ONGC Net Drops 6.4% Due to 'Unprecedented High Subsidy Burden'

Oil and Natural Gas Corporation (ONGC), India's state-owned petroleum company, reported that net revenues are down for Q3 due to an "unprecedented high subsidy burden."

After Q3, ONGC claimed a 6.4% drop in net profit and a 2.6% drop in sales revenue.

While crude oil production held at 6.62 million metric tones, natural gas production weighed in at 5.78 billion cubic meters, up from 5.73 billion cubic meters, according to a report released Jan. 21 by ONGC.

The report indicates that the turnover of the company is down 2.6% to Rs. 15,218 Crore, due to a subsidy pay-out of Rs. 6,080 Crore to the Oil Marketing Companies IOC, BPCL and HPCL. The prediscount realization for Q3 is U.S.$91.19 per barrel and postdiscount realization is $54.52 per barrel.

The subsidy burden amounts to Rs. 13,528 Crore during the current 9 months as compared to Rs. 12,356 Crore in the corresponding period, last year.

On the up side, ONGC reports that Earnings-Per-Share (EPS) of ONGC for the 9-months of FY-08 has increased to Rs. 65.80 per share as compared to Rs. 60.60 per share for the corresponding period the year before.

In other news, ONGC has been honored as the first-ever Indian company in Fortune's list of 'World's Most-Admired Companies', 2007. The distinction is based on a survey of Fortune companies from around the world conducted by the Fortune magazine.

The honor comes on the heels of nine new discoveries made by the company between October and December. Four of the new discoveries are from new prospects and five are new pool discoveries made in earlier-established fields.

ONGC reported that in the cumulative nine-month period FY08, the company has recorded 19 discoveries.

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