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ONGC Reports Lower Fiscal Q1 Production, Expects Recovery From Strategic Projects

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India's state-owned Oil and Natural Gas Corporation reported Tuesday fiscal Q1 standalone crude oil production of 4.452 million metric tons, compared with 4.683 mmt a year earlier.

For the quarter ended June 30, crude oil production from joint venture operations was down to 262,000 mt, compared with 306,000 mt in the same period last year.

Condensate production decreased to 236,000 mt from 250,000 mt a year earlier, while crude oil production from joint ventures fell to 262,000 mt from 306,000 mt.

Natural gas production from ONGC's standalone operations totaled 4.756 billion cubic meters for the quarter ended June 30, compared with 4.846 Bcm a year earlier.

JV gas production declined to 95 million cubic meters for the quarter, down from 117 million cubic meters a year earlier.

Standalone oil and oil-equivalent gas production slipped to 9.444 mmt for the quarter, down from 9.779 mmt in the year-ago quarter.

ONGC attributed the production decline over the year to reservoir complexities in the KG-98/2 field, rough sea conditions in the Western Offshore, and delays to the PRP-8 and PRP-9 Pipeline Replacement Projects.

The company also shut wells during commissioning of the MHN-TCPP-PGC-BGC Project, off India's West Coast, and the Daman Upside Development Project. Operational disruptions at customer facilities also reduced gas offtake from isolated fields, ONGC said.

The company expects strategic projects, including Technical Service Provider programs and Discovered Small Field initiatives, to halt the production decline and gradually restore growth. ONGC has engaged BP (BP) for the entire Western Offshore under the TSP program after positive early results from TSP-1.

ONGC is investing over 40,000 crore Indian rupees ($4.21 billion) in Western Offshore projects covering reservoir management, enhanced water injection, pipeline replacement and other capital projects. The company expects those investments to begin lifting production and recovery from fiscal 2027 onward.

The company also reported two discoveries during the quarter, including one onshore and one offshore.

ONGC additionally spudded its first deepwater well under the Samudra Manthan program in the Mahanadi Basin at a water depth of about 765 meters.

Price: $42.60, Change: $-1.66, Percent Change: -3.76%

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