Oil and Natural Gas Corporation (ONGC), India’s leading oil and gas exploration giant, recently announced a decline in its consolidated net profit for the December quarter of the financial year 2023-24. The company reported a decrease of approximately 8 percent, with net profit standing at Rs 10,748 crore. This dip in profitability was accompanied by a 2.2 percent decrease in revenue from operations, totaling Rs 1,65,569 crore for the third quarter, compared to Rs 1,69,213 crore in the same period of the previous year.
One of the significant factors contributing to this decline was the decrease in total crude oil production, which slipped by 3.3 percent to 5.2 million metric tonnes (MMT) in the third quarter of FY24 compared to the previous year. Moreover, ONGC’s total oil production in the first nine months of the fiscal year also witnessed a decline of 2.9 percent. The company attributed this reduction to various operational challenges, including the shutdown of Panna-Mukta offshore platforms for the commissioning of a new crude oil pipeline, the impact of cyclone Biparjoy, and natural decline from mature fields.
In response to these challenges, ONGC is proactively implementing measures to address the decline in output. The company is undertaking well interventions and advancing new well drilling activities to mitigate the production downturn. Additionally, ONGC anticipates a boost in oil production with the commencement of operations in the KG-DWN-98/2 block, located in the Krishna Godavari basin. This strategic move aligns with ONGC’s commitment to enhancing operational efficiency and sustaining long-term growth in the oil and gas sector.
Despite the operational hurdles, ONGC remains steadfast in its commitment to delivering value to shareholders. The company recently declared the second interim dividend of Rs 4.00 per share, reaffirming its dedication to rewarding investors. Eligible shareholders can expect to receive this dividend on or before March 10, 2024, underscoring ONGC’s financial stability and shareholder-friendly approach.
As ONGC navigates through the dynamic landscape of the oil and gas industry, it continues to focus on innovation, sustainability, and operational excellence. With a resilient spirit and strategic initiatives in place, ONGC aims to overcome challenges, capitalize on opportunities, and emerge stronger in the ever-evolving energy sector.