financial Express : Jul 02, 2020, 09:00 AM
New Delhi: ONGC reported a loss of Rs 3,098.3 crore on a standalone basis for the quarter ended March 31, against a profit of Rs 4,239.5 crore recorded in the same period a year ago. The state-run oil and gas-producing company attributed the loss to the impairment loss of Rs 4,899 crore recognised in the quarter to factor in the estimated future crude oil and natural gas prices.The company produced 5.8 million tonne of crude oil in the quarter from its ageing oilfields, recording an annual drop of 1.4%. Its natural gas output fell 7.9% year-on-year to 6 billion cubic metres. ONGC’s realisation from crude oil from its nominated fields fell 20.9% to $49 per barrel during the March quarter, compared with the year-ago period. Revenue from operations was down 19.8% to Rs 21,456.2 crore in the quarter.The company is grappling with under-recoveries stemming from low crude prices. Analysts have pointed out that lower oil & gas prices and disruption in demand for refined products can weaken the company’s cash flow and leverage till FY22-end. The company, which produces about 65% of domestic crude oil, is also facing under-recoveries from its gas business, after the government slashed the price of domestic gas by 26% to $2.39 per million British thermal units (mmBtu), whereas the firm’s average output cost is around $3.7/mmBtu.ONGC is understood to have requested the government to consider exempting it from payment of cess, royalties and profit petroleum until crude prices are less than $45/barrel. The company has declared 12 discoveries (7 onland, 5 offshore) during FY20 in its operated nomination acreages. During FY21, ONGC has notified three discoveries so far.