ONGC Declares Q4FY23 & FY23 Results, Sets ₹ 1L cr to scale up Green Energy, Targets Net-Zero By 2038 and Plans Capex of ₹30,125 crore in FY24: Arun Kumar Singh, Chairman & CEO

 by Samiksha Chogule

Highlights:

• Gross Revenue Rs. 36,293 crore in Q4FY’23, up by 5.2 %;Rs.1,55,517 crore in FY’23, upby40.9%
• Total dividend for FY’23 Rs.11.25 per share(225%) considering interim dividend of Rs.10.75 per share (215%) and Final dividend of Rs.0.50 per share(10%)
• Eight discoveries made and three monetized in FY’23
• ONGC to invest Rs 1 trillion in green energy, to bid for offshore wind project
• ONGC to invest Rs 1 lakh cr in energy transition, targets net-zero by 2038

State-run exploration and production major, Oil and Natural Gas Corporation (ONGC) Board of Directors in its 364thMeeting held on 26thMay, 2023, approved the annual results for FY’23. The Financial Performance Tesults for Q4 FY23 & Full Year FY23 were announced today at a press meet held in Mumbai.

1. Financial Performance (Standalone)

Particulars	Q4FY’23	Q4FY’22	% Var	FY’23	FY’22	% Var
Gross Revenue (Rs. Crore)	36,293	34,497	5.2	1,55,517	1,10,345	40.9
Exceptional items (including current year provision for ST/GST on royalty)*	(12,107)	–	–	(12,107)	–	–
Profit/(loss) Before Tax (PBT) * (Rs. Crore)	(979)	11,714	(108.4)	50,395	41,040	22.8
Profit/(loss) After Tax (PAT)* (Rs. Crore)	(248)	8,860	(102.8)	38,829	40,306	(3.7)
The company has reviewed the entire issue of disputed Service tax and GST on royalty and has decided to make a provision towards these disputed taxes as a prudent and conservative practice. Accordingly, during the quarter and year ended March 31, 2023, the Company has provided Rs. 12,107 crore towards disputed taxes of ST/GST on Royalty for the period from April 1, 2016 to March 31, 2023 together with interest thereon.   The above adjustments have adversely impacted the profitability for Q4 and FY’23. However, the Company shall continue to contest such disputed matters before various forums based on the legal opinion.
Crude Oil Price-Nominated
Realization (US$/bbl)	77.12	94.98	(18.8)	91.90	76.62	19.9
Realization (Rs./bbl)	6,344	7,147	(11.2)	7,388	5,709	29.4

Particulars	Q4FY’23	Q4FY’22	% Var	FY’23	FY’22	% Var
Crude Oil Price-JV
Realization (US$/bbl)	77.11	95.53	(19.3)	93.02	77.15	20.6
Realization (Rs./bbl)	6,343	7,189	(11.8)	7,478	5,748	30.1
Gas Price
Price on GCV basis ($/mmbtu)	8.57	2.90	195.5	7.34	2.35	212.3

• Dividend pay out

The total dividend for FY’23 would be 225% (Rs.11.25 per share of face value Rs 5 each) with a total payout of Rs. 14,153 crore. This includes interim dividend of 215% (Rs. 10.75 per share) already paid during the year and final dividend of 10% (Rs.0.50 per share) recommended by the Board.

• Production Performance

Particulars	Q4FY’23	Q4FY’22	% Var	FY’23	FY’22	% Var
Crude Oil–ONGC (MMT)	4.518	4.651	(2.9)	18.540	18.604	(0.3)
Crude Oil–JV share (MMT)	0.442	0.513	(13.8)	1.901	2.162	(12.1)
Condensate (MMT)	0.275	0.226	21.7	1.044	0.941	10.9
Total Crude Oil (MMT)	5.235	5.390	(2.9)	21.485	21.707	(1.0)
Gas – ONGC (BCM)	5.073	5.167	(1.8)	20.628	20.907	(1.3)
Gas – JV share (BCM)	0.188	0.172	9.3	0.723	0.773	(6.5)
Total Gas (BCM)	5.261	5.339	(1.5)	21.351	21.680	(1.5)
Value Added Products (KT)	612	753	(18.7)	2,598	3,089	(15.9)

The decrease in oil/gas production is mainly due to delay in implementation of KG-98/2, cluster-II project and less than envisaged production from WO-16 and Cluster-7 and reservoir issues in S1-VA fields. 

Exploration Performance 

Discoveries notified during FY 2022-23:

ONGC has declared total 8 discoveries (5 in onland and 3 in offshore) during FY 2022-23 in its operated acreages. Out of these, 3 (2 in onland and 1 in offshore) are prospects and 5 (3 in onland and 2 in offshore) are pools.

The details of the latest discovery notified during FY 2022-23, since last press release in this regard on 14.02.2023 are as under:

(i) Hatipoti-1(NGAE)in Mekeypore-Santak-Nazira ML, Assam & Assam Arakan Basin

Exploratory well Hatipoti-1(NGAE) in Mekeypore-Santak-Nazira ML, Assam & Assam Arakan Basin flowed oil @ 142 m3/day and gas@29,101 m3/day from one object and oil @ 34.55 m3/day and gas @ 14,328 m3/day from another object. This success has opened up the play in this area for further exploration. The discovery has been put on production through fast track monetization.

Out of eight discoveries notified during FY 2022-23, three discoveries viz. Mandapeta-60, Kesanapalli West Deep-7 and Hatipoti-1 have been monetized by ONGC during the year itself.

• Discoveries notified during FY 2023-24:

During FY 2023-24, ONGC has notified two new prospect discoveries so far (both in offshore OALP blocks).

(i) MBS182HDA-1 (MBS182HDA-A) in OALP block MB-OSHP-2018/2, Mumbai Offshore Basin

Exploratory well MBS182HDA-1 (MBS182HDA-A) in OALP block MB-OSHP-2018/2, Mumbai Offshore Basin flowed oil @ 786 BPD and gas@ 7,154 m3/day. The discovery has been named as “Moonga”.

(ii) MBS181HCA-1 (MBS181HCA-A) in OALP block MB-OSHP-2018/1, Mumbai Offshore Basin

Exploratory well MBS181HCA-1 (MBS181HCA-A) in OALP block MB-OSHP-2018/1, Mumbai Offshore Basin flowed oil @ 1,668 BPD and gas@ 90, 672 m3/day. The discovery has been named as “Moti”.

• Reserve Accretion (Estimated Ultimate Recovery: EUR, 2P): FY’23

(in MMTOE)
ONGC operated domestic areas	40.62
ONGC share in Domestic JVs	0.42
Total Domestic	41.04
ONGC Videsh’s Share in Foreign Assets	6.62
ONGC Group	47.66

• Reserve Replacement Ratio (RRR) of ONGC-Operated Domestic Areas

Reserve Replacement Ratio (2P) from domestic fields (excluding JV share) was 1.01. With this, ONGC has achieved Reserve Replacement Ratio (2P) of more than one for the 17th consecutive year.

• Consolidated Financial Results

1.	Consolidated TurnoverRs.6,84,829Crore in FY’23 as against Rs.5,31,793Crore in FY’22
2.	Consolidated Group Net Profit (PAT) Rs.32,778 Crorein FY’23 as againstRs.49,294 Crore in FY’22

• ONGC Group of Companies

1.	Oil and Natural Gas Corporation Ltd
2.	Subsidiaries:
i	ONGC Videsh Ltd
ii	Hindustan Petroleum Corporation Ltd
iii	Mangalore Refinery and Petrochemicals Ltd
iv	Petronet MHB Ltd
3.	Joint Ventures
i	ONGC Petro Additions Ltd
ii	ONGC Tripura Power Company Ltd
iii	Mangalore SEZ Ltd
iv	Dahej SEZ Ltd
v	ONGC TERI Biotech Ltd
vi	Indradhanush Gas Grid Ltd
4.	Associates:
i	Petronet LNG Ltd
ii	Pawan Hans Helicopters Ltd
iii.	Rohini Heliport Ltd.

• ONGC Videsh Ltd

Production

ONGC’s overseas arm, ONGC Videsh Ltd. registered production of oil and gas of 10.171 MMTOE in FY’23, as compared to 12.330 MMTOE in FY’22. Key factors affecting overseas production include Russia-Ukraine conflict leading to declaration of Force Majeure with effect from 21st April 22, FPSO shutdown in BC-10; expiry of Nare Association Contract in MECL Colombia with effect from 4th November 2021; Wells resumption deferment and heavy floods in GPOC, South Sudan and Block 06.1, Vietnam project nearing end of life/expiry.

Production	Unit	FY’23	FY’22
Crude Oil	MMT	6.349	8.099
Natural Gas	BCM	3.822	4.231
Total Oil and Oil Equivalent Gas	MMTOE	10.171	12.330

Turnover

The Company has achieved a turnover of Rs.11,676 crore during FY’23 against the turnover of Rs. 17,322 crore during FY’22.

Profit After Tax (PAT) and Dividend

The Company registered a PAT of Rs.1700 crore in FY’23, as against a PAT of Rs. 1,589 crore in FY’22. The Board of Directors of the Company has recommended final dividend of Rs. 0.50 per share on fully paid equity share par value of Rs. 100 each, subject to approval by the shareholders. The total dividend amounts to Rs.75 crore.

• Hindustan Petroleum Corporation Ltd (HPCL)

Refining throughput and Sales Volume

Highest ever combined crude thru-put of 19.09 MMT was achieved by HPCL in FY 22-23 with a growth of 36.7% over 13.97 MMT crude processed during FY 21-22.Highest ever annual MS, HSD and LOBS production was also achieved during the year.HPCL achieved its highest ever annual sales during FY22-23 of 43.45 MMT (39.14 MMT during corresponding period of previous year) with growth of 11%.

With commissioning of 1,161 new Retail outlets, HPCL has crossed the milestone of 21,000 Retail outlets during the year and has a total of 21,186 Retail outlets under its network.

Gross Refinery Margin (GRM)

The combined GRM for HPCL Refineries for FY2022-23is US$ 12.09/bbl compared to US$ 7.19/bbl in the corresponding previous year.

Turnover and PAT

HPCL reported its highest ever Revenue from Operations of Rs. 4,66,192 crore for FY 2022-23 as against Rs. 3,73,897 crore last year, growth of 24.7%. For the FY 22-23, exceptionally high international oil prices along with suppressed marketing margins on select Transport fuel, had severely impacted the profitability, resulting in Net Loss of Rs. 8,974 crore for FY 2022-23 as compared to Profit after Tax (PAT) of Rs 6,383 crore during the corresponding period of previous year.

• Mangalore Refinery and Petrochemicals Ltd (MRPL)

Throughput

MRPL achieved highest ever throughput of 17.14 MMT for the FY’23 as against 15.05 MMT during last yeardue to increase in demand.

During the year the company has added 31 Retail Outlets making total retail outlets to 63 as on 31.03.2023.

Turnover

MRPL has achieved revenue from operations of Rs.1,24,736 croreduring FY’23as against Rs.86,094crore during the FY’22

Gross Refinery Margin (GRM)

MRPL registered a GRM of US$ 9.88/bblduring FY’23 as against GRM of US$ 8.60/bblduring FY’22.

Profit After Tax (PAT)

MRPL has posted net profitof Rs.2,638 crore in FY’23 as against Rs.2,955 crore in FY’22.

1. Petronet MHB Limited (PMHBL)

Petronet MHB Limited (PMHBL) is a subsidiary company of ONGC where ONGC and its subsidiary HPCL hold 49.99% shareholding each. PMHBL achieved throughput of 3.894 MMT during FY’23. PMHBL has earned total revenue of Rs. 168 crore with profit of Rs. 85 crore in FY’23. During the year PMHBL has paid interim dividend of Rs. 1.47 per equity share and ONGC got its share of dividend amounting to Rs. 40.33 crore.

1. ONGC Petro additions Limited (OPaL)

ONGC Petro Additions Ltd (OPaL) a JV company of ONGC has stabilized its operations and has established itself in domestic / export market with sale of prime grade products. OPaL operated at average 95% capacity in FY’22-23. OPaL has earned revenue from operations of Rs. 14,593 crore during FY’23 as against Rs. 16,048 crore during FY’22. OPaL has reported EBIDTA of Rs.486 crore in FY’23. The company has successfully completed its first major turnaround (MTA) in the current financial year.

1. ONGC Tripura Power Company (OTPC)

OTPC’s two power units of 363.3 MW each are fully operational. Power generation increased to 4936 MU in FY 23 as compared to 4124 MU in FY 22. This is the highest production by any gas based power station in India for FY 23.

In FY’23, OTPC has earned revenue from operations of Rs. 1,631 crore and PAT of Rs. 201 crore. The company has paid interim dividend of 7% i.e. Rs. 0.70 per share during the year. The company has also declared final dividend of 6% i.e. 0.60 per share. ONGC would get a total dividend of Rs. 72.8 crore from OTPC for FY’23.

1.  Other Highlights:

• ONGC received Gold Award in Risk Management Category by Grow Care India on 03rd April 2023, recognizing the effectiveness of established Risk Management Process in the governance structure during FY 2022-23.

• On 25 March 2023, ONGC received Green Ribbon Champions Award for biodiversity conservation by CNBC, Network18 Group, in recognition of its commitment to sustainability and consistent efforts in protecting biodiversity surrounding its operational areas.

• On 16 February 2023, ONGC conferred with Governance Now 9th PSU Award for its contributions to nation-building & Corporate Communications Team received the Governance Now 9th PSU Award that recognizes its outstanding Communication Outreach.

• ONGC was awarded for being the ‘Leading Alternative Dispute Resolution (ADR) User 2023’, on behalf of its contributions to ADR by the Asia Pacific Center for Arbitration and Conciliation (APCAM) at its first International ADR Summit in New Delhi during 6-7 May 2023.

• ONGC has received a Certificate of Merit for FY 2022-23 at the 35th CFBP Jamnalal Bajaj Award for “Fair Business Practices” in the Manufacturing Enterprises-Large Category.

• On 12 April 2023, ONGC signed MoU with French research & training organization IFPEN in Paris

• Institute of Drilling Technology (IDT) Dehradun &RelyOnNutec Digital inked MoU on 21 March 2023 for collaboration in areas of training, knowledge-sharing, competency & management

• On 25 April 2023, ONGC secured patent from Government of India for “Composition for Completion fluid for use in ultra-High Pressure & High Temperature applications”.

• On 4 March 2023, ONGC secures patent from Government of India for reassessmentof offshore platforms based on innovative reverse engineering.

• ONGC Energy Center (OEC) received a patent from Controller General of Patents, Designs and Trademarks under Ministry of Commerce & Industry, Govt of India, on 24 April 2023 for developing a novel catalyst system for CO2 valorization.

ONGC’s premier Institute Keshava Deva Malaviya Institute of Petroleum Exploration (KDMIPE) received its third patent in FY 2022-23 on “Development of geochemical methodology to characterize diagenesis in sandstone reservoirs” on 28 March 2023.

Indian state oil firms have invested USD 5.46 billion in buying stakes in four different assets in Russia. These include a 49.9 per cent stake in the Vankorneft oil and gas field and another 29.9 per cent in the TAAS-Yuryakh Neftegazodobycha fields.

India’s flagship overseas firm ONGC Videsh Ltd (OVL) has less than USD 100 million of dividend income lying in Russia because of Ukraine conflict but the company is not in a hurry to bring it back, a senior official said to GPN

OVL, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), got its last dividend back in July 2022. One dividend payout that came after that is lying in the company’s account in Russia. OVL managing director Rajarshi Gupta said the dividend income lying in Russia is “less than USD 100 million.”

“We are not in a hurry to get it back as the company has capital and operating expenses for the three projects in Russia,” he said. “It is business as usual as far as dividend is concerned.”

He said the company is looking at right banking channels and discussions are on. Last week, Oil India officials said USD 300 million dividend income of the company and its partners are stuck in Russia.

The consortium of OIL, Indian Oil Corporation (IOC) and Bharat PetroResources Ltd has stakes in two projects.

OVL holds interest in Russia through a Singapore subsidiary.Moscow declared Singapore as an unfriendly nation last year and so money from Russia cannot flow to any company incorporated in that country.

The dividend from TAAS was paid on a quarterly basis, while Vankorneft’s earnings were paid half-yearly. The Indian firms are looking at options of how to repatriate the money from Russia, he said.

OVL holds a 26 per cent stake in Suzunskoye, Tagulskoye and Lodochnoye fields — collectively known as the Vankor cluster in the north-eastern part of West Siberia.

Indian Oil Corp (IOC), Oil India Ltd (OIL) and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp Ltd or BPCL) hold another 23.9 per cent in Vankor. Russia’s Rosneft is the operator with 50.1 per cent interest.

The consortium of OIL, IOC and Bharat PetroResources has a 29.9 per cent stake in TAAS-Yuryakh Neftegazodobycha. The operations of the fields have not been impacted and they continue to produce as normal.

OVL also has a 20 per cent stake in the Sakhalin-1 oil and gas field in Far East Russia, and in 2009 acquired Imperial Energy, which has fields in Siberia, for USD 2.1 billion.

OVL, which has 32 oil and gas properties in 15 countries from Venezuela to Vietnam, had seen oil production fall to 6.349 million tonne in 2022-23 fiscal (April 2022 to March 2023) from 8.099 million tonne in the previous year.

Gas output also dipped to 3.822 billion cubic meters from 4.231 bcm in 2021-22. The lower production was because of halting of operations at Sakhalin-1 for seven months after operator Exxon declared force majure post Ukraine war.

But higher oil prices help it post a net profit of Rs 1,700 crore in FY23 as against a PAT of Rs 1,589 crore in the previous fiscal.

ONGC Chairman & CEO Arun Kumar Singh said here today at a press briefing that ONGC will invest Rs 1 lakh crore by 2030 on energy transition projects as it targets net zero carbon emissions by 2038.

The firm joins fellow state-owned oil and gas firms Indian Oil (IOC), Hindustan Petroleum (HPCL), GAIL and Bharat Petroleum (BPCL) in preparing roadmaps for net zero emissions as part of the nation’s commitment to deal with the climate challenge.

Net-zero for a company means achieving a balance between the quantum of greenhouse gases it places into atmosphere and the amount it takes out.

“We have done our internal workings and are now confident that we can achieve net-zero for Scope-1 and Scope-2 emissions by 2038,” Singh said, adding that the company will invest Rs 1 lakh crore towards the same. As part of the initiative, ONGC wants to grow its renewable power portfolio to 10 gigawatts (GW) by 2030 from 189 megawatts at the end of March. Of this, the company has already signed an MoU to set up 5GW and is scouting for opportunities to set up another 5GW.,” Singh told GPN.

The company is planning to scale up electricity generation from renewable sources from 189 MW to 1 GW by 2030. It already has 5 GW of project planned in Rajasthan and is scouting for a similar capacity, he said adding ONGC would also look at offshore wind farms.

It is also looking at setting up a 1 million tonne per annum green ammonia plant at Mangalore.

“Overall, the investments will be of the order of Rs 1 lakh crore,” he said.

The company reversed the declining trend of oil and gas production in 2022-23 and is now looking at raising output with projects both on the east and west coast.

ONGC produced 19.584 million tonne (MT) of oil in 2022-23, up from 19.545 MT of previous year. The output is likely to rise to 21.263 MT in the current fiscal (April 2023 to March 2024), to 21.525 MT in 2024-25 and 22.389 MT in the following fiscal.

Natural gas output is slated to rise from 20.636 billion cubic meters (bcm) in 2022-23 to 23.621 bcm in 2023-24, 26.08 bcm in the following year and 27.16 bcm in 2025-26.

This rise in output is due to projects the firm is implementing on both the east and west coast to raise productivity from current fields and bringing new discoveries into production.

As much as Rs 61,200 crore is being invested in 14 development and nine infrastructure projects including KG gas field and rejuvenation of existing producing fields like Mumbai High North and Heera.

ONGC has announced a capital expenditure plan of ₹30,125 crore for FY24 as compared with ₹30,208 crore in the previous year and the plan would be fully-funded through internal accruals, “The Capex is to sustain and grow. Cashflow-wise ONGC has no problem,” its Chairman & Managing Director Arun Kumar Singh said.

The company, which has 1.62 lakh square kilometer of acreage, is looking to take the acreage to 5 lakh square kilometer by acquiring one lakh square km every year, spending Rs 10,000 crore annually on exploration.

He also said that the company would expand its petrochemicals capacity at its MRPL unit and also at its refinery in Bhopal.

Mr. Singh said the company would ramp up production this year as there was a 5% decline in crude production in FY23.

The company will search for more crude and gas from new fields in India as the government has opened up 1 million sq kms of area which was earlier considered no-go due to security concerns.