Cairn India on Friday announced a steep 99 per cent drop in its third quarter net profit as it suffered double blow of falling oil prices and high taxes.
Consolidated net profit of Rs8.69 crore, or Rs0.05 per share, in October-December was 99.3 per cent lower than Rs1.349/64 crore, or Rs7.20 per share, in the same period a year ago, the company said in a statement.
Cairn got $34.5 per barrel price for the oil it produced from its flagship Rajasthan fields as compared to about $68 per barrel in the third quarter of previous fiscal.
The rate in October-December was 21 per cent lower than the prevailing Brent price due to the discount to international rate that have been provided in the pricing formula approved by the Government. Of this price, Cairn paid $9.6 per barrel in oil cess alone. Other statutory levies like royalty and profit petroleum were separate.
Companies like Cairn and ONGC have to pay Rs4,500 per ton cess on domestic crude oil produced. They have been demanding that the rate be made ad valorem so that it falls when oil prices dip.
Cairn India said revenue dipped 42 per cent to Rs2,039.49 crore in October-December.
The Mangala enhanced oil recovery (EOR) programme, which aims to boost output by injecting polymers in the field, has yielded 19,000 barrels per day of additional production.
"To ensure timely investment decision in Rajasthan block and realise fair price for our crude, we have approached the High Court to expedite the PSC extension process and allow us to export the crude. The matters are subjudice," the statement said.
The High Court has directed the parties to exchange the requisite information/documents and to communicate, in a time bound manner.
"In an encouraging development, Government has also supported the industry's view on rationalising the Cess charges given prevailing low oil prices," it said.