I'll hand the conference over to Mr. Sabri Hazarika from Emkay Global Financial Services Limited. Thank you, and over to you, sir.
Yes, thanks. Good morning, everyone. On behalf of Emkay Global Financial Services Limited, I welcome you all to the Q3 FY25 earnings conference call of Oil India Limited. We have with us the senior management of the company, led by Mr.Abhijit Majumder , who has recently taken over as Director of Finance. We also have Pankaj Kumar Goswami , who's Director of Operations. And we have Mr. Rupam Barua, Executive Director of Finance and Accounts, Mr. Ranjan Goswami, Executive Director of Business Development, and Mr. Dharam Singh Munjal, Chief General Manager, Exploration and Development. So today's session would be a brief on the results by the management, and that would be followed by the question and answer round. So without any further delay, now I would request Oil India Management for the opening remarks. Over to you, sir.
So good morning, all the participants who have joined us for this investor and analysts' phone call. So I am Abhijit Majumder , Director of Finance, Oil India Limited. With me, I have my team, represented by the senior executives from the operations department, from the business development, from finance. So may I now request ED Finance to make the opening remarks?
Good morning, dear friends. At the outset, I would like to thank Mr. Sabri Hazarika , Emkay Global Financial Services Limited, for organizing today's analysis call. I am Rupam Barua, Executive Director Finance and Accounts of Oil India Limited. The company's financial results of Q3 Financial Year 25 were published on 7th February 2025. I'll briefly give some highlights about the performance of the company in both physical and financial terms. Now, coming to the standalone results and beginning with the production front, the company has continued to improve its crude oil production, which is higher by 1.4% in quarter-ended 31st December 2024 at 0.868 MMT, vis-à-vis 0.856 MMT in quarter-ended 31st December 2023. Crude oil production has increased by 4.1% in nine months ended 31st December 2024 at 2.614 MMT, vis-à-vis 2.511 MMT in the nine months ended 31st December 2023.
Natural gas production during nine months ended 31st December 2024 is at 2.446 BCM, increased by 2.90% over production during nine months ended 31st December 2023, which was 2.377 BCM. Natural gas production for quarter-ended 31st December 2024 is marginally higher by 0.85% at 0.829 BCM, vis-à-vis 0.822 BCM for quarter-ended 31st December 2023. On the financial side, average crude oil price realization for Q3 Financial Year 2025 is $73.82 per barrel, vis-à-vis $84.14 per barrel for Q3 Financial Year 2024, which decreased by 12.27% for nine months ended 31st December 2024. Average crude oil realization is $79.35 per barrel, vis-à-vis $82.89 per barrel for nine months ended 31st December 2023, which decreased by 4.27%. Average natural gas price for Q3 Financial Year 2025 has remained unchanged at 6.5 per MMT.
The turnover for nine months ended 31st December 2024 has increased by 1.38% to Rs 16,598.28 crore compared to Rs 16,673.06 crore for nine months ended 31st December 2023, which is mainly due to higher crude oil and natural gas sale in nine months of Financial Year 2025 compared to nine months of Financial Year 2024. EBITDA margin for Q3 Financial Year 2025 has increased to 42.76%, vis-à-vis 41.34% for Q3 of Financial Year 2024. Profit before tax for Q3 Financial Year 2025 is Rs 1,221.80 crore, vis-à-vis Rs 1,584.28 crore for Q3 of Financial Year 2024. The profit after tax for nine months ended 31st December 2024 has increased by 28.38% to Rs 4,522.71 crore, vis-à-vis Rs 3,523.02 crore for nine months ended 31st December 2023.
The earnings per share for nine months ended 31st December 2024 is INR 27.80 per share, vis-à-vis 21.66 per share for nine months ended 31st December 2023. I'm just giving you the financial performance of Numaligarh Refinery also. Profit after tax of NRL during quarter three of Financial Year 2025 is INR 385.36 crore, vis-à-vis INR 858.72 crore during Q3 of Financial Year 2024. Profit after tax for nine months ended 31st December 2024 is INR 990.94 crore compared to INR 1,516.66 crore for the corresponding period of last year. NRL gross refining margin during quarter three of Financial Year 25 is $2.10 per barrel, vis-à-vis $12.72 per barrel during quarter three Financial Year 24. Gross refining margin for the nine months ended 31st December 2024 is $3.61 per barrel, vis-à-vis $13.12 per barrel for the corresponding period last year.
Annual EBITDA for the quarter three Financial Year 2025 is Rs 656.70 crore, vis-à-vis Rs 1,218.19 crore for the Q3 Financial Year 2024. While EBITDA for the nine months ended 31st December 2024 is Rs 1,789.21 crore, vis-à-vis Rs 2,297.57 crore for the nine months ended 31st December 2023. Our consolidated results, the standalone gross turnover for the nine months ended 31st December 2024 is Rs 26,575.93 crore, vis-à-vis Rs 26,137.84 crore for nine months ended 31st December 2023. Consolidated profit after tax for the nine months ended 31st December 2024 is Rs 5,542.66 crore, vis-à-vis Rs 4,647.51 crore for the nine months ended 31st December 2023. The board of directors of the company has recommended an interim dividend of Rs 7 per fully paid equity share. With this total interim dividend declared by the company, till third quarter is Rs 10 per equity share.
With this, my opening remarks on the performance is over, and we are now open to question and answer session.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Thank you for the opportunity. Very good morning, sir. The first question was actually on NRL. We have seen NRL's performance over the last couple of quarters actually being a little bit more subdued than what we're used to. How much of this can be attributed to the ongoing expansion of capacity, activities of stabilization related to that? Or would you say that it's pure operational issues or the fact that Singapore margins have fallen in Asia that is to account for this sharp fall in GRMs? How should we look at it, and how should we look at it going forward, sir? That was my first question.
Yes, sir. Regarding the physical progress on the expansion plan, it has already progressed up to about 70% , 73% till 31st December 2024. And.
How much %, sir? Sorry.
73%.
73. Okay. That's physical completion, right?
Yeah. Physical completion I am talking about.
Okay.
And as regards the CapEx spend, it is already at about INR 23,000 crore till December, out of which about INR 12,000 crore is incurred by way of the financing.
Okay. So is this something that we should look at as a reason for the drop in operating performance in the last couple of quarters, these expansion activities going on and so on?
No.
Because the GRMs have all fallen very, very sharply.
Yeah. GRM has fallen compared to last nine months. Last nine months, GRM was about 13.12, whereas this time the GRM is 3.61.
Okay.
So there are several reasons actually. If you look at the Pan India GRM, the GRMs are not as impressive as corresponding period last year for other impediment also. That is the first thing. Second thing is there are some inventory adjustments which take place while calculating the GRM. Now, if you knock out those inventory adjustments, then the ideal GRM would have been about $5.74 without extra equity benefit. And whereas the extra equity benefit is roughly about $18 per barrel. Okay. So if you take into account this $18 per barrel plus another $6 per GRM without taking into account this inventory adjustment, then the GRM is roughly about $24.
Okay. Just to check, if I can just for my clarity, so the inventory adjustment for nine months was about $2 a barrel, and about $18 a barrel is the additional excise benefit that we are getting for the nine-month period, right, sir?
Right. Right.
Okay. Got it. So that's one. The second part was just the other income seems to have fallen quite sharply in this quarter. Is it that some of the dividend payout we received was front-ended for the second quarter?
No. Absolutely. Actually, this year, till 31st of December, we could receive dividend of about INR 390 crore only. Out of which INR 180 crore is from NRL. Another INR 310 crore is from IOCL. But previously, what happened last year, we had some impressive dividend receipts, of which about 209 to about 200 we had received from our Singapore subsidiary. So that was a major dividend receipt last year, which is not present this time. That is one thing. Another thing is that the dividend which we had received from NRL last year was around INR 160 crore apart from the dividends we also received, although not very significant from BCPL and DNPL also, which are not present this year's corresponding period. Then NRL dividend last year was around INR 160 crore.
So that is why roughly about INR 1,200, INR 1,100-INR 1,200 crore was the total dividend receipt that we had last year, which this year is about only INR 700 crore. So there is a fall in the dividend receipt, which has reduced our income this time compared to last year.
Very clear, sir. Last question, if I may squeeze in. Sorry.
Addressing your query on the drop in GRM, if I can just step in, what has happened is across the board, you would see that GRMs have fallen. According to my understanding, except for MRPL, none of the other companies are ahead of NRL so far as GRM is concerned. So that also has to be taken into account while you look at the bigger picture.
Got it, sir.
That much I just wanted to underline.
Sure. So one last question, if I may squeeze in, can we get an updated number, if at all, of the production guidance for both oil and gas for FY26? If you have any updates. The production?
Production.
Production.
Production.
Okay. The production actually is expected to be finally around 3.49, 3.48, which is up to this thing for 2025. Although we targeted 3.6 around, but because of a number of reasons, we had some of the areas where these are the operations by the way, I told you about going. So we are expecting around 3.5, plus we will be trying very hard to reach 3.5. This is for oil, sir?
That's the outlook for oil.
For gas, sir?
3,300 for gas. That's our target now.
That is for this financial year, right? FY25?
Yes. Yes.
So I was actually asking for FY26, sir, if there is a target as of now.
Our target is to become a 4 billion ton crude oil and a 5 BCM company.
Okay. 26.
So that's our target. So we are inching towards that. This year, possibly, even though the target is 3.5, we may still reach that target. I'm not writing off that possibility. However, as you have seen, there are huge challenges. Our fields are all depleting fields. Still, I mean, most of the peer companies, they are suffering a decline while we are still maintaining. And this year also, our production has gone up by 4.1%. So we are quite hopeful that possibly in the days ahead, we'll again be achieving a bigger target. Finally, we reach that 4 million ton target by the year.
27.
27.
So, 26, you can expect that we'll maintain it. And most probably, we are going to drill in some of the high potential areas this year, like Barekuri. So we are targeting those areas.
One more point.
Once we enter there, I think our production will pick up. Maybe we'll be reaching around 7 at least, 3.6, 3.65.
Just for your information, we have already crossed the Brahmaputra and gone to the northern bank of the river, where also we have identified traces of hydrocarbon there.
Right.
Exploration and development from Exploration and Development Directorate. When we talk about the production and the production profile and what is going to happen till the end of this fiscal year and what is going to happen onwards, I would just like to tell you that Oil India Limited has been aggressively acquiring exploration acreages under the Open Acreage Licensing Policy bid round, and so was the case that you know that we are producing primarily from our main producing area in the South Bank of the Brahmaputra River. When I say South Bank of the Brahmaputra River, I essentially mean that the Brahmaputra River which flows from the mountains down to the alluvial plains, it divides our operational area into North Bank and South Bank, so this is the context we need to understand first.
So our primary production from the Assam and Arunachal Pradesh or Assam and Assam Shelf Basin is coming from the main producing areas. So post-acquisition of these acreages, we have aggressively carried out exploration activity. And I would like to tell you that after three decades of perseverance in the north bank of river Brahmaputra, it is for the first time that we have tasted crude oil in the sense that we have established a working petroleum system over there. There have been several companies who have worked over there in the past, including us, but our perseverance has led us to establish a hydrocarbon system over there in place. So what we are doing now, in order to further monetize this discovery, we are planning extensive supplementary seismic and geophysical investigations so that these can be brought onto production.
Because this has opened a plethora of area for us and new frontiers in the north bank of river Brahmaputra. This is one. Another thing that we are doing in order to increase and enhance our production from our main producing area or from our rice bowl in the west is that we are carrying out extensive G&G studies and petroleum system modeling studies, both in-house and through the hiring of international consultants. Why so? Because the oil and gas, it lies in the minds of the geologists, geophysicists, and the reservoir engineers who think about it. So perceptions, opinions can bring about new insights. And let me tell you that even in south bank of river Brahmaputra, what we have been able to do is we have drilled the deepest onshore oil well in India, which is to the depth of 5,779 meters, which is not a rare feat.
And the most important, I think, on the cake is that in one of the wells, from these deeper horizons, we are producing crude oil at the rate of around 40 kiloliters per day. So with the appraisal and the development of these discoveries, it is going to certainly aid in development of hydrocarbon resources. Thank you.
Thank you, sir. Thank you so much for the deal.
Thank you.
Thank you. The next question is from the line of Vivekanand from Ambit Capital. Please go ahead.
Yeah. Thank you for the opportunity. So my first question is on NRL. You had spoken about getting additional approval for petrochemical as well. What is the status of the total CAPEX that is envisaged for NRL? And if you could give us an update on the timelines for that to come on stream and simultaneously, how is the progress of the DNPL debottlenecking that you are doing? That's question one. I have one more on Oil India. Maybe we will talk about that after NRL's answer.
Yeah. As far as petrochemical project is concerned, that is a project of about INR 7,200 crore capacity. Okay. And still now, the company, NRL has already spent about almost INR 950-990 crore on this project. And the expected completion is maybe after three years, by December 2028.
Okay. Could you also give us an update on the 3-9 MMTPA capacity expansion and the DNPL debottlenecking that you were planning simultaneously?
3 to 9 MMTPA capacity expansion of the NRL is concerned. That has already achieved about more than 70% complete, and physical progress has been made. Already about INR 23,000 crore of CAPEX has already been spent on this project till now. Out of which around INR 12,000 crore is debt funding. That's the status. It is likely to be commissioned by the end of this year. As far as GNPL upgrade is going on, actually, this is an older line. Now a new capacity expansion is going on. It will expand to 2.5.
2.5.
Actually, sir, DNPL line, this was an exclusive line used by Oil India Limited and NRL for evacuating the crude oil and natural gas specifically to Numaligarh Refinery Limited. So this was a dedicated pipeline which was constructed with 1 MMTPA capacity. But as on that.
1 MMTPA?
But as on that, as Numaligarh Refinery is under expansion, so they will require more appetite for natural gas. So as on that, although they are taking 0.9-1 BCM of gas from us through this pipeline, but they will be requiring additional gas up to around 2.5-2.75 BCM after completion of their expansion in December, which is targeted in December 2025. This DNPL line is under augmentation and expansion for that reason. The project is progressing. It is being undertaken under two phases. First phase is of about 53-58 kilometers. The next phase is 53 to under 190 kilometers. That particular project is undergoing under DNPL own window. It is having a CAPEX of about INR 433 crore.
The first phase is expected.
First phase is expected.
In March?
Yeah. First phase is expected to be completed by 31st of March 2025. And second phase is expected to be completed by March 2026. So that gets matched with the completion of our refinery expansion.
Okay. Understood. As far as your current consumers are concerned for gas, how much could you give us a broad split of the key consumers for your natural gas output, the current 3.3 BCM that you are generating? Where is it being sold to? Could you give us a rough sense of that?
It is up to 3.3.
Annual.
Annual.
Annual. I meant annual, sir.
Per day, it will be around 7. Sir, actually, our major customers are basically some fertilizer companies, some petro companies. We have NEEPCO, power company.
We have BVFCL.
Teagardens.
Teagardens.
So out of that, the major customers, to name a few, one is the Assam Power Generation Company Limited, which is called APGCL. Then there is NEEPCO. APGCL is taking our gas for two of their plants. One is Namrup Thermal Power Plant and Lakwa Thermal Power Plant. Then it goes to.
BCPL?
As far as fertilizer is concerned, it goes to BVFCL and APL.
APL?
Yeah. APL.
APL?
Yeah.
Seagarden.
Tea Gardens, some of them go to the Tea Gardens and some small power plants.
Correct.
This is how this.
but our expectation is that once the IGGL is commissioned, we'll scale up our production. We have plenty of gas there. The current situation doesn't quite prompt us to scale up our production. The moment the IGGL happens and the CGD, I mean, blocks that have already been awarded, and those companies are all doing their backend work, so this integration of their network will help us to send gas to all parts of the country and all major parts of Assam.
And already recently, one thing has developed for the tea gardens. Generally, the tea gardens in Upper Assam takes the gas. The tea gardens in the middle part of Assam and lower part of, they were not taking. Now there is discussion going on to supply the gas to them also. So these networks.
Measure part of.
Seagarden.
Seagarden.
Yes.
Yes.
How big are these customers, sir? Could you explain in terms of, let's say, scalability of your supply there?
What exactly is your query?
My question is, how big can it be from a scalability of supply perspective?
Just.
We have to win perspective with us. We can list out the name of the customers along with the consumption.
Just hold on. He is coming. He'll meet his.
As far as Tea Gardens are concerned, most of our Tea Gardens are supplied through our Assam Gas Company Limited, which is a CGD player and gas transportation company in the area. So currently, they have close to 650 key customers, mostly in the Upper Assam region and Golaghat. And this same company is also expanding its own network, downstream network, in a few other districts in their Upper Assam area. Now, what the Director of Operations was mentioning, with the IGGL network coming in and connecting to Oil India's own upstream network, this gas will now become available even to the Tea Gardens, prolific Tea Gardens on the North Bank, specifically Sonitpur, Biswanath Chariali, Lakhimpur, all those areas. So it will suddenly give us scope to doubling the number of Tea Gardens that we are servicing currently.
I think his question was, how big are the customers?
So in terms of quantity, how much?
Who is taking?
It's 650 customers that we can have by.
Enter Oil India. NEEPCO, how much they are taking?
Okay.
So in terms of the bulk consumers of gas, industrial consumers, we have BCPL, which is taking around 1.35 MMSCMD of gas. NRL is taking around 1 million standard cubic meter of gas. Then there is APL, which is 0.5. BVFCL is taking 1.1 MMSCMD of gas. NEEPCO is taking 1.4 MMSCMD of gas. APGCL has two power plants at Namrup and Lakwa. They are taking 1.16 million metric standard cubic meters per day of gas. Assam Oil Division, AOD Refinery, is taking 0.3 MMSCMD. And Tea Gardens is around 0.723 MMSCMD. So that's largely the big customers. There are other various small customers like GAIL and small industrial units, which take around 0.1 to 0.2, depending on their requirements.
Once the CGD happens, then you will have a lot of industries coming out in Assam, which are now using other sources of oil. They would also be buying gas from us because gas is the country's objective is to transform to a gas-based economy. And then targeting the Tea Gardens in the northern part of the river, that all of that will help us to develop a real gas market in the northeastern part of the country.
If I may add, sir, there is a development coming up where a new fertilizer plant has been planned in Namrup. So that also will probably become a source of gas consumption.
Another one million standard cubic meters maybe.
Yeah. Which would be currently, they are consuming around 1.1, which might go up to 2.3. Thank you so much.
That's very helpful, sir. Thanks so much for the detailed explanation. Just one small second question, which is related to the new well gas. So ONGC, we heard them say that 10% of their production, the DGH has reviewed and classified as new well gas where they are getting higher realization, 12% of the last month's crude basket. When do you expect some of your production efforts, the hard work getting rewarded with higher realization, sir?
Okay. Yeah. Very interesting question, and we have already built up sufficient volumes of this new well and intervention gas. And with our expansion plans, as Director of Operations mentioned, we expect this new well gas to multiply even further and become a large portfolio of our total gas production in the next two years to come. For the volumes which we have already under these guidelines, we have already submitted to DGH, which has been assigned the noble responsibility of identifying and validating this gas. And very recently, DGH has vetted the quantities of gas which might be qualifying for this premium pricing, so now, since you'd understand, this requires an allocation from the ministry. From our side, Oil India has already given some numbers.
Once those numbers are vetted by the ministry, and we are expecting it to come soon, and we expect it to coincide with the DNPL augmentation and NRL coming, NRL refining capacity coming up, those two events should ideally coincide.
Sorry to interrupt. May I request Mr. Venkatan to please rejoin the queue? We have participants waiting for their turn.
Yeah. I'm done. Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Gagan Dixit from Elara Securities. Please go ahead.
Yeah. Yeah. Thanks for taking my question. Sir, when you say that you are waiting for the Indradhanush gas grid to get completed, then you have access for the rest of the India. So if I'm understanding correct, that you are waiting its connectivity till Numaligarh, I think, because after that, it's a then GAIL-Guwahati-Barauni pipeline, you will get it. So how much is the kilometer of the section, sir, that is left by the IGGL to be connected with your major field? I think it's in the Assam or Arunachal, I think.
Yeah. So there are two propositions. One proposition is the DNPL pipeline, which is already getting augmented. And there is a proposal for interconnecting at NRL, at Numaligarh with the Northeast Gas Grid. There is another proposal wherein Northeast Gas Grid, IGGL, has been given authorization from the ministry under Section 42 to lay a line up to Oil India's facility in Duliajan, which is the central hub of all gas processing for Assam and Arunachal fields. So this pipeline will directly get connected from Oil India's fields to the Northeast Gas Grid through a bigger pipeline. This pipeline will have a capacity of 3.3 MMSCMD. I hope that answers the question.
Okay. And sir, if my understanding correct, it's most likely it should be the Duliajan to the Kharsang somewhere. That's why you are waiting for the connectivity in the Northeast Gas Grid.
Yeah. I mean, I'd like to answer you is that Kharsang is a little bit different because we are connecting with Kumchai. Already, we have connected. Some 81 kilometers of pipeline has already been connected, and the Kumchai gas is coming. So by that way, we have reduced the flaring in Kumchai also, and we have increased our production also in Arunachal. So Kharsang, there is a proposal that Kharsang will also connect to the this comes from Arunachal, actually, southern part of Arunachal, from eastern districts of this Changlang district. There is a Kumchai. So it is an 81-kilometer pipeline. So it crosses many rivers, and it was a very daunting task, and our people have completed it. So I think if Kharsang any more gas comes up because that is with another JB.
So that gas can be connected to this particular pipeline by another hookup line, line being hooked up.
Sir, final question is, when it is expected to be completed, sir?
Oh, no. Actually, Kumchai line is completed.
Okay. So in Indradhanush, I mean, in Indradhanush gas grid, that's the portion that you are expecting. So I think, as you said, that when it comes, then your production, you are able to sell outside. So that's why I just want to understand.
So you're talking about the Indradhanush gas grid?
Yeah. So Indradhanush Gas Grid has been given authorization by MoPNG. Now, the proposal is with PNGRB. Once the PNGRB authorization comes, it is an 18-month project.
Okay, sir. Yeah. That's from me. Yeah. Thanks.
Thank you.
Thank you. The next question is from the line of Karthik Kohli from CLSA. Please go ahead.
Hello, sir. Thank you for taking the call. I just had a bookkeeping one. Could you please let me know the capex for the quarter and for the nine-month period?
Thank you, Mr. Kohli, but we cannot hear you that clearly. Your voice is sounding muffled, sir.
Just a second.
Hello?
I'm audible now.
Could you please repeat the question?
Hello?
Could you please repeat the question?
Yes.
Sir, could you let me know the sizing cost for the quarter?
Yeah. It is about 535 crores.
What was this last year?
Nine months. I'm talking about the nine months, and for the quarter, it is about INR 200 crores, INR 210 crores.
What was this in 3Q FY24?
Yeah. FY24, it was INR 388 crores, INR 390 crores for the nine months, and INR 125 crores for the quarter three.
Okay. So thank you so much. And just wanted to clarify, you said IGGL will take 18 months or the overall process will take 18 months?
We just said when the project will be completed.
Yeah. Yeah.
Project completion is 18 months.
18 months from now?
From when?
No.
From the PNGRB authorization.
Okay. Thank you so much, sir.
Thank you.
Thank you. The next question is from the line of Nitin Tiwari from PhillipCapital. Please go ahead.
Good morning, sir. Thank you for hosting your call and giving me the possibility to ask this question. So sir, I'd like to know just to get clarity on the questions which were asked earlier as well. If you can just lay out the roadmap for reaching the 4 MMT and 5 BCM that you spoke about. So I'm not very clear on your FY26 production guidance. So one, if you can help with that first. And then what is the timeline we are looking at for 4 MMT and 5 BCM? Secondly, what are the infrastructure requirements that are pending for ramping up our gas production? Because there were a couple of pipelines mentioned when you gave out the details. So I'm not very clear on which pipelines are under construction and which are pending authorization. You mentioned a PNGRB authorization pending for one pipeline.
So if you can just put the entire picture clearly in front of us, that would be very helpful. That would be my first question. Thank you.
Thank you. Yes. The 4 MMTs, the target, initially, we had planned for specific five areas we targeted to give maximum impetus on new drilling. So these were like I don't want to name the areas. This time, we have added two more areas. Two more areas. So seven areas we have taken up. So one of the areas, there are a little bit of surprise, a little bit of production as expected, but all other areas, like we have added this time, the Barekuri. Specifically, we have added Barekuri. And also Sessa, two more areas. So these are new. Sessa is a new discovery. And we are planning to drill a number of wells. Specifically in Barekuri, we are going to drill around 15 wells, 15 more wells in coming days. And in Sessa, we are planning for another three, four wells.
So the production will ramp up from these areas. And at the same time, we are working on the other five areas. So like Kumchai, we are planning to put, I think most probably we will be able to put two rigs together at the same time. So that Kumchai production will also ramp up. So these are some of the activities we are taking up. And with this, we are planning we are hopeful that we will be able to reach four. Yeah. So what is the timeline for that?
What is happening?
From 700 to now.
The timeline for 4 MMT, when are we going to see the 4 MMT production?
27.
2026 to 2027.
26, 27.
Yes. We are almost at 3.6. So it won't take us much time to reach that level.
Right.
These are some of the immediate activities that we have taken up. Apart from that, the announcement of the ninth round of OALP, we were holding around 55% of exploration acreage. After the announcement, we are yet to receive the letter of award from DGH. Our acreage will go up to more than a lakh sq km. So this shows our intent to scale up our production and go even beyond four. Four is the target for.
What is happening is that this time, we are targeting areas outside of Northeast also. Some prospective areas we have already earmarked. Most probably, if we get those areas, we may not go for seismic because seismic is already available in those areas. We will directly go for drilling in some high prospective areas. This is one action we are taking up.
Yeah. Just for the sake of an opportunity, I would just like to summarize it that in order to cover oil and gas production, what all initiatives we have been taken. Apart from the fundamental target of four million metric tons that we want to achieve by the next fiscal year or next fiscal years, which our director of operations commented. See, what happens is that we are primarily an upstream company with, of course, our presence in midstream, downstream, and even in alternative green and renewable energies, and even going into the mineral resources as well now. But to fuel all these initiatives, we need to have our bottom line fixed. So what we have been doing over the past four, five years, we have increased our exploration acreage by six to sevenfold. So what does this essentially mean?
This essentially means that if we don't explore, we don't identify. If we don't identify, we don't harness, evaluate. If we don't evaluate, we don't exploit or harness hydrocarbons and we do not develop them, so exploration is our forte. We'll keep on exploring, exploring, and exploring because this is only what is going to lead to reserve accretion and as I already mentioned in one of the previous questions, that this is bound to lead to reserve accretion and more reserves for us in the future, which will translate into better production of oil and gas and then what I mean to say is that what happened is that the government of India has recently released around 1 million sq km of area in the No-Go Zone areas in the east and western offshore of the Indian subcontinent.
These are very promising areas, which for the last 10 to 15 years, the government did not mean there were certain statutory problems, defense installations that these were not in place. But since the release of these No-Go Zone areas, Oil India Limited has taken a very aggressive and very calculated step in acquiring around 40,000 sq km of acreages as an operator, which is yet to be notified by the government of India. But we know that we have a lead with them. And these basins are Mahanadi, KG. And the most important thing is that we have, for the first time, put our foot onto the land of Gujarat in Cambay, where we were nowhere present. So this is another milestone that we have acquired and got, which is prospective.
Apart from this, we have also extended our collaboration and outreach because you know that exploration is inherent in uncertainties in terms of exploring, exploiting of hydrocarbon resources, which we have tied up with national and international oil companies for collaborating and have got three blocks in the Indian subcontinent to forward our exploration, development, and production targets. Thank you.
We also want to initially gas for the gas. We are doing some of the areas where, in terms of allocation of gas, we have already applied to the government that we need to allocate the increased amount of gas that needs to be given to the customers because the allocation is not done by us, so that is one part because that already we have applied from our side, we have applied that this much of gas we are going to give it to the customers, so that application has already gone to the ministry, and the ministry is looking at it. The other point I would like to raise here, tell you here is that sometimes because of the seasonal fluctuation and many other reasons, the gas wells needs to be shut down.
So what we are doing this time is that when we shut down the gas, we lose the associated oil that comes up or condensate, whatever that comes up. It is a loss to us. This time, what we have done is that we are looking at underground gas storage. Means when we produce the gas, this underground gas will be stored in the reserve while we take the liquid at the same time. So my liquid production doesn't go down. So this is what is already we have done. And in one area, in well called Naharkatia 257, we have already started putting the gas into as a storage. So if there is any demand supply issue, then we can immediately put it in the dry gas into the reservoir. But at the same time, we can produce the oil. These are some of the steps we have taken.
Okay. So that's very helpful. On the pipeline, we just wanted to understand that which pipeline has a pending authorization from PNGRB because I suppose we were talking about two pipelines here. One was IGGL, of course, and the other was the expansion of DNPL. And then you also spoke about the connection to Duliajan. So which pipeline is where the authorization is still pending?
Just one minute. I'll take one more area also. So sometimes what happens is that we have a pipeline because of one area called in the northern side called North Bank. So what happens there also, because of low uptake from other customers, there is an issue that we have to shut down the well. And we lose a lot of gas. So what we are doing now is that we are bypassing it with another pipeline. So we are bringing a 20 km pipeline. We are planning that. So this should also help us. This is a local pipeline, of course. This should help us in mitigating the risk of losing the gas in the process. But regarding the other pipeline, I am requesting to him, my colleague, to reply.
Yes. The DNPL pipeline, there is a capacity augmentation which is already underway from one to 2.5 MMSCMD. The other pipeline we are referring to is the IGGL pipeline, which has been permitted by or ordered by MOPND. There is a directive from MOPND to PNGRB for authorization. And once that authorization comes, it's an 18-month project. Third pipeline, which you were referring to, is the pipeline which connects our Arunachal Pradesh field to our central gas gathering station in Duliajan. So this pipeline has unlocked that Arunachal Pradesh field, which was long disconnected from the gas network, and that gas has been monetized. Now, since this pipeline is in place now, that Kumchai Arunachal Pradesh field can be developed further, and it has a capacity of another one million standard cubic meters per day.
Sorry to interrupt. May I request the participant to please rejoin the queue? We have other participants waiting for the turn. The next question is from the line of Nitin Tiwari from PhillipCapital. Please go ahead.
No, I'm already online. Thank you.
So yeah. So basically, the pipeline that we are talking about is connecting Arunachal to Duliajan. That's what the pipeline you're talking about where authorization is pending. No, that pipeline is already operational. We have constructed that pipeline. The Arunachal to Duliajan pipeline is already operational. The one is pending in the North Bank.
Pending is North Bank. Understood, sir. Thank you, sir, for the clarification. And second question, sir, is as you mentioned that you have acquired a number of acreages.
I'm listening to Mr. Nitin Tiwari. May I request to please rejoin the queue?
Ma'am, two questions are allowed, right? So this is the second question I'm asking.
Please go ahead, sir.
Yeah. Thank you. Sir, as you mentioned that you have acquired quite a bit of acreage in the recent licensing round. So when you see us enter into a collaboration, a technical collaboration with a global major, are you also evaluating something like that? Can we expect some announcement on that, sir? Thank you, sir. That is the second question from my end.
Yeah. Yeah, of course. We have been extending our outreach to various international oil and gas companies, both not just in terms of physical coexistence or physical collaborations, but what we are looking at is technology, knowledge partnership, and even PIs, means participating interests. So let me tell you that we have signed a technical service agreement with TotalEnergies for helping us in our exploration and development endeavors in deep and ultra-deep offshore waters so that we can leverage their expertise and knowledge. So it is primarily expertise and knowledge, and thereafter, later as we find them to be prospective together, we can mutually decide upon areas of potential interest where we can farm in or do other types of exploration activity.
But as far as other collaborations are there, we are already in touch with various international oil companies, which I'm not going to mention right now because we have not been able to freeze onto them. But they are in advanced stages. And the evaluations on the prospectivity perception and the exploration endeavors that will go into these acreages is already in place and in advanced stages. Thank you.
Thank you, sir.
Thank you. The next question is from the line of Pranita from Morgan Stanley. Please go ahead.
Sir, my name is Pranita from Morgan Stanley. Just two questions. First, in terms of, sir, you talked about flaring. In terms of percentage flaring because of lack of pipelines, because of the other issues in terms of demand, would you give us an idea of what percentage of your gas is right now getting flared? Or if you were to kind of put the question other way, what would be your total production capacity today if you did not have the supply or the demand constraints on the pipeline side?
Yeah. So, flaring, the flaring primary reason was not only due to pipelines. It was due to remote facilities, remote installations where there was associated gas where oil was being produced and that there was not sufficient capacity to put it into gas pipelines. Now, what we have done is we have progressively reduced the flares over the last one year, over the last two years, to a level of 0.2 MMSCMD. But at the same time, we have planned at 11 sites, new compressor facilities, which are remote facilities where compressors will be installed to put the low-pressure gas, which is being flared, into our gas distribution network. Now, the compressors have already started getting dispatched and delivered to our sites. And the first of these compressors will get installed in March 2025.
We expect to reach a level of zero normal flare in the course of next year.
In percentage terms, less than 2%. It has come down from 8% to 4%. The preceding nine months, that is FY 2023, our flaring percentage was 8%. Now, in the current nine months ended 31st December, this has come down to 4%.
Does it go to zero after the compressors?
Yes.
Yes. After implementation of all the 11 compressors we are bringing, I think it will further go down. Maybe close to 1.5 or 1.3. We are just monetizing the gas. This is also our green effort that there shouldn't be any escape of emissions into the environment. So it is a double kind of a whammy for us. It will help us generate more revenue and at the same time curtail the environmental cost.
Sir, the second question was more in terms of NRL. Can you share us the progress on the NRL project? How much is complete? What's the timelines are and the CapEx, etc.?
Yeah. Sir, more than 72%-73% complete and the physical progress is 78%. Sorry, 78% physical progress has been done. The project cost already spent is about INR 23,000 crore. It is still expected to be completed by December 25.
So all the major equipment and everything is all in place and I suppose the last pipeline works going on. So you can start mechanical completion in December 2025?
Majority of the units have already been physically completed by about more than 90%.
Okay. So sir, when do you start the commercial operations? Is it somewhere March 26 or?
The issue is that as soon as the new refinery, this new capacity gets completed, it is not that overnight it will pick up to 100%. It will gradually pick up to 100%. Maybe the first year it will run at about 50%-60%, then going forward to say 75, then 75%-100% will be achieved in the third year. Expected. What we are basically doing is that because refinery expansion is a progressive thing. It will happen over a period of time. However, at the other end, once it picks up, so that the associated facilities are all in place. So what we are doing is we are almost at the completion stage of the Numaligarh-Siliguri pipeline. That also is being augmented so that this capacity will go up from 1.7 to 2.5 to 5. So things are happening simultaneously.
This is what the Director of Finance is telling is that it's a product pipeline. Once we bring the crude, at the same time, we need to have the product going out. So if we cannot deliver the product, so in this case, our product pipeline is around 90% we are complete. And by April, by April of this year, 2025, it will complete before completion of the Paradip to Numaligarh pipeline, crude oil pipeline. That is the outlook.
So sir, is it fair to say that everything will be ready by December 25 or whatever logistical requirements are there and then you can kind of ramp up from December 25 or you ramp up from March 26?
Mechanical completion will be by December 2025. There will be some commissioning exercise that will be there. So it will take some time. After that, it will start like what he already said, that accordingly, this will start like the production will be getting augmented. It will be a step-by-step process.
Sir, for mechanical completion, you don't need any shutdowns or anything of that of the existing refinery units, correct? That should be all normal.
Once commissioning exercise will be done, then accordingly, this will be getting augmented.
Sorry to interrupt. May I request?
Thank you.
Thank you. The next question is from the line of Varatharajan Sivasankaran from Antique Stock Broking. Please go ahead.
Thank you for the opportunity. Two questions. One on the Andaman program. How is it going and what are the milestones we should look forward to?
Yeah. The Andaman, see, Oil India Limited has operated in the Andaman and the Northeast Coast of India in the past. But recently, we have again started our exploration activities in Andaman Shallow Offshore Blocks. There are two blocks over there. There are a full number of locations that have already been identified. One of them has been spudded and it has reached a target depth of around 2,805 meters. The drilling operations are on and the targets are Oligocene reservoirs which are expected at a depth of around 3,500 meters plus. So we are expecting and hopeful for making a discovery over there. Things are going on as we had planned as of now. So following this well, we'll be drilling another three wells in the Andaman Offshore Block.
Thank you. On the Numaligarh front, one about the crude pipeline progress and secondly, on the petrochemicals, what is the position currently and is the approval still pending from the board or is it more like approval is done and the ordering is pending?
So far as this approval, environmental clearance, etc., is concerned. These have already been received.
I'm talking about the petrochemical side of the story.
That is what I am saying. As far as the petrochemical plant is concerned, all environmental clearance, etc., have already been obtained. And we have already spent about Rs 800-900 crore on this project till now. Plus, since refinery expansion is also going ahead on a parallel footing, that is why these plants could not be taken up so aggressively and because we have got target completion within the next three years' time. By December 2028, we are expecting this plant also to be completed and to be in place. Total project cost is about Rs 7,200 crore.
The progress on the crude pipeline or percentage completion as of now?
Crude pipeline is on track.
But for completion by what date?
Yeah, yeah. It is expected to be completed along with the refinery expansion completion target of December 25.
Thank you a lot.
Thank you. The next question is from the line of Sabri Hazarika from Emkay Global. Please go ahead.
Yeah. Yeah, sir. Thank you. Thank you for the call. So this will be the last question. So I just wanted to clarify a few things. You mentioned that you mentioned about the oil guidance, but what is the gas production guidance for FY 2025 and 2026 and 5 BCM when it is expected to be hit?
BCM is targeted in the year 2027-28.
And what will be the production for FY26? How much are you planning?
It will be close to four. It will be close to four, 3.84.
BCM, right? Okay. And regarding the Arunachal pipeline that you said, this pipeline is commissioned, right?
Yes. Pipeline is commissioned. Arunachal pipeline is commissioned. Gas is already coming to Kusajan and to the FGGS.
Okay. So this pipeline will basically monetize around 1 MMSCMD of potential gas from the Arunachal fields, right? Including Kharsang, right?
Yes. You are right. Kharsang not included.
Kharsang not included. So this is different, right? Okay. Okay. And last question is you mentioned two more areas being added to that mission four. I didn't get the names properly. Sessabil or which one?
Yes, yes. You want to be specific. So these are Barekuri and Sessabil.
Sessabil and Barekuri, right?
Yes.
Okay. Okay. Fair enough. And last question, this North Bank pipeline IGGL is a new one which will connect Numaligarh with Duliajan directly. So you said PNGRB approval is expected in one month, then it will take another one and a half years to commission that pipeline. Is that right?
We have said that MOPNG has given its directive to PNGRB for authorization. Followed by that, IGGL has already applied for authorization and the authorization is expected anytime soon, and it will be the project duration for the completion of the pipeline.
Authorization will come in one or two months, right?
Right. It is expected anytime soon.
It can't be that specific. Yeah. Yeah. Yeah. Got it.
However, we are expecting that it will come.
Okay. Fair enough. And is there any major NRL shutdown which is expected because of the commissioning of the expanded capacity?
No. As of now, no.
Nothing as of now.
Actually, shutdown may not be required because, as you know, both these two units are independent. So these are the previous unit. The old unit can run independently of the new unit. So that is why shutdown of the old unit may not be required when this new unit will be commissioned.
Okay. Got it. Got it, sir. Thank you so much for this conference call and I hope it was quite informative and insightful for participants. So we'll end the call and before doing so, any closing comments from your side?
So it's a pleasure having you all with us for this interactive session on call. So I extend my sincere thanks to all those who participated in the phone call and wish you all the very best.
Thank you.
Thank you so much.
Thank you very much.
Thank you.
Thank you. Can you disconnect?
Yes. Thank you. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your line.