The Hindu Business Line : ONGC net up 50 pc on higher sales — Under-recoveries a drag on profits: Raha

The ONGC Chairman-cum-Managing Director, Mr Subir Raha, addressing a press conference along with Mr R.S. Sharma, Director-Finance, in the Capital on Monday. — Kamal Narang

New Delhi , June 20

ONGC has posted 50 per cent increase in net profit to Rs 12,983 crore during 2004-05.

The company's board has recommended final dividend of 200 per cent.

"This takes the total dividend for 2004-05 to 400 per cent, involving an outgo of Rs 5,704 crore," said Mr Subir Raha, Chairman and Managing Director.

Announcing the audited financial results of ONGC today, Mr Raha said that sales turnover rose by 44 per cent to Rs 46,712 crore in 2004-05 from Rs 32,512 crore last year.

The net profit would have been higher if the company had not been burdened with share of under-recoveries to the extent of Rs 4,104 crore (up 53 per cent from Rs 2,690 crore in 2003-04) with oil refining and marketing PSUs, he said.

He also expressed concern over further hit in profits due to controlled pricing of gas and related administrative instructions by the Petroleum Ministry.

According to Mr Raha, the company is also getting lower crude oil prices for its high-grade oil.

The average realisation is $39.

Earnings from each barrel of oil may rise to $52 a barrel in the first quarter ended June, compared to $36 in the same quarter a year ago, he added.

The company's oil production from own assets increased to 26.48 million tonnes from 26.06 mt the previous year.

However, gas production dipped to 22.97 billion cubic meters (BCM) from 23.58 BCM earlier.

ONGC's oil and oil equivalent gas output from all sources increased by 1.99 per cent to 58.42 mt oil equivalent from domestic and overseas fields.

On the total investment made by the company in 2004-05, Mr Raha said that it was to the tune of Rs 10,681 crore (Rs 6,852 crore).

The amount was mainly invested in exploration and production.

OVL, MRPL declare dividend: ONGC's subsidiary OVL has announced 35 per cent dividend while MRPL has declared 10 per cent dividend. ONGC's earnings per share increased by 50 per cent to Rs 91.05 during the year.

Mr Raha also said that ONGC plans to set up new refineries in Rajasthan and Andhra Pradesh with a capacity of five MMTPA each. Besides, the company plans to expand MRPL's capacity to 30 MMTPA.

"ONGC plans to set up a 5-7.5 MMTPA refinery at Barmer in Rajasthan to process crude oil found by Cairn Energy of the UK in the region."

The company has also proposed to set up a refinery at Kakinada to feed the eastern markets.

ONGC, which is operating the 9.69-million-tonnes-a-year MRPL at 12 million tonnes capacity through de-bottlenecking, plans to raise its capacity to 15 million tonnes by 2007-08 and double it by putting up a 15-million-tonne unit later.

On OVL, Mr Raha said that the company recently won a 15 per cent stake in an exploration block in Nigeria.

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