ONGC's Fiscal Challenge: Profits Drop Amid Static Output and Lower Oil Prices

State-owned Oil and Natural Gas Corporation (ONGC) has reported a significant 35% decrease in its net profit for the fourth quarter of the fiscal year, attributing the decline to diminishing oil prices despite nearly stable production levels. The company's net profit fell to Rs 6,448 crore for January through March from Rs 9,869 crore in the same period last year. Its revenue, however, saw a marginal rise, standing at Rs 34,982 crore, a modest 1% increase.

ONGC's crude oil output was marginally lower at 4.7 million tonnes compared to the previous year's 4.714 million tonnes. Meanwhile, natural gas production fell to 4.893 Billion Cubic Metres (BCM) from 4.951 BCM in the respective quarter. For the full financial year, average oil price realization saw a decline of 4.8% to USD 76.90 per barrel.

The firm has been aggressively drilling, achieving a record 578 wells, in response to government incentives permitting higher pricing for new gas. While there are challenges, notably a 12% fall in annual net profit to Rs 35,610 crore, ONGC remains committed to exploration. The company made nine new discoveries, monetizing eight of them within the fiscal year.

(With inputs from agencies.)