ONGC Profit Surges Amid Higher Oil Prices and Increased Gas Earnings
India's Oil and Natural Gas Corporation (ONGC) has seen its quarterly profit more than double due to higher crude oil prices, a weaker rupee, and increased earnings from gas production. The company reported net income of 170.34 billion rupees ($1.8 billion) for the quarter ended June, beating an average estimate compiled by Bloomberg.
ONGC's revenue jumped 45% from a year earlier to 464.60 billion rupees, while it earned 50.4% more on every barrel of crude sold compared to last year. Earnings from gas produced at legacy fields rose 5.4%, and earnings from newer deepwater acreage increased by 61.5%. However, production did not cooperate, falling 3.4% to 9.4 million metric tons of oil equivalent due to aging fields declining and slower-than-expected growth in newer projects.
ONGC's central role in India's efforts to reduce import dependence is highlighted by its supply of about two-thirds of the country's oil and more than half of its gas. The company plans to build a 13-million-barrel storage facility at Mangaluru, with half reserved for strategic stocks, as India seeks to boost its existing strategic reserves which cover only about eight days of demand.