Release Date: February 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Crude oil production increased by 6.07% in Q3 FY24 compared to Q3 FY23.
- Natural gas production increased by 1.99% in Q3 FY24 compared to Q3 FY23.
- EBITDA margin improved to 47.28% for the nine months ended December 31, 2023, from 44.96% in the same period last year.
- Numaligarh Refinery Limited (NRL) reported a profit after tax of INR 858.72 crores in Q3 FY24, up from INR 799.14 crores in Q3 FY23.
- The company is targeting a gas production of 5 BCM by the next two years, indicating future growth potential.
Negative Points
- Average crude oil price realization decreased by 4.74% in Q3 FY24 compared to Q3 FY23.
- Turnover for the nine months ended December 31, 2023, decreased by 7.04% compared to the same period last year.
- Profit after tax for the nine months ended December 31, 2023, decreased to INR 3,523 crores from INR 5,022 crores in the corresponding period last year.
- Provision towards disputed service tax and GST on royalty, including interest, amounted to INR 237 crores in Q3 FY24.
- The group PAT for the nine months ended December 31, 2023, was lower at INR 4,647.51 crores compared to INR 7,874.65 crores for the same period last year.
Q & A Highlights
Q: We have been sustaining a 5% to 6% Y-on-Y oil production in the last few quarters. Is it due to increased IR activity or has production commenced from fields like Marjan field?
A: This increase is not due to EOR or IOR activities but from our existing fields, particularly due to new drilling activities and the introduction of new technologies for production. The Marjan field is already online, contributing significantly to gas production.
Q: When do we expect the Northeast gas grid to be commissioned, and how critical is it for ramping up gas production?
A: The Northeast gas grid will be commissioned in three phases. This connectivity is crucial for ramping up gas production as it will provide opportunities to sell gas to mainland India, addressing the current issue of limited off-takers.
Q: Can you provide a timeline for reaching the 4 million tonnes oil production target and the 5 BCM gas production target?
A: We aim to reach 4 million tonnes of oil production by FY26, with a gradual increase each year. For gas, we target 5 BCM by the same timeline, possibly earlier.
Q: What is the expected run rate for other expenses, excluding the service and royalty provision?
A: Other expenses will continue at the current level, with the provision for service tax and GST on royalty remaining similar due to stable crude and gas prices. The exploration write-off for this quarter was INR258 crores.
Q: What is the status of the Numaligarh Refinery Limited (NRL) upgrade and the associated CapEx?
A: The NRL upgrade is about 55-60% complete, with a total CapEx plan of INR28,000 crores. We have spent close to INR6,000 crores so far, including equity investments and rights issues.
Q: How are you planning to market the additional gas production once the Northeast gas grid is operational?
A: Initially, we will target the Northeast region, covering areas not currently served by our existing infrastructure. We are in discussions with potential customers and expect to have sufficient demand to match our increased production.
Q: What is the impact of the GST provision on your financials, and how is it calculated?
A: The GST provision includes interest on outstanding balances, which is why the amount appears larger. The interest rate is as per the GST Act, and the total provision includes amounts not yet deposited with the government.
Q: Can you provide details on the seismic costs and exploration write-offs for the quarter?
A: The seismic cost for the quarter was INR130 crores, up from INR75 crores in the previous quarter. The exploration write-off for this quarter was INR258 crores.
Q: What are the plans for the Mozambique debt on your standalone books?
A: The Mozambique debt will remain on Oil India's books, but future CapEx and funding will be managed by an asset management company (AMC) at the project level.
Q: What is the dividend policy, and why was there no interim dividend this quarter?
A: We follow government guidelines for dividend distribution. One interim dividend has already been declared, and any further decisions will be made before the end of the financial year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
