The aggregate net profit for major oil exploration and production companies grew 0.92% in the September quarter, primarily led by Reliance Industries Ltd. Despite an increase in sales production, the aggregate revenue fell 0.44% due to a decrease in price realisations amid volatile crude prices.
Oil India Ltd.’s net profit declined 70% year-on-year, mainly due to a one-time loss of Rs 2,366.8 crore allocated for ongoing litigation in the quarter. Oil and Natural Gas Corp. also experienced a 20% dip in net profit due to decreased sales of crude oil. ONGC’s per-barrel realisation from nominated fields declined 11% to $84.84 from $95.50, and the realisation for crude oil from joint venture partners dropped from 16% to $79.41 from $94.96 per barrel.
Weak Revenue Growth Revenue from Reliance Industries’ oil and gas segment increased significantly at 72%, with incremental production of gas and condensate from the MJ field. However, the O2C segment’s revenue declined 7.3%, with 14% decrease in crude oil prices leading to lower price realization for products. Oil India’s revenue fell 7%, but were up 38% on a sequential basis, beating analysts’ estimates. ONGC also saw an 8% decline. Strong Operating Performance The upstream companies saw an aggregate Ebitda growth of 24% and a margin improvement of 24.22 basis points. Reliance Industries achieved the highest Ebitda growth at 32%, reaching Rs 40,968 crore. The record quarterly Ebitda in the O2C segment, driven by a 66% boost in profitability from gas and condensate production in the MJ field, contributed to this success. The O2C segment saw a 36% and a 6.6% increase in the Ebitda, with the sequential improvement attributed to higher transportation fuel cracks and a 23% recovery in PVC profit margin. The firm maintained strong operating performance due to robust PVC and gasoline cracks, solid domestic demand, and advantageous O2C feedstock sourcing.
Oil India saw 31% Ebitda growth with a substantial 13.39 basis point margin improvement, driven by the company’s continued improvement in crude oil production, which was higher by 5.7% at 0.835 million tonne in Q2. ONGC saw the least yearly Ebitda growth at 6.38%. Production Levels ONGC’s production decline is mainly due to reduced output from matured and marginal fields. To counter this, the company is proactively implementing well interventions and initiating new well-drilling activities in these fields. A shutdown in the Panna-Mukta offshore oilfield, aimed at enhancing evacuation capacities and upgrading offshore facilities, resulted in temporary production losses after taking over from the JV partner.
Cyclone Biparjoy in June impacted both offshore and onshore production operations, with wells in a southern asset experiencing stoppage, contributing to the overall production challenges.
Reliance Industries’ Q2 revenue growth was higher mainly on the account of higher production of oil and gas, and commencement of condensate production from MJ field along with 6% higher gas price realization in KG D6. Production at KG D6 was up 66% year on year, while CMD production was down 12%.
Source: (bqprime.com)