ONGC net profit up 6% at Rs 5,089 crore in Q2

New Delhi: Lower sales due to decline in production notwithstanding, flagship explorer Oil and Natural Gas Corporation on Thursday posted 6% increase in its second quarter net profit at Rs 5,089 crore on the back of lower subsidy payout and an appreciating rupee.      The rise in net comes for the first time in the last five quarters. Net profit had stood at Rs 4,808 crore in the same period a year ago. "Our net realisation after paying for subsidy was $56.42 per barrel as compared to $46.72 last year,'' chairman R S Sharma said. For the half-year ended September 30, net profit fell to Rs 9,937 crore from Rs 11,444 crore a year ago.      ONGC gave $14 per barrel discount to refiners as subsidy to compensate them for their losses on fuel sales. The subsidy payout at Rs 2,630 crore was 79% lower than Rs 12,663 crore outgo in the previous corresponding period. ONGC reckons its profit would have been higher by Rs 1,491 crore if it did not have to pay the subsidy.      The appreciating rupee helped the company in improving realisation in rupee terms from crude sales, which was Rs 2,731 per barrel in the quarter under review against Rs 2,041 a barrel a year ago. But sales declined to Rs 15,080 crore from Rs 17,407 crore on a dip in production, down 3.4% at 6.63 million tonnes, as natural decline set in at ageing fields. Gas production was almost unchanged at 6.45 billion cubic metres.      Sharma said ONGC was targeting to raise gas production to over 100 million cubic metres per day by 2015-16 from 62 at present. The incremental production would come from new fields, particularly in the KG basin. ONGC reported five oil and gas discoveries during the quarter, including one in the Krishna-Godavari basin. In October, ONGC had discovered four more oil and gas reserves, all of which are in western offshore. He declined to give reserve estimates, saying it was too early.      The ONGC board also approved an investment of over Rs 50,000 crore in exploration and production during the current and the next financial year.      Plan investment during current fiscal has been revised upwards to Rs 24,720 crore from Rs 21,820 crore estimated earlier, while Rs 26,523 crore would be capital expenditure in 2010-11, Sharma said.