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ONGC boosted by higher oil prices, forex gains
MUMBAI (Reuters) - State-run producer Oil & Natural Gas Corp(ONGC.NS) reported a higher-than-expected 48 percent jump in quarterly profit, as the company benefited from higher crude oil prices and foreign exchange fluctuations.
India's third-biggest company by market value reported net profit of 60.8 billion rupees for its fiscal first quarter ended June, up from 41.0 billion rupees a year earlier.
Analysts, on average, had expected a net profit of 49.6 billion rupees, according to a Reuters poll of brokerages. Net sales rose 24 percent to 200.8 billion rupees, as the company benefited from the year-on-year rise in its average sale price for crude oil.
The company, which prices its locally produced gas in dollar terms, has benefited from the sharp depreciation in the rupee. The rupee weakened by 8.5 percent during the April-to-June period and has lost a fifth of its value over the past year.
ONGC does not fully benefit from rising crude prices because India caps prices of petroleum products such as diesel, cooking gas and kerosene and producers such as ONGC share the cost of subsidising refineries by selling crude to them at a discount.
Net realisations from oil sales, after giving discounts to state-run refiners, were slightly lower at $46.62 per barrel from $48.74 a barrel a year earlier.
ONGC said its net profit was reduced by 71.5 billion rupees for the quarter by gross discounts of 123.5 billion rupees to state-run refiners. It had given discounts of 120.5 billion a year earlier.
Shares in ONGC have risen nearly 9 percent so far in 2012, underperforming a 13.6 percent rise in the Sensex. The stock closed 0.3 percent lower on Friday, valuing the firm at $43.3 billion, ahead of the results.
ONGC has made a fresh discovery at the D1 offshore field off India's western coast, Chairman Sudhir Vasudeva said. The discovery would boost in-place reserves at the field to an estimated 140 million tonnes of oil-equivalent, from 82 million tonnes now, he said. The company has also made three other smaller discoveries in the past month.
ONGC, which has been investing heavily to maintain output from its old fields, has outlined capital expenditure of 331 billion rupees in the current financial year. The company has said it aims to raise crude oil production by 15 percent to 28 million tonnes, or 560,000 barrels per day (bpd), by March 2014.
State oil marketing companies this week racked up record losses of $7.3 billion on the back of a sharp depreciation in the rupee and delays in reimbursement of the government's share of the fuel subsidy.
(Reporting by Prashant Mehra; Editing by Jon Loades-Carter)
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