NEW DELHI (Reuters) - State-run Oil & Natural Gas Corp(ONGC.NS) beat quarterly profit expectations, helped by higher selling prices for oil and gas and slightly lower subsidy payouts to refineries.
ONGC, India’s third-biggest company by market value, subsidises state refineries by selling them crude oil at cheaper rates so they can supply retail markets at capped prices.
ONGC posted net profit of 55.63 billion rupees for its fiscal third quarter ended December. Net sales rose 16 percent to 209.87 billion rupees. Analysts had on average expected a net profit of 53.7 billion rupees, according to Thomson Reuters Starmine data.
The net profit was down 17 percent on the same quarter last year, when earnings were boosted by a one-time gain of 31.4 billion rupees from past royalty dues from joint venture partner Cairn India(CAIL.NS).
ONGC said on Monday gross discounts to state-run refiners marginally fell to 124.33 billion rupees while the net amount it received per barrel of crude rose to $47.97 from $44.71 a year ago.
Last month, the prices of subsidised diesel were partially raised to cut the government’s fiscal deficit and the oil ministry has also recommended raising gas prices, but gains have been limited so far as crude prices have also continued to rise.
ONGC has been on a buying spree in recent months to secure interests in overseas oil and gas assets.
It agreed to pay $5 billion for ConocoPhillips’ 8.4 percent share of the Kashagan field in Kazakhstan in November, and months earlier signed a $1 billion deal for a small stake in oil fields in Azerbaijan.
The state explorer has also been investing to maintain output from its old fields in India and has lined up capital spending plans of around 340 billion rupees for the next fiscal year starting April.
Shares in ONGC, valued at nearly $50.4 billion, closed 1.7 percent lower ahead of the results. The stock has jumped 15 percent so far in 2013, outperforming a 6 percent rise in the sector index.
Reporting by Devidutta Tripathy and Prashant Mehra; Editing by Mark Potter