Oil & Natural Gas Corp. s profit may rise from this quarter after the government more than doubled natural gas prices and freed gasoline rates from state control.
India s biggest energy explorer may add as much as 9 billion rupees ($193 million) to its profit and 16 billion rupees to its sales this quarter onward because of higher gas prices, Chairman and Managing Director R.S. Sharma said at a press conference in New Delhi yesterday.
Net income fell 25 percent to 36.6 billion rupees in the three months ended June 30, from 48.5 billion rupees a year earlier, ONGC said in a statement yesterday. That compares with the 38.5 billion-rupee mean estimate of 16 analysts surveyed by Bloomberg. The company is seeking to increase natural gas output 61 percent in six years from domestic areas and buy fields overseas to meet demand in Asia s third-biggest consumer.
We will have better results from this quarter because of the full impact of the higher gas prices, Sharma said. Subsidies will also come down because of the fuel price increases.
The government allowed ONGC to more than double gas prices to 6,818 rupees per thousand cubic meters from 3,200 rupees, Information Minister Ambika Soni said May 19. The explorer started charging the higher prices from June 1,Sharma said yesterday.
The nation freed gasoline prices from state control on June 25 and increased rates of diesel, cooking gas and kerosene helping cut losses at state-run refiners.
Positive Triggers
All of these will help ONGC put the first quarter behind them, said Deepak Pareek, a Mumbai-based analyst with Angel Broking Ltd. These are the positive triggers.
ONGC declined 1 percent to 1,246.55 rupees in Mumbai trading yesterday compared with a 0.2 percent gain in the benchmark Sensitive Index. The shares have climbed 5.8 percent this year.
The New Delhi-based explorer sold crude oil at $48.04 a barrel in the three months compared with $58.25 a barrel a year ago, according to the statement. Crude oil in New York trading averaged $81.48 a barrel in the quarter ended June 30, 17 percent higher than a year earlier. Crude for September delivery declined as much as 48 cents or 0.6 percent, to $76.51 a barrel, in electronic trading on the New York Mercantile Exchange, and traded for $76.73 as of 1:08 p.m. London time.
Profit Target
The explorer is targeting net income of 140.6 billion rupees and crude oil production of 27 million metric tons in the financial year ending March 31, ONGC said in a March 19 statement. The company plans to spend $5 billion to develop nine new gas discoveries off India s east coast, which may start production in 2016, two people with direct knowledge of the matter said July 26.
The company may consider bidding jointly with Vietnam Oil & Gas Group, also known as PetroVietnam, for BP Plc s stake in a gas field in Vietnam to secure fuel supplies, Sharma said July 22. Oil India, the nation s second-biggest state explorer, may be brought in as a partner, he said.
ONGC is seeking to diversify its supplies and keep pace with India s growing fuel needs as Finance Minister Pranab Mukherjee predicts the economy will expand more than 8.5 percent in the year ending March 31 and 9 percent the following year. The company plans to get the equivalent of 60 million tons of oil from overseas fields by 2025, or more than double its output in India.
The explorer, which currently produces about 62 million cubic meters a day of gas from its domestic fields, plans to boost output to 70 million cubic meters a day by 2012 and 100 million cubic meters a day by 2016, Sharma said.
India s biggest energy explorer may add as much as 9 billion rupees ($193 million) to its profit and 16 billion rupees to its sales this quarter onward because of higher gas prices, Chairman and Managing Director R.S. Sharma said at a press conference in New Delhi yesterday.
Net income fell 25 percent to 36.6 billion rupees in the three months ended June 30, from 48.5 billion rupees a year earlier, ONGC said in a statement yesterday. That compares with the 38.5 billion-rupee mean estimate of 16 analysts surveyed by Bloomberg. The company is seeking to increase natural gas output 61 percent in six years from domestic areas and buy fields overseas to meet demand in Asia s third-biggest consumer.
We will have better results from this quarter because of the full impact of the higher gas prices, Sharma said. Subsidies will also come down because of the fuel price increases.
The government allowed ONGC to more than double gas prices to 6,818 rupees per thousand cubic meters from 3,200 rupees, Information Minister Ambika Soni said May 19. The explorer started charging the higher prices from June 1,Sharma said yesterday.
The nation freed gasoline prices from state control on June 25 and increased rates of diesel, cooking gas and kerosene helping cut losses at state-run refiners.
Positive Triggers
All of these will help ONGC put the first quarter behind them, said Deepak Pareek, a Mumbai-based analyst with Angel Broking Ltd. These are the positive triggers.
ONGC declined 1 percent to 1,246.55 rupees in Mumbai trading yesterday compared with a 0.2 percent gain in the benchmark Sensitive Index. The shares have climbed 5.8 percent this year.
The New Delhi-based explorer sold crude oil at $48.04 a barrel in the three months compared with $58.25 a barrel a year ago, according to the statement. Crude oil in New York trading averaged $81.48 a barrel in the quarter ended June 30, 17 percent higher than a year earlier. Crude for September delivery declined as much as 48 cents or 0.6 percent, to $76.51 a barrel, in electronic trading on the New York Mercantile Exchange, and traded for $76.73 as of 1:08 p.m. London time.
Profit Target
The explorer is targeting net income of 140.6 billion rupees and crude oil production of 27 million metric tons in the financial year ending March 31, ONGC said in a March 19 statement. The company plans to spend $5 billion to develop nine new gas discoveries off India s east coast, which may start production in 2016, two people with direct knowledge of the matter said July 26.
The company may consider bidding jointly with Vietnam Oil & Gas Group, also known as PetroVietnam, for BP Plc s stake in a gas field in Vietnam to secure fuel supplies, Sharma said July 22. Oil India, the nation s second-biggest state explorer, may be brought in as a partner, he said.
ONGC is seeking to diversify its supplies and keep pace with India s growing fuel needs as Finance Minister Pranab Mukherjee predicts the economy will expand more than 8.5 percent in the year ending March 31 and 9 percent the following year. The company plans to get the equivalent of 60 million tons of oil from overseas fields by 2025, or more than double its output in India.
The explorer, which currently produces about 62 million cubic meters a day of gas from its domestic fields, plans to boost output to 70 million cubic meters a day by 2012 and 100 million cubic meters a day by 2016, Sharma said.
