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State-run Oil and Natural Gas Corp.’s quarterly earnings missed estimates as a slump in production and crude prices offset gains from higher gas rates.
The New Delhi-based company’s net income declined 20% from a year earlier to 102.2 billion rupees ($1.2 billion) in the quarter ended September, according to a stock exchange filing. A Bloomberg survey of analysts had estimated an average profit of 111.45 billion rupees. Revenue declined 8.2% to 351.6 billion rupees.
ONGC follows some of its global peers, such as BP PLC, Chevron Corp. and Exxon Mobil Corp., which reported lower-than-expected earnings due to several reasons, including challenges in drilling and rising project costs.
ONGC’s earnings per barrel of crude oil averaged $84.8 a barrel during the quarter, compared with $95.5 a year earlier. Comparatively, gas prices for the quarter were up by 6.6% on year at $6.5 per million Btu.
Oil production from its own fields declined 1.9% to 4.5 million tons and gas fell by 3.1% to 5 billion cubic meters.
As most of ONGC’sfields are aging, it has signed pacts with companies such as Exxon Mobil, Chevron, and TotalEnergies SE to explore offshore and unconventional reservoirs.
ONGC, which accounts for about two-thirds of India’s oil and more than 50% of its gas output, is spending billions of dollars on deepwater and ultra-deepwater exploration to help one of the world’s biggest oil importers cut its reliance on overseas supplies.
Its output is set to rise to 47.6 million tons of oil and gas in the year that ends in March 2025, from 40.2 million tons in 2022-23, helped by relentless exploration, Avishek Datta, a research analyst with Mumbai-based Anand Rathi Share and Stock Brokers Ltd., said in a note.
The oil and gas explorer is “aggressively” bidding to buy solar assets, besides investing in petrochemical capacities as the company seeks to cut its carbon footprint and diversify revenue sources.
