Date:26/06/2007 URL: http://www.thehindu.com/2007/06/26/stories/2007062651651700.htm

Business

New high in ONGC annual profit

Special Correspondent

NEW DELHI: The Oil and Natural Gas Corporation (ONGC) on Monday announced a 13 per cent decline in its net profit for the January-March quarter. However, its 2006-07 net profit rose to a new high of Rs. 15,643 crore.

The corporation attributed the fall in the fourth quarter net to Rs. 2682 crore from Rs. 3,086 crore in the year-ago period to one time payment of Rs. 1,100 crore on retirement, medical and wage benefits to employees.

The corporation also announced an investment Rs. 1, 21,318 for discovery of new oil and gas reserves in the country and acquiring assets abroad by 2012. The impact of the 442.44 per cent rise in subsidy payout (Rs 11,957 crore during 2005-06) was that it pared the net profit by Rs. 10,333 crore, ONGC Chairman and Managing Director R. S. Sharma told a news conference convened here to announce the annual results. The company saw an 18 per cent rise in turnover to Rs. 56,904 crore in 2006-07. The January-March revenue rose to Rs. 14,576 crore from Rs. 12,528 crore.

Shelves refinery plan

ONGC on Monday announced that it had shelved plans to set up a refinery in Rajasthan to process crude oil found in the State by Cairn India Limited in view of the poor economic viability of the project.

Mr. Sharma said the proposal for a 3 to 4 million tonnes refinery was found to be worse in economic viability than the previous 7.5 million tonnes refinery.

The Petroleum Ministry is now in agreement that a pipeline need to be built to evacuate the crude to refineries in Gujarat and that is what ONGC was working on right now.

He said the Ministry was also in agreement on including the cost of the 580-km pipeline from Barmer district to a port in Gujarat in the field’s development plan meaning the operator can recover the cost from sale of crude oil. Mr. Sharma said a decision on who would build the pipeline — ONGC-Cairn combine, a special purpose vehicle or a third party — would be taken during the next few days.

The Oil and Natural Gas Corporation Ltd. and Cairns Energy will jointly set up a 7.5 million tones capacity per annum well head oil refinery in Barmer district of Rajasthan to make use of the new found oil in the area. A new company, Rajasthan Refineries Limited, with equal participation from ONGC and Cairns Energy, will be set up for the venture.