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Informist, Saturday, Feb. 8, 2025

By Akshay V. Johnson and Anshul Choudhary

MUMBAI – Oil India Ltd. expects its crude oil production to reach 3.5 million tonnes in 2024-25 (Apr-Mar) and 4 million tonnes by FY27 as it begins production from new wells, the management said in a post-earnings analyst conference call Saturday. In the first nine months of this financial year, the company has produced 2.61 million tonne crude oil. 

The company expects its natural gas output to reach 3.8-4 billion cubic meters by FY26 compared with 3.18 billion cubic meters in FY24.

Oil India has completed 70% of the physical work for Numaligarh Refinery expansion project and expects it to be commissioned by the end of 2025. The company has already made a capital expenditure of around INR 230 billion for this expansion project so far, out of which INR 120 billion is funded through debt, the management said.

Through this project, the company is expanding the capacity of Numaligarh Refinery to 9 million tonnes per annum from 3 million tonnes per annum. This will be achieved by installing a 6 million tonnes per annum capacity refinery which will process Arab Light and Arab Heavy crude oil at a ratio of 3:7, according to a presentation about the project on the company's website.

For the Numaligarh Refinery petrochemical project, the company projects a capital expenditure of around INR 72 billion. As of now, the company has spent around INR 9.6 billion-INR 9.9 billion on this project, the management said.

The company has built up sufficient production from the new wells, which are likely to see higher realisations. It expects the new gas wells to multiply even further and become a large portfolio of the company's local gas production in the coming two years, the management said. The company is waiting for those production volume numbers to be vetted by the government, which is expected to come about by the end of 2025.

The Duliajan-Numaligarh Gas Pipeline de-bottlenecking project is under augmentation, the management said. The project is being undertaken in two phases, with the first phase being expected to be completed by Mar. 31 and the second phase to be completed by the end of FY26. The pipeline is a joint venture between Assam Gas Co. Ltd., Numaligarh Refinery, and Oil India, according to the company's website.

The company expects to scale up its gas production after the completion of the Indradhanush Gas Grid. Oil India has plenty of gas reserves in North East India, which it aims to utilise once all the networks are integrated and the company is able to lend gas to all the major parts of the country, the management said. Indradhanush Gas Grid is a joint venture between Indian oil, Oil and Natural Gas Corp., Gas Authority of India, Numaligarh Refinery, and the company. The pipeline will connect Guwahati to the major cities of North East India and has been designed with flexibility of gas injection on either side.

Oil India's net profit for the December quarter fell 23% on year to INR 12.22 billion and revenue fell 10% on year to INR 52.40 billion. This was largely on account of a fall in crude oil realisations and gross refining margins, the management said. For the nine months ended December, the company's gross refining margins were $3.61 per barrel, down from $13.12 per barrel in the year-ago period. The company's crude realisations during the December quarter were $73.82 per barrel, down from $84.14 per barrel in the year-ago quarter. The company highlighted it was able to increase its production of crude oil and natural gas, despite the fact that all its fields are depleting.

The company announced its December quarter results on Friday post market hours. Friday, shares of the company closed marginally lower at INR 424.80 on the National Stock Exchange.  End

US$1 = INR 87.43

Edited by Deepshikha Bhardwaj

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