State-owned Oil and Natural Gas Corp (ONGC) on Thursday reported its lowest quarterly profit in more than 15 years as it took one-time impairment charge on reserves due to slump in oil prices. Net profit of Rs1,286 crore in October-December was 64 per cent lower than Rs3,571 crore in the same period a year ago, ONGC Chairman and Managing Director Dinesh K Sarraf told reporters.
With oil prices slumping to 12-year low, it wrote down the value of reserves it holds by Rs3,994 crore. The write- down is called impairment. “It wasn't a bad quarter but for the impairment, we consciously took, to keep our balance sheet clean,” he said adding but for the write-off the net profit would have been Rs3,898 crore.
Revenue was down 2.3 per cent to Rs18,547 crore on falling oil prices, he said. ONGC realised $44.34 per barrel in the third quarter, down from $50.56 a barrel net realisation in the same period a year ago. Unlike last fiscal, the company did not have to pay any fuel subsidy in October-December as the government decided to make good all of the losses that state-owned fuel retailers incurred on selling kerosene and lPG at sub-market rates. Previously, ONGC as well as Oil India ltd had to make good a certain part of the losses. Sarraf said crude oil production in the third quarter was marginally down at 6.52 million tons from 6.61 million tons a year ago while gas output fell 4 per cent to 5.77 billion cubic meters.
“The company has assessed the indications of significant impairment as at December 31, 2015 due to fall in crude oil prices in the international market, and accordingly the company has tested its Cash Generating Units for the impairment.”