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Informist, Tuesday, Nov. 11, 2025

By Anand JC and Pallavi Singhal

MUMBAI/NEW DELHI – Oil and Natural Gas Corp. Ltd. Tuesday said it expects to see green shoots at its Mumbai High offshore oil and gas field from January, nearly a year after it signed a technical services agreement with UK-based oil company BP to enhance oil and gas recovery at the mature field. "We are happy to note that yes, we are already seeing a certain uptick happening in our production of oil and gas for the MH field," the company's management told analysts at a post-earnings conference call.

Despite the nascent uptick in output from the mature field, ONGC expects the production to make a difference in its bottom line only after January. "They (BP) are likely to come up with a full-fledged plan on this issue (output fall)," an ONGC official said. "However, what we are expecting is that in such projects, you have peak production coming in after three to four years after the start of that project," the executive said.

ONGC expects its oil and gas production in the current financial year to be lower than previously expected. The company expects to produce around 20 million tonnes of oil in 2025-26 (Apr-Mar), slightly below its guidance of 21 million tonnes. Gas production is expected to be only slightly less than the guidance of 21.5 billion cubic metres. "We expect that in the first quarter of the next year, things will make up for this deferment of production," the company said. Production from the Daman Upside project is expected to flow in from the March quarter. 

Gas drilled from new wells was a key contributor to ONGC's earnings growth in the September quarter. The company earned INR 33.52 billion from new well gas in Apr-Sept. "This delivered an additional Rs 651 crore (INR 6.51 billion) compared to the APM (administered pricing mechanism) gas price as gas from the new wells is eligible for a 20% premium over the domestic APM gas price," the company said. 

Gas from new wells currently accounts for around 13% of the company's overall gas production, and this is expected to increase to 14% going forward. If ONGC maintains its current drilling momentum, it will be able to add another 7.5%. In addition, the Daman Upside project is expected to contribute 5 million standard cubic metres, which will qualify for a 20% premium. At the current run rate, ONGC expects new wells to contribute around 35% to the company's overall gas production within the next 4 years. 

On its Mozambique project, ONGC said it expects a ballot to happen on Tuesday or Wednesday, which would make the lifting of force majeure official. ONGC holds a 16% participating interest through its subsidiaries ONGC Videsh Rovuma Ltd. and Beas Rovuma Energy Mozambique Ltd. in Area-1 of Mozambique. Operators had declared a force majeure there due to a security situation as the government there grappled to quell the insurgency in Cabo Delgado province.

While the Mozambique government has now approved lifting the force majeure, the project's operators are awaiting clarity on security from the authorities. "... all the contracting parties and the government of Mozambique have already more or less arrived at a finalisation of lifting this FM (force majeure), and this is likely to happen in a couple of days," ONGC said.

The company does not expect to incur any additional capital expenditure or infuse any more equity in its subsidiary ONGC Petro additions Ltd. "So whatever we have infused (so far) that should suffice for OPaL," the company said. ONGC Petro additions owns and operates a 1.1 million tonne-per annum greenfield petrochemical complex at Dahej in Gujarat.

ONGC made a sizeable equity infusion into this subsidiary in FY25, including converting compulsorily convertible debentures of INR 77.78 billion issued by the arm, paying the balance call money of INR 862.8 million on warrants issued by the arm, and making a fresh equity infusion of INR 105.01 billion, ICRA had said in October. 

The company announced its September quarter results late Monday. It reported a net profit of INR 98.48 billion on revenue of INR 330.31 billion. Tuesday, its shares closed 0.8% lower at INR 249.45 on the National Stock Exchange.  End

Edited by Saji George Titus

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