Analysts predict that in the next quarters, state-owned oil firms may record increasing output

 Analysts predict that in the next quarters, state-owned oil firms may record increasing output

The state-owned Oil and Natural Gas Corporation reported a 2.8 percent decrease in natural gas output and a 2.1 percent dip in crude oil production at 5.2 MMT for the second quarter.

The output of crude oil decreased by 2.1 percent in the second quarter to 5.2 MMT, according to state-owned Oil and Natural Gas Corporation.

Analysts predict that ONGC, the state-owned company, would see an increase in output in the next quarters as a result of the start of production from the Krishna Godavari basin in the Bay of Bengal.

The oil producer reported a 2.1 percent decrease in crude oil output at 5.2 million metric tons (MMT) and a 2.8 percent decrease in natural gas production in the second quarter of FY24.

"In terms of production, the drop in gas and oil output will probably be made up for once the KG basin's output is put into commission in the next quarters. In a research, Prabhudas Lilladher said, "We factor in a volume CAGR (compound annual growth rate) of 4% and 6% for oil and gas during FY23-26E to reach 23.9 MMT of oil and 25.4 billion cubic meters (BCM) of gas in FY26E.

It is anticipated that in 2023, ONGC's deepwater project in the KG basin would start producing. It is anticipated that the project's output will stop the company's production decrease. It is anticipated that the block would produce around 23 MMT of oil overall and 50 BCM of gas overall.

escalating need

over 85% of India's crude oil needs are met by imports, while over 50% of its natural gas comes from outside the nation. The federal government has been advocating for increasing local output in order to lessen reliance on imports.

Nonetheless, given the patterns in corporate output and growing local demand, the nation seems to be heavily reliant on imports. October saw a sequential rise in India's demand for oil products of 80,000 barrels per day (bpd), according to S&P Global Commodity Insights. Overall demand increased by 197,000 bpd, or 4%, year over year due to the persistence of solid economic fundamentals.

In the quarter that ended on September 30, 2023, ONGC's consolidated net profit increased by 142.4 percent to Rs 16,553 crore from Rs 6,830 crore during the same time the previous year. However, compared to Rs 1.68 lakh crore in Q1 of previous year, revenue from operations decreased by 12.9 percent to Rs 1.46 lakh crore in Q2.

In a report, JM Financial stated that "owing to slightly lower crude sales volume, slightly lower-than-expected oil & gas realization and higher cess (at Rs 3,660 crore versus JMFe of Rs 3,390 crore), ONGC's 2QFY24 isolated EBITDA was 6.7 percent below JMFe at Rs 18,400 crore (though only marginally below acceptance of Rs 18,600 crore)."

India Oil Ltd.

In the meanwhile, the output of crude oil by the state-run Oil India Ltd (OIL) increased by over 6% to 0.835 MMT in the quarter. The business expects output to grow at a CAGR of 4-5 percent over the next two to three years, according to a research by brokerage Emkay Global.

"Gas production was 3% at 0.81bcm (down 2% YoY), while crude was situated line at 0.83mmt (up 6% YoY). With over 100% utilization and basic GRM reaching $16.0/bbl in Q2, NRL's activities restarted after the stoppage, resulting in profits of Rs 740 crore. In the aftermath of Oil India's results, Emkay said, "The management cited a target of 3.5-3.6mmtpa for crude production in FY24, with gas could see a 2-3 percent YoY growth."

Compared to Rs 2,116 crore in the same quarter previous year, Oil India's consolidated net profit in Q2 decreased by 70% year over year to Rs 640 crore. Operational revenue for the reporting quarter was Rs 8,816 crore, down 13% from Rs 10,121 crore in the previous year.