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Informist, Tuesday, Aug 6, 2024

 

--ONGC: See FY25 standalone capex at $4 bln, around 320 bln rupees

--CONTEXT: ONGC management comments in post-earnings investor call

--ONGC: FY26 capex likely to be similar to that guided for FY25

 

By Rajesh Gajra

 

MUMBAI – Oil and Natural Gas Corp Ltd expects to incur standalone capital expenditure of around $4 bln, or 320-330 bln rupees, for 2024-25 (Apr-Mar), the company's management said at a post-earnings conference investor call today. The management also told investors and analysts in the case that ONGC's standalone capital expenditure guidance for 2025-26 would be on similar lines.

 

Late Monday evening, ONGC detailed its financial results for the June quarter. The state-owned upstream oil and gas major reported 15.1% on-year fall in standalone net profit to 89.38 bln rupees, and 4.3% increase in standalone revenue from operations to 352.66 bln rupees. The company beat Street estimates on net profit but missed it on revenue.

 

The 2024-25 standalone capital expenditure guidance of 320-330 bln rupees by ONGC's management in today's investor call is lower than what it had guided for in an investor presentation on Jun 28. The company's capital expenditure budget for 2024-25 was set at 358.50 bln rupees in the presentation. As per the data in the presentation, 26% of the capital expenditure planned for 2024-25 was earmarked for development drilling, 25% for capital facilities, 21% for exploratory drilling, 11% for survey, and the remainder for other activities and projects.
 

ONGC spent around 370 bln rupees towards standalone capital expenditure in 2023-24. A good portion of this amount was capital expenditure for the KG 98/2 fields on the east coast. The management said in the May 21 call that the company had some issues with respect to a change in contractors and settlement with them due to which "a large amount was spent there". The company had also incurred capital expenditure on pipeline replacement project PRP-7 in its offshore fields on the western coast.

 

In 2023-24, there were one-off cases by way of capitalisation of 20 bln rupees spent on settling disputes pertaining to projects executed earlier through engineering services in Mumbai, the management said. This had caused its capital expenditure for the full year to be higher at 370 bln rupees.

 

Today, shares of ONGC ended 1.3% lower at 306.10 rupees on the National Stock Exchange.  End

 

US$1 = 83.95 rupees

 

Edited by Rajeev Pai

 

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