ONGC Q2 Results: Net profit drops 30% to Rs 12,826 crore as govt levies windfall tax

Oil and Natural Gas Corporation (ONGC) reported 30 per cent fall in net profit for September quarter after the government levied windfall tax to take away gains arising from spurt in international oil and gas prices.

Net profit of Rs 12,825.99 crore, or Rs 10.20 a share, in July-September 2022-23 is compared with Rs 18,347.73 crore, or Rs 14.58 per share net profit in the same period a year back, the company said in a statement.

Profit fell 15.6 per cent over the preceding June quarter when it had reported Rs 15,205.85 crore net profit.

The company's gross billing for crude oil it produced soared 37.7 per cent to USD 95.49 per barrel in the quarter from USD 69.36 a barrel last year.

State-owned ONGC sells crude oil, which is refined at refineries to produce petrol, diesel and other petroleum products, at international benchmark rates which soared following Russian invasion of Ukraine.

However, the government beginning July 1 brought a new tax to take away gains accruing from global energy price surge.

The tax, which is moderated every 15 days in step with changes in global oil prices, was as high as USD 40 per barrel when the tax was introduced.

The firm also realised a higher USD 6.10 per million British thermal unit price for natural gas it produced in July-September as compared to USD 1.79 a year back.

Revenue was up 57.4 per cent to Rs 38,321 crore. ONGC had in July-September 2021 posted highest ever quarterly net profit by any Indian corporate after it opted for lower income tax in lieu of giving up exemptions.

As a result, its corporate income tax rate came to 22 per cent plus applicable surcharge and cess as against the earlier rate of 30 per cent plus applicable surcharge and cess.

The firm said its board has approved an interim dividend of 135 per cent, or Rs 6.75 on each equity share of Rs 5. The total payout will be Rs 8,492 crore, majority of it going to the government.

ONGC's oil and gas production dropped 2 per cent in second quarter of current fiscal year. Oil production of 5.36 million tonne in July-September is compared with 5.47 million tonne output a year back. Similarly, gas production of 5.35 billion cubic meters in Q2 is compared with 5.46 bcm output in July-September 2021.

The firm said it made six discoveries during current fiscal year in the KG basin acreage it holds. "Out of six discoveries notified till date during FY 2022-23, two discoveries viz. Mandapeta-60 and Kesanapalli West Deep-7 have already been monetized by ONGC," the statement said.