ONGC Q3 Net Profit Rises 1.6% on Higher New Well Gas Realisation, Lower Levies

State-owned Oil and Natural Gas Corporation (ONGC) reported a 1.6 per cent increase in net profit for the December quarter, aided by higher realisations from new wells and reduced statutory levies, which offset the impact of lower crude oil prices.

The company reported a standalone net profit of Rs 8,372 crore for October-December quarter of 2025-26 financial year, compared with Rs 8,240 crore earning in the same period a year back, according to a company statement.

India's top producer of crude oil - the key feedstock for fuels such as petrol and diesel - and natural gas, used for power generation, fertiliser production, and conversion into CNG and cooking gas, realised over 10 per cent lower earnings on every barrel of crude produced. Natural gas revenues, however, rose.

The company earned USD 61.63 per barrel in Q3, down from USD 72.57 a barrel in October-December 2024.

Gas sales price, however, improved to USD 6.59 per million British thermal units from USD 6.50.

ONGC Director (Finance) Vivek Chandrakant Tongaonkar said during an investor call that the earnings rose on the back of higher revenues from new well gas, higher other income and lower statutory levies.

Under the government's new well gas pricing formula, output from newly drilled fields is priced at a premium to the administered price mechanism (APM) rate, allowing producers to realise higher revenues from incremental production.

Tongaonkar said incremental revenue from new well gas in Q3 was Rs 294 crore and Rs 944 crore in April-December (first nine months of current fiscal).

Following a decline in global crude prices - to which ONGC's crude realisations are benchmarked - the company paid lower royalty and cess, which are levied on an ad valorem basis. Statutory levies fell to Rs 5,975 crore in the third quarter from Rs 6,630 crore a year earlier, he said.

The same was the reason for a 6.4 per cent fall in gross revenues to Rs 31,546 crore in Q3.

Tongaonkar said new well gas made up for 18 per cent of the total revenues of the company in the first nine months of the current fiscal.

"During 9M FY26, revenue from new well gas stood at Rs 5,028 crore, delivering an additional Rs 944 crore revenue compared to the APM gas price. New well gas now contributes more than 18 per cent of total gas sales revenue from ONGC portfolio," he said.

Crude oil production was almost flat at 4.592 million tonnes in Q3 as compared to 4.653 million tonnes a year back. For the 9-months, the output was marginally higher at 13.9 million tonnes.

Natural gas production too inched up marginally to about 5 billion cubic meters in Q3 and 14.75 bcm in 9M.

He said the board has approved a second interim dividend of 125 per cent (Rs 6.25 on each equity share of Rs 5). The total payout on this account will be Rs 7,863 crore.

This is in addition to the 1st interim dividend of Rs 6 per share declared earlier in November 2025.