State-run Oil and Natural Gas Corporation (ONGC) Ltd has announced a remarkable 112 per cent surge in standalone net profit for the first quarter of fiscal 2026-27, reaching ₹17,034 crore, primarily fuelled by a significant increase in crude oil prices and improved realisations from new well gas.
Key Points
- ONGC's standalone net profit for Q1 FY27 surged by 112% year-on-year to ₹17,034 crore, driven by elevated crude oil prices and enhanced realisations.
- Revenue from operations increased by 45.2% to ₹46,460 crore, with new well gas contributing significantly, delivering an additional ₹1,897 crore compared to APM gas prices.
- Net crude oil realisation improved by 50.4% to $99.45 per barrel, while new well gas realisation jumped 61.5% to $13.31 per mmBtu.
- Despite the strong financial performance, crude oil production fell by 5.5% and natural gas output by 2% due to reservoir complexities and project delays.
- ONGC has initiated strategic projects, including drilling an exploratory well under the Samudra Manthan campaign, to reverse the production decline and enhance India's energy security.
State-run Oil and Natural Gas Corporation (ONGC) Ltd’s standalone net profit for the first quarter of fiscal 2026-27 (FY27) increased 112 per cent year-on-year (Y-o-Y) to Rs 17,034 crore, driven by higher crude oil prices and increased realisations.
The upstream company’s revenue from operations rose 45.2 per cent Y-o-Y to Rs 46,460 crore in Q1.
Strong Performance in New Well Gas
During the quarter, revenue from new well gas stood at Rs 3,998 crore, delivering an additional Rs 1,897 crore in revenue compared with the administered price mechanism (APM) gas price. New well gas now contributes around 38 per cent of total revenue from ONGC’s nomination gas portfolio.
ONGC’s consolidated net profit fell 43.3 per cent in the quarter on account of Hindustan Petroleum Corporation Ltd’s (HPCL’s) consolidated net loss of Rs 12,265 crore due to under-recoveries on petroleum products arising from the sharp increase in crude oil prices following the West Asia crisis.
However, the strong performance of other subsidiaries, including ONGC Videsh and Mangalore Refinery and Petrochemicals Ltd (MRPL), provided a positive contribution to the company’s overall financial performance, the firm said.
Improved Crude Oil Realisation
ONGC’s crude oil price realisation improved sharply during the quarter, aided by higher global crude oil prices.
Net crude oil realisation rose 50.4 per cent Y-o-Y to $99.45 per barrel from $66.13 per barrel a year ago.
Realisation from crude produced through joint ventures also increased 52.3 per cent to $103.34 per barrel, compared with $67.87 per barrel in the corresponding quarter last year.
Meanwhile, ONGC’s APM nomination gas price increased 5.4 per cent to $7 per mmBtu from $6.64 per mmBtu, while realisation from new well gas surged 61.5 per cent to $13.31 per mmBtu from $8.24 per mmBtu.
Production Challenges and Future Outlook
ONGC’s crude oil production fell 5.5 per cent Y-o-Y to 4.95 million tonnes (mt) in Q1, while natural gas output fell 2 per cent to 4.851 billion cubic metres (bcm).
The lower output was on account of complexities in reservoir behaviour in the Krishna-Godavari block (KG-98/2) in the Eastern Offshore, inclement swells in the Western Offshore in April and May before the onset of the monsoon, resulting in delays in the pipeline replacement project, and temporary closure of wells during pre-commissioning activities for some projects, ONGC said.
The production decline trend is expected to be arrested and progressively reversed through the successful execution of strategic projects, it said.
During the quarter, ONGC declared two discoveries (one onshore and one offshore) in its operated acreages.
The firm described the approval of the National Offshore Exploration Scheme, Samudra Manthan, as a transformative step towards unlocking India’s offshore energy potential and strengthening India’s long-term energy security.
ONGC said it has commenced drilling an exploratory well in the Mahanadi deepwater basin under its Samudra Manthan campaign, targeting a shallower Pliocene channel near the Utkal and Konark discoveries.
The well, MNDWO181HDB-1 (MN-DW18-1-H-D), was spudded on July 25 in OALP block MN-DWHP-2018/1, located at a water depth of about 765 metres.
