India's ONGC Posts Profit Drop, To Invest $1.7B In Domestic Offshore
MUMBAI, Nov 14 (Reuters) - India's Oil and Natural Gas Corp (ONGC) on Friday posted a 10 percent fall in quarterly profit, its first drop after four quarters of growth, as lower crude prices hurt profitability from both onshore and offshore blocks.
Separately, the company said its board had approved investments of over 106 billion rupees ($1.71 billion) to boost production from two western offshore formations.
The country's biggest oil and gas explorer has struggled to lift production from its ageing domestic fields and is aggressively investing overseas to secure energy assets for Asia's third-largest economy.
The state-owned company posted a profit of 54.45 billion rupees in the three months ended Sept. 30, its fiscal second quarter, down from 60.64 billion rupees a year earlier.
Net sales fell 8.7 percent to 203.61 billion rupees.
Analysts on average expected ONGC to post net profit of 54.32 billion rupees, according to Thomson Reuters data.
A higher burden from subsidised sales of products to state refiners to keep retail prices in check has squeezed ONGC's margins even as it spends heavily to boost overseas assets and maintain output at its domestic fields.
The company's cost of helping subsidise fuel fell slightly to 136.41 billion rupees from 137.96 billion in the same quarter last year.
The company, in which the Indian government plans to sell a 5 percent stake worth close to $3 billion, is expected to benefit from government reforms to free diesel prices and raise natural gas prices.
Shares of the company, which has a market value of almost $54 billion, closed 2 percent higher ahead of the results on Friday in a broader Mumbai market that was up 0.38 percent.
($1 = 61.8250 Indian rupee)
(Reporting by Aman Shah in Mumbai, editing by David Evans)
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