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Informist, Wednesday, Apr. 30, 2025

--Vedanta: Natural decline hit production in oil and gas segment

--CONTEXT: Vedanta management comments in post-earnings analyst concall

--Vedanta: Oil and gas segment volume trajectory may go up from Jul-Sep

By Rajesh Gajra

NEW DELHI – The oil production volume trajectory in 2025-26 (Apr-Mar) in the oil and gas segment will start going up from the September quarter onwards and be on track to meet the production guidance for 2025-26 (Apr-Mar), Vedanta Ltd.'s management said in a post-earnings conference call with analysts and investors Wednesday. The company expects oil production volume in the June quarter to be subdued around 98-99 thousand barrels of oil equivalent per day.

According to the management, a natural decline in oil production from Mangala, Bhagyam and Aishwarya fields in Rajasthan and offshore blocks led to a sharp 18% on-year fall in oil production volume to 96.2 thousand barrels of oil equivalent per day in the March quarter. Vedanta Wednesday guided for an average gross oil production volume of 95-100 thousand barrels of oil equivalent per day in FY26 under its oil and gas segment. The guidance number indicates that the average oil production volume in FY26 will be lower than the reported 103.2 thousand barrels of oil equivalent per day in FY25 and 127.5 thousand barrels of oil equivalent per day in FY24.

In the near term, the company's focus is on managing the natural decline in the affected oilfields and growing the volume from them, the management said. The company is also doing other key things to increase oil production volume, it said. This will be largely driven by the "robust portfolio which we now have on the (oil) exploration side."

Vedanta recently said that it was starting the shale drilling campaign in Rajasthan. The management said during the conference call the company will drill three (shale) wells and "we will get to know how it works out for us, and how are we able to make it economical."

The management also pointed to the company's first discovery in its oil block in the north eastern region. "We are doing a couple of appraisal wells starting next month which will then give us volumes later during the year from North East as well," the management said.

In FY25, around 82% of Vedanta's average daily gross oil production volume of 103.2 thousand barrels of oil equivalent per day came from fields in Rajasthan, and the balance were from Ravva, Cambay, and fields under Open Acreage Licensing Policy. The oil and gas segment revenue in FY25 fell by a sharp 38% to INR 110.4 billion, and the average oil price realisation declined 2% to $74.2 per barrel.

On Wednesday, shares of Vedanta ended 0.7% higher at INR 419.20 on the National Stock Exchange of India.  End

US$1 = INR 84.49

Edited by Akul Nishant Akhoury

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