Vedanta Oil & Gas Posts ₹746 Cr Q2 Profit As Higher Oil Prices Offset Fall In Output

Vedanta Oil and Gas Ltd on Thursday reported a net profit of Rs 746 crore for the second quarter of FY27 as a spike in oil prices helped offset a fall in production.

The profit compares with a loss of Rs 152 crore in the preceding three months of April-June. Comparable year-on-year numbers were not available as the company came into existence only in May after demerger from Vedanta Ltd.

Oil and gas production dropped 19 per cent year-on-year to 72,200 barrels of oil and oil equivalent gas per day. The firm realised a 40 per cent higher price of USD 97 per barrel in the quarter as compared to USD 69.1 per barrel.

Revenue came at Rs 2,486 crore in the quarter ended September. For the first half of FY27, revenue increased 8 per cent to Rs 4,993 crore and EBITDA rose 14 per cent to Rs 2,625 crore. The company reported profit after tax of Rs 594 crore from continuing operations in H1 FY27, compared with Rs 1,691 crore including discontinued operations.

Vedanta Oil and Gas is focusing on well interventions and artificial lift optimisation to improve recovery from mature assets in Rajasthan and at the Ravva field. The company said these initiatives are helping arrest production declines, with a positive reversal trend emerging at Ravva.

"Our Q2FY27 performance reflects disciplined execution and the strength of our portfolio. Focused production optimisation initiatives are driving decline arrest across our mature assets, while new discoveries reinforce the untapped potential of our acreage. Backed by a robust pipeline of exploration and development projects across Rajasthan, the Northeast and offshore blocks, we are focused on unlocking future growth, enhancing production and delivering sustainable, long-term value," said Jim Johnny Gast, interim chief executive officer and whole-time director.

The company notified three discoveries during the first half of FY27 in Rajasthan, spanning deep-gas and shallow-oil prospects in previously unexplored reservoir intervals across the Kaameshwari, Saraswati and Raageshwari fields. Their hydrocarbon potential and commercial viability remain under evaluation.

Vedanta Oil and Gas is also pursuing deepwater exploration on India's east coast, a full-phase alkaline-surfactant-polymer (ASP) injection programme in northern Rajasthan and further exploration in the Northeast. The initiatives are intended to support recovery from existing assets while developing new sources of production.

The company was recently awarded two offshore blocks in the Krishna-Godavari Basin under the Discovered Small Field (DSF) IV bid round: one in shallow water and another in deepwater. The transfer of participating interests in these blocks to Vedanta Oil and Gas is subject to the requisite applications to the Ministry of Petroleum and Natural Gas and the Directorate General of Hydrocarbons following the demerger of Vedanta Ltd.'s oil and gas business.

"Our profitability in Q2FY27 demonstrates the resilience of our financial foundation and disciplined approach to capital management. Supported by higher price realisation and operational discipline, we delivered healthy cash generation while investing in strategic growth opportunities across our portfolio," said Arpit Mundra, chief financial officer.