Offshore, onshore volumes to be better in FY16: ONGC

Impact on realizations impacted the second quarter profits, AK Srinivasan, Director-Finance, ONGC told CNBC-TV18. ONGC’s net profit fell 11.3 percent to Rs 4,842 crore against Rs 5,460 crore quarter –on-quarter and revenue declined 9.4 percent to Rs 20,679 crore. Earnings before interest, tax, depreciation and amortization (EBITDA) fell 17 percent to Rs 8,775 crore quarter-on-quarter. In the second quarter, crude oil production was up by 1.9 percent and gas volumes rose 0.44 percent. Offshore volumes grew at a faster pace than on-shore volumes, Srinivasan said. Volume growth, offshore and onshore, both will be bettre in FY16, he said.The volumes of Rajasthan joint venture (JV) were flat in Q2 and the price realization was lower than Q1, he said. Srinivasan is hopeful of maintaining margins in coming quarters if the crude prices remain at current levels. Below is the transcript of AK Srinivasan’s interview with Kritika Saxena and Varinder Bansal on CNBC-TV18.Kritika: The analysts are saying that it is a stable set of numbers. What really were the pressure points and where do you stand as far as the margins are concerned at this point in time?A: We had a good realisation compared, but that was definitely not very good as compared to Q1. My realisation was something about 48.83 in the second quarter. However, we had certain expenses also, and that has brought down our profits to some extent. And we look forward that in the coming year, if the crude remains around stable, then we should be able to move forward in a better way.Varinder: You are talking about the gross realisations or the net realisations?A: Gross realisations were around Rs 20,000 for this quarter. It was Rs 20,000, the exact numbers I will just give you.Varinder: In dollars per barrel?A: Dollars per barrel was USD 48.93 per barrel was our realisation.Varinder: That is gross?A: Yes.Varinder: And what about the net realisations?A: Actually the gross realisation prior to the discount was USD 51.24 per barrel and net was USD 48.93. Varinder: Can you also update us on the subsidy? What was the subsidy situation in this quarter?A: We had shared about Rs 596 crore.Varinder: In the current quarter?A: Yes. Varinder: And what it could be going ahead in the Q3 and Q4?A: IT all depends on the crude prices. If the crude prices hover sub-USD 50, our level of subsidiary will be more than these numbers in coming quarters. Varinder: Can you also update me on what was the oil and gas production volumes this time?A: I will just let you know. My crude oil production, crude oil was including my share pout together was 5.66 percent.Varinder: How much was it up or down?A: It was up by 1.9 percent and my gas volumes also were up by 0.44 percent compared to my Q2.Varinder: So the problem what the company is facing is mostly the underlying which is the crude and the volumes are or the production volumes are still moving up. A: It is plus. We are positive on the volume side.Varinder: What could be the outlook going ahead for FY16 on the production and volume side considering the crude remains at these levels?A: We will be definitely doing more than the last year or 26 million metric tonnes (MMT) including my joint venture share. We will be up above on that.Varinder: What would the realisations because realisations for the company has been in the last 7-8 quarters, we have been seeing the realisations have been moving down one way.A: My realisation for the half year, H1 was to the tune of 53.72 per dollar post discount and 57.33 for H1 average. So, 3.61 was my subsidiary sharing.