ONGC Q3 Net dips 64% to Rs Rs 1,286 crore, lowest in 15 years

New Delhi: State-owned Oil and Natural Gas Corp (ONGC) Thursday reported its lowest quarterly profit in more than 15 years as it took one-time impairment charge on reserves due to slump in oil prices.

Net profit of Rs 1,286 crore in October-December was 64 percent lower than Rs 3,571 crore in the same period a year ago, ONGC Chairman and Managing Director Dinesh K Sarraf told reporters here.

With oil prices slumping to 12-year low, it wrote down the value of reserves it holds by Rs 3,994 crore. The write- down is called impairment.

"It wasn't a bad quarter but for the impairment, we consciously took, to keep our balance sheet clean," he said adding but for the write-off the net profit would have been Rs 3,898 crore.

Revenue was down 2.3 percent to Rs 18,547 crore on falling oil prices, he said.

ONGC realised USD 44.34 per barrel in the third quarter, down from USD 50.56 a barrel net realisation in the same period a year ago.

Unlike last fiscal, the company did not have to pay any fuel subsidy in October-December as the government decided to make good all of the losses that state-owned fuel retailers incurred on selling kerosene and LPG at sub-market rates.

Previously, ONGC as well as Oil India Ltd had to make good a certain part of the losses.

Sarraf said crude oil production in the third quarter was marginally down at 6.52 million tons from 6.61 million tons a year ago while gas output fell 4 percent to 5.77 billion cubic meters.

"The company has assessed the indications of significant impairment as at December 31, 2015 due to fall in crude oil prices in the international market, and accordingly the company has tested its Cash Generating Units for the impairment. As a result, an amount of Rs 3,994 crore has been provided as impairment loss and shown as exceptional items for the quarter," Sarraf said.

He said the ONGC made 14 oil and gas discoveries in 2015-16.

In first nine months of current fiscal, ONGC reported net profit dropping 16 percent to Rs 11,588 crore. Revenue was however up 1.2 percent to Rs 62,147 crore.