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MarketScreener Homepage  >  Equities  >  NSE India Stock Exchange  >  Oil and Natural Gas Corporation Limited    ONGC   INE213A01029

OIL AND NATURAL GAS CORPORATION LIMITED

(ONGC)
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Delayed Quote. Delayed NSE India Stock Exchange - 10/28 04:27:40 am
66.2 INR   -0.97%
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ONGC sees gas revenue hit by $1 billion due to price cut

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10/09/2020 | 10:37am EDT
A technician opens a pressure gas valve inside ONGC group gathering station on the outskirts of Ahmedabad

NEW DELHI (Reuters) - A recent cut in Indian gas prices will wipe about $1 billion off Oil and Natural Gas Corp.'s (ONGC) revenue from its gas business in the current fiscal year ending in March, the company's finance chief said on Friday.

India has slashed prices of gas produced from old blocks - handed to explorers without bidding - by about a quarter to a multi-year low of $1.79 per million metric British thermal units (mmBtu).

ONGC produces over 95% of its 70 million standard cubic meters per day (mmscmd) of gas output through old blocks.

Finance chief Subhash Kumar said production costs averaged about $3.60-3.70 per mmBtu, which means it is making a loss of $2 per mmBtu since the gas price cut, losing about 100 billion rupees of revenue.

"But since we don't have to pay taxes on this loss, eventually it comes to 60-70 billion rupees ($821 million-$958 million). That is the net loss in the gas business," Kumar told a news conference after a shareholders' meeting.

India needs to make gas prices 'remunerative' for producers to boost local output as the country wants to raise the share of the cleaner fuel in its energy mix to 15% by 2030, from 6.2% currently, ONGC's Chairman Shashi Shankar told the news briefing.

He said the government has set up a panel to look into modifying the current pricing formula, which is based on a weighted average of Henry Hub, Alberta Hub, National Balancing Point and Russian gas.

"Talk is going on of giving some kind of floor price and change in (the) formula as well... The formula could be revised and JKM (Japan Korea Marker) could be one of the markets linked with," he said.

However, he said the recent change in gas marketing and pricing norms will help ONGC get better prices for its new production streams. ONGC aims to produce about 15 mmscmd gas from its east coast block in Krishna Godavari Basin by 2022-23.

India has decided to let companies producing gas from new local fields sell the fuel on e-bidding platforms to help them get better prices.

($1 = 73.0522 rupees)

(Reporting by Nidhi Verma; Editing by Susan Fenton)

By Nidhi Verma and Manoj Kumar


Stocks mentioned in the article
ChangeLast1st jan.
LONDON BRENT OIL -1.38% 39.95 Delayed Quote.-37.71%
OIL AND NATURAL GAS CORPORATION LIMITED -1.05% 66.2 Delayed Quote.-48.10%
WTI -1.75% 38.095 Delayed Quote.-36.11%
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Financials
Sales 2021 3 246 B 43 969 M 43 969 M
Net income 2021 93 087 M 1 261 M 1 261 M
Net Debt 2021 975 B 13 214 M 13 214 M
P/E ratio 2021 9,51x
Yield 2021 4,09%
Capitalization 841 B 11 418 M 11 392 M
EV / Sales 2021 0,56x
EV / Sales 2022 0,48x
Nbr of Employees 32 923
Free-Float 29,3%
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Technical analysis trends OIL AND NATURAL GAS CORPORATION LIMITED
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TrendsBearishBearishBearish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 30
Average target price 95,63 INR
Last Close Price 66,85 INR
Spread / Highest target 139%
Spread / Average Target 43,1%
Spread / Lowest Target -17,7%
EPS Revisions
Managers
NameTitle
Shashi Shanker Chairman & Managing Director
Subhash Kumar CFO, Executive Director & Finance Director
Om Prakash Singh Director, Director-Technical & Field Services
Amar Nath Joint Secretary & Non-Executive Director
Rajesh Shyam Sunder Kakkar Executive Director & Offshore Director
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