Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking. Thank you, and over to you, sir.
Thank you, Mia. Good morning, everyone. I'd like to welcome all the participants to the first quarter Oil India results call. We have senior management of Oil India, represented by Shri Ashok Das, Director HR, and also holding additional charge as Director Finance, Shri Pankaj Kumar Goswami, Director of Operations, Shri Saloma Yomdo, Director E&D, Shri Rupam Barua, ED & CFO, and Shri Sachidananda Maharana , CGM, and, of course, current I'd like to hand over the call to Shri Ashok Das for his initial remarks, and then we can go on to the Q&A. Please.
Thank you. A very warm good morning, ladies and gentlemen. At the outset, we would like to thank M/s Antique Stock Broking for organizing this call for discussing the first quarter FY25 results with the management of the company. The company's financial results for the quarter ended 30 June 2024, were approved by the Board of Directors on 8 August, that is yesterday, and have been published. The company has achieved significant milestones in terms of growth in production numbers of both crude oil and natural gas. The significant financial and operating achievements will be briefed by our CGM, F&A, which can be followed by a Q&A session. Thank you. So over to CGM, F&A.
Good morning, gentlemen. At the outset, I would like to thank Antique Stock Broking Limited for organizing today's analyst call. I am Sachidananda Maharana, CGM Finance of the company. The company's financial results of Q1 FY25 were published on 8 August 2024. I will 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 6.22% in quarter ended 30 June 2024, at 0.871 MMT, vis-a-vis 0.820 MMT in the quarter ended 30 June 2023.
Natural gas production during Q1 FY25 is at 0.818 BCM, increased by 9.8% over production in Q1 FY24, which was at 0.745 BCM. On the financial side, average crude oil price realization for Q1 FY25 is $84.89 per barrel, vis-à-vis $76.85 per barrel for Q1 of FY24, increased by 10.46%. Average natural gas price for Q1 FY25 has remained unchanged at $6.5 per MMBtu.
The turnover for Q1 FY25 has increased by 25.73% to INR 5,840 crore, compared to INR 4,645 crore in Q1 FY 2024, which is mainly due to higher crude oil price realization in Q1 FY 2025, compared to Q1 FY 2024, and higher production numbers. EBITDA margin for Q1 FY25 is 43.79%, vis-à-vis 53.49% for Q1 FY 2024. The reduction in EBITDA margin is mainly due to the increase in SAED from $2.59 per barrel in Q1 FY24 to $10.27 per barrel in Q1 FY25, and provision made towards service tax, GST, on royalty during Q1 FY 2025, amounting to INR 200 crore, vis-à-vis nil for Q1 FY 2024.
Profit after tax for Q1 FY25 is INR 1,487 crore, vis-à-vis INR 1,613 crore for Q1 FY24. The decline in PAT is mainly on account of increase in SAED and other statutory liabilities on account of increase in price realization and provision for GST on royalty. The earnings per share for Q1 FY25 is INR 9.02 per share, vis-à-vis INR 9.92 for Q1 FY24. Coming to financial performance of Numaligarh Refinery Limited, Oil India's material subsidiary. Profit after tax of Numaligarh Refinery Limited during Q1 FY25 is INR 430 crore, vis-à-vis loss of INR 77 crore during Q1 FY24.
NRL's gross refining margin during Q1 FY25 is $6.43 per barrel, vis-à-vis negative margin of $15.59 per barrel during Q1 FY24. NRL's EBITDA for Q1 FY25 is INR 734 crore, vis-à-vis negative EBITDA of INR 5 crore for Q1 FY24. Now, coming to consolidated results of the group company. Oil group turnover for the quarter ended thirtieth June 2024 is INR 9,351 crore, vis-à-vis INR 46,409 crore for the quarter ended thirtieth June 2024. And consolidated profit after tax for Q1 FY25 is INR 2,016 crore, vis-à-vis INR 1,400 crore for Q1 FY24. With this, my opening remark on the performance is over, and now we are open to Q&A session. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. 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.
Very good morning to you, sir. Thank you for the opportunity. A couple of questions. Firstly, with the performance in the last two quarters after the announcement was made essentially of the aggressive growth targets that we have put in place for oil and gas, would you say that the performance of the wells and development of the, whatever new, assets we are developing, keeps us on track to achieve the targets that had been shared, which I believe was getting to around 4 million plus, in terms of oil and above, and, you know, even higher 5 BCF for gas within the next, 2-3 years? Just wanted your sense on where the, you know, update stands on that front.
Yeah, good morning.
Morning, sir.
Can I answer?
Yes, please, sir.
Yeah. I'm Pankaj Kumar Goswami, Director Operations. So, it's a very valid question from your side, and as you can see that the crude oil production from the compared to last quarter, is increasing by 6%, more than 6%, and the natural gas production is almost 10% increased. So with that, we can very much assure you that the trajectory we have projected in the last year is in fact, and we have been moving in that trajectory only.
In fact, the crude oil production and the natural gas production, both the things are getting a little bit affected because of non-performance of some of the gas subsidiaries and gas off takers, and because of the cyclic demand of gas, we are not being able to produce the gas to the extent we can produce. So that is actually affecting, but otherwise, from our side, the wells are ready, and once the North East gas grid is in place, which we are expecting by end of this year, there will be no interruption in gas production, and we'll be able to increase the gas production to the five BCF level that we are planning in the next two years.
Sir, is it possible... Sorry, go ahead, sir.
Yeah. Could I answer your question, or you need something more?
Yeah, I was just saying, sir, just as a follow-up, is it possible to give a slightly more, you know, granular guidance on what exit rate we expect for FY 2026 for both oil and gas and for 2027, if that is available?
Yeah. In fact, the growth part, if you can say, the number of wells we have drilled in last 2-3 years, if you can compare, we every year have been increasing the number of new wells drilled in our areas. So this year we are planning 78 wells, and if I talk about the next year, then we are planning 100 wells. So if you can talk about 2026 to 2027, if we are planning 100 drilling, new drilling to be completed. And similarly for the old well workover also, we are expecting a growth of around 20%. So that way, our plan for the next 2 to 3 years are also on track. I can say that.
Sir, so one more question I had with respect to NRL. If you can kindly let us know the status of the expansion project, what is the investment committed, what is the investment completed, and what is the first year where we can expect the full capacity to be online for the expansion?
As you know, this project cost for this NRL is INR 20,000 crore. Currently, the physical progress is 65%, and we are expecting that the completion will be by end 2025. That is, December 2025.
Okay. Sir, what has been the, I mean, what is the equity contribution Oil India has made so far in the project?
J ust give one minute.
Sure.
Actually, depending on the progress and the financial requirement, the current year, we have total equity contribution will be around INR 9,500 crore for this project. Out of that 69% will be Oil India's share.
Understood, sir. My question was more around how much have we already invested, rather than the planned amount, sir?
Roughly around INR 19,000 crore has already been invested.
In the project, INR 90,000 crore has already been invested?
Yes .
Understood, sir. That is very useful. I'll come back in the queue. Thanks, sir.
Yeah, thank you.
Thank you. The next question will be from the line of Rajesh Gajra from Informist Media Private Limited. Please go ahead.
Hello, sir. Can you please share just three numbers from the previous quarter, the March quarter, January to March quarter, crude oil price realization figure and the sales figure for crude oil and natural gas? That's all from me.
Crude oil sales for Q1 2024-2025 was at INR 4,198 crores.
In terms of volume, not in terms of revenue?
Yes, that's right. I f you see the crude oil production, as I already explained, the quarter-on-quarter increase is 6.22%. The Q1 2024/2025 production was at point eight seven one MMT, as compared to Q1 2023/2024 production of point eight two zero MMT. And the sales numbers, and the sales numbers are, Q1 2024/2023 MMT. Sorry, Q1 2023/2024, sales number of point seven four seven MMT.
In the March quarter, January to March?
You know, once we got this Q4 .
Yeah.
The Q4 , the total Crude Oil production was 0.848 MMT.
And sales?
Was 0.840 MMT.
Point 8... Okay. And and natural gas, sir?
Natural gas production is 0.805 BCM, and sale is 0.618.
Sorry, I didn't get that. Point? Which one was-
Total sales. Yeah, it was 0.618 for the Q4.
For Q4. Okay. Thank you. Thank you very much.
Thank you. Ladies and gentlemen, before we take the next question, I would like to remind participants that you may press Star and One to ask a question. The next question will be from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead.
Thank you, sir, for this opportunity. I had a couple of questions. One is basically, is there any particular update on the APM gas price upside that modality DGH has been working? Do we have additional inputs in terms of when will it get finalized and how the measurement is being likely to be?
No, at present, there is not much clarity on that, but as you know, we'll be entitled to $0.25 increase from April 2025 onwards.
Sir, what increase will be speaking of? Could you repeat it, please?
Sorry, come again.
I didn't understand the question. What would be there from April 2025?
That is a $0.25 increase.
Right.
MMBtu. Right now it is $6.5/MMBtu. That is what we are realizing. And as per the guidelines, that will be increasing by 25% from April 1, 2025.
Right. I was actually referring to the, basically, the additional wealth or additional productions that we can derive from the- [Crosstalk].
About that, gas, that is what you are talking about?
Yes.
Right now there is no clarity on that, because we are also waiting for that.
Sure. In terms of the recent judgment by the nine-judge bench, what would be the implication for the royalty? GST on royalty that you are paying in protest. Does this sort of judgment crystallizes that liability?
Actually, sir, the GST on royalty, which has, we have been paying in a protest till, maybe sometime back, and, presently on hold in Assam and Arunachal Pradesh due to some Guwahati High Court interim stay order. This, entire amount we have already provided for in their account in the last year itself, and this year, whatever additional amount has, is there, that has also been provided this time. So total amount we have already provided is roughly about INR 3,300 crore till now. But then, accordingly, any decision of Supreme Court, may, although it may go against us, will not have any impact on the bottom line of the company, first of all.
Secondly, the decision which has already been given by the nine-judge bench, there, our matter is not there because, and we have already disclosed in our notes to accounts also, which we may go ahead. So actually, sir, this amount, although this particular case, we tried to get tagged with the nine-judge bench matter, but finally it got detached in the month of March itself. So ultimately, what will happen that in our case, there will be a separate decision from the Supreme Court, because our case is lying under Oilfield Regulation and Development, and particularly, this decision, which has been pronounced by the Supreme Court recently, this refers to the MMDR Act
Understood, sir. So basically, we will need a separate judgment from the Supreme Court to finalize on this?
Yeah.
And last question was about the, basically, the completion of the Indradhanush Gas Grid, and accordingly, sort of increase in the gas offtake for us. So how do we sort of see the gas sales volume ramp up coming through? Any incremental update on that, in terms of tying up of the customers or visibility on the volumes that we can deliver?
You would like to take this call, sir, this question?
Yeah. Yes. The visibility in terms of, I think, you are talking about the consumers. So first of all, we are looking for a increase in gas consumption in the NRP, Numaligarh Refinery Expansion Project. So once this project is complete, there will be a additional gas requirement for that. Then there are some additional requirements coming up from Assam Power Generation Corporation Limited. Then another gas demand is coming up from BCPL, and some gas demand is also from the NEEPCO side. So there are within the area itself, northeast itself, there are some customers which are coming up. Then we are also into a CGD for Guwahati, so Guwahati metro area. So North East Gas Distribution Company Limited is working there.
So there will be customers in Guwahati. Then another customer base is being created in the north bank of the river, so that is North East Gas Distribution Company Limited for Lakhimpur and other areas. And once this Indradhanush Gas Grid is complete in the entire Northeast. So we have now some GAs in Nagaland and Arunachal Pradesh. So these two areas will also be catered for gas by this Indradhanush Gas Grid pipeline. So all these new GAs are coming up, entire Northeast, various GAs are coming up. So Tripura is another GA. So with that, there will be definitely customers for enhanced gas production. And at the same time, once the Pradhan Mantri Urja Ganga pipeline is connected to IGGL, then the gas produced in the Northeast can be brought to the mainland India.
That's the main opportunity we are looking for enhancing gas production.
Thank you, sir, for the color on the customer. Is it also possible to indicate quantum of volume that can be offtaken by these classes of con sumers?
Exactly at this point of time, I do not have the exact number.
Broad indication also in terms of sort of, cap, would it be half a MMSCMD or more, sort of, what could go in the market within the area? What could be basically we get when we access the Guwahati, and then what would be the additional volumes when we are able to approach the Arunachal Pradesh and the other area? Some indication, broad?
Some broad indication, if I have to say that, as of now, I can say that from 3 BCM-3.5 BCM can be within the area, and rest, whatever we produce, we can discuss it to the mainland India.
Sure, sir. Thanks for the clarification and color. Very helpful.
Thank you. The next question will be from the line of Somaiya V. from Avendus Spark. Please go ahead.
Thanks for the opportunity, sir. So the first question, you did mention the number of wells, that's planned to be drilled for this year is 78 and 100 next couple of years. So what would this be in the last 2 to 3 years ?
Please, please repeat the last part of the question.
Number of wells tha were drilled in the last 2 to 3 years, sir?
Okay, DB, you can respond.
Yeah, I think, in... Let's see, let's have a look at the last five years, actually. The 2019 to 2020, we drilled 36 wells. 2020 to 2021, we drilled 36 wells. 2021 to 2022, we drilled 38 wells. 2023, 2022 to 2023, we drilled 45 wells, and last year, 2023 to 2024, we drilled 61 wells. So these 61 wells, which we have drilled last year, is actually the highest we have ever drilled so far, and this has given us the confidence that, we can still achieve higher numbers. And that's why the target for the current year is 78 wells. And accordingly, we are trying to increase our, number of drilling fleet rigs to cater to the additional requirements.
Got it, sir. Helpful. Sir, and also this, number of wells that we plan to drill, can we give, some details around the fields where this predominantly will be drilled?
Well, predominantly, we are going to be drilling in, in the northeast, in the northeast regions.
Okay. Just-- Yes, sir.
Of course, in our oilfield blocks, which are now maturing from exploration in the sense of seismic acquisition, processing, and interpretation. So whatever leads and prospects have been generated will be targeted in the oilfield areas. In the immediate future, some of the wells will also be drilled in the blocks. As you speak, we are already drilling in Rajasthan and Mahanadi. From further onwards, we are also going to be drilling in India for the DSF wells. From October, we are going to start our exploration campaign in Andaman, and we are going to build the 3 Andaman exploratory as well.
Got it, sir. So also, you did mention that the opportunity once NRL expansion comes online in terms of gas consumption, any broad number in terms of what would be the demand that would come from NRL on the gas side?
For NRL, it will be close to, once the expansion is achieved, then, it will be the production to 2 MMSCMD for this year, expanded capacity.
Once this 9 million ton comes online, fully, then the demand would be around 2 MMSCMD?
Yes.
Okay, got it. So, one keeping question: So what will be the, you know, in terms of a debt breakup, what is the total consolidated, and how much is NRL, how much is it standalone, and then, the international assets? And also, if you could give your CapEx plans for this year and next year.
On standalone, as you know, on a standalone basis, the debt is INR 11,330 crore, which is primarily the debt the company has taken from its project. NRL's debt as of June 31 is INR 9,522 crore.
This INR 9,000-odd crores is entirely for that INR 19,000-odd crores of CapEx that you have spent so far, so?
Yeah.
Got it, sir. Thank you.
Thank you. The next question will be from the line of Mr. Nitin Tiwari from PhillipCapital. Please go ahead.
Good morning, sir. Thank you for the opportunity. Just wanted to stay on the topic of Indradhanush gas pipeline network. So if you can help me understand two things: What is the commissioning timeline as we stand today for the pipeline network? One is that, and secondly, when you speak about North Bank connection, so what is the point of connection? From where to where are we getting connected in terms of location, when you talk about North Bank connection?
This pipeline, we expect first gas by December this year. So this is one timeline that I can tell you. But the, for the North Bank, actually, the pipeline is coming from the other bank, from Guwahati to Jorhat. There is a crossing of the river Brahmaputra. So in that line, after crossing Brahmaputra, it's in the North Bank connection. That way, it is connected to North Bank near Tezpur area.
Sorry, sir. So basically, the connection would be?
Yeah, there is one more plan as a next phase of the Indradhanush Gas Grid pipeline which is being approved now. So that pipeline will connect this from Duliajan up to the North Bank, other end of the Indradhanush gas grid. So that will make the entire connectivity in the North Bank easier. But as of now, the North Bank is connected near Tezpur.
So, as of now, the connection is there near Tezpur. It is being undertaken or it is already connected near Tezpur?
The HGD micro tunneling, the job has been completed, so it's the connection is done.
Right.
The line is to be completed till now, so the remaining part of the job is going on now.
U nderstood, sir. So, basically, then phase two commissioning for IGGL would be what?
Phase two, IGGL actually, various phases. In fact, IGGL will connect all the Northeast states. So, there are various phases, but the first phase is to connect the Assam to Guwahati area. So that connection, first phase, is now underway.
So the reason I ask this question about North Bank connectivity is because when we look at the map for Indo-Gangetic gas pipeline, so the phase one actually looks to be running on north of Brahmaputra only. So I couldn't understand what is the North Bank connection then. So are we connecting the south part of northeast with the IGGL is phase one? Is that what we are talking about?
Yes, yes. Exactly. When I am talking about Assam north side and south side, the river Brahmaputra is the dividing thing. So, north, north of river Brahmaputra, the pipeline is coming from Guwahati area to north of river Brahmaputra, and from there, it is crossing near Majuli to Jorhat. So this is the connectivity as of now we are making.
Okay.
If you can see the first phase, the map. [crosstalk]. The connection is through North Bank and coming to South Bank near Majuli, and it's connected to Jorhat, to Numaligarh, and all those areas. [Crosstalk.] The present pipeline is like that. So we are talking about one more pipeline, which will be connected from Duliajan. It will start, and it will cross the river Brahmaputra near Sadiya or some area, and it will come across the North Bank to the North Bank connection of the present North Bank connection of the IGGL phase 1.
This is the DNP, this is the DNP pipeline, what is known as DNP?
DNP pipeline is in the South Bank. DNP pipeline is in the South Bank. [Crosstalk]. It has crossed the river Brahmaputra. So it is from Duliajan to Numaligarh directly.
Okay. So this is a completely new section we are talking about, which is crossing from Duliajan to north. Okay, got it. So apparently, but here, sir, there is some delay in phase one commissioning as well, because I think the earlier timeline was July, August. So now you're saying, you're saying it stands revised to December?
Yes, yes. There, there is some delay.
Yeah. And secondly, sir, just wanted one clarification on the earlier number that you gave. So the equity contribution you mentioned in Numaligarh, is this INR 10,500 crore, total equity contribution?
INR 8,500 will be total equity part. Sir, INR 8,500 will be total equity part, because INR 18,000 crore has been earmarked for borrowings. Only.
So INR 8,500 - how much have we already invested out of this INR 8,500?
No, see, as you know, we have already acquired this 70% stake way back in March 2021. Okay? So subsequently, there was one right issue where we had made some this infusion. But thereafter, actually, the refinery expansion is going on with debt as well as equity contribution out of internal accruals of Numaligarh Refinery itself.
As of now, we have not allocated any equity to this INR 8,500?
Yeah, yeah. Separately, we have not allocated any equity so till date, till now. But subsequently, depending on the progress of the project and the requirement of funds, we will see, because maximum contribution, even if anything goes, that will not exceed INR 3,000 crore i n terms of equity, yeah.
Understood, sir. Thank you so much.
Thank you. The next question will be from the line of Abhishek Datta from Anand.
Hello, sir. So just wanted to know, like, once the Numaligarh expansion is commissioned, in December 2025, when do you expect full ramp up of the same?
As you are aware, once this new capacity is installed, in the first year, it will be around 50% to 60%, and then, slowly it will ramp up to 100% by, say, second year.
In FY 2027, we can expect only 50% to 60%?
Yeah, 2025, 2026... Yeah, 2026, 2027, it can say that it will be reaching near to 100%. 2025, 2026, because it will be completing in December, so it is for only for three, three months it will be there for 2025, 2026.
Will you be eligible for excise benefits on exports, any exports you are making from the expanded capacity?
No, there is no excise benefit on export. But yes, whatever production is there, that is, whatever sales in the domestic front, that will be definitely eligible for the excise benefit.
In the expanded capacity, what volumes you have targeted for to export?
Yeah, we'll come back to you separately, sir, because the data we don't have readily available at this time.
Okay, sir. Thank you so much.
Thank you. The next question will be from the line of Anuj Sharma from M3 Investments . Please go ahead.
Yeah, thank you. You know, in terms of number of wells being drilled, what is the success factor in the success rate of drilling of wells. So let's say it was five years ago versus now, how many wells we assume or we estimate for a success rate?
Well, as you know, there are two categories of wells that we generally drill. One is, right, one is exploration and one is exploratory, and the other is development. So the development or the operating wells or the infill wells, they are relatively have a good control. So for example, in the existing fields. So as far as our record goes, in terms of development wells, our success ratio is almost 100%, because we know that we are certainly going to encounter that particular hydrocarbon zone. Now, in case of exploration, especially in well-being areas or where we have not drilled, even in Assam, where we are drilling and we are going to the flanks or going to the thrust belt area, those are relatively unknowns.
So in terms of exploratory wells, our success rate over the years have been hovering in the range of 50%-60%. So that number still holds, actually. So 50%-60% is still the exploration success ratio, which is not bad. If you have university look, people will be talking about 30% is a very good number. But yeah, at development wells, we are almost hundred percent success ratio is there. Because we go through a very robust system of, you know, releasing the wells to be drilled. So we have a comprehensive exploration and development portfolio management board, which reviews all the proposed wells which are proposed or identified for drilling, whether it is exploration or development, and then only a call is taken to finally release the wells for drilling.
All right. All right, that's helpful. And our target is to maintain this level of 60%, or our aspiration is,
Yes, our aspiration would be close to, close to 80, 90%, actually, that's what, what should be our target.
Okay. Second is in the PPT, we have mentioned that we have drilled 61, which is the highest wells with the same amount of rigs. So, is it right to assume that the cost of drilling a well is going down, or is it offset due to the inflationary increase in the cost of equipment or cost of, or the expenses for drilling a well? Some light on that.
Yeah. So the number of wells that we drilled last year is maintaining the full fleet. Like I mentioned in my earlier answer, when we are going to announce our drilling campaign on the numbers of wells to be drilled, we'll be announcing our fleet as well. But the question you asked is that we reached this number without enhancing our fleet, and there are a couple of things involved in that. One is, of course, improving their drilling efficiency, engaging newer and modern technology in our existing fleets. That is one. And the second thing that we did was that, when you drill a rig and complete the well, we used to use the same rig for the initial testing of the well itself.
So what happens is, when you are engaging the rig for testing also upon completion, to produce from that well, you lose another month's time about, roughly on an average per rig. So what we have taken that decision was that we will build a combo pad, a larger pad area, so that once the drilling part is completed, once the hermetical testing of the final casing is completed, we will move over the rig to drill to another location and bring back a workover rig, a smaller rig, which is used for servicing, for testing the well. So this is the reason why we have been able to engage the drilling rigs for more drilling activities and use the smaller workover rigs for testing the well. And that's why we have saved a lot on rig time and improved on the drilling performance.
Yeah, thanks. My last question is on the expenses related to upstream. What is the trend there? How much inflation do you expect and expenses relating to upstream over the next three years? Thank you.
With the increased crude prices, definitely there will be impact on the research cost also. So, we can expect a normal increase over the current prices. But, like right now, it is the crude price is hovering around $80 per barrel. So we expect that the prices, whatever increase will be, say, 5%-6% per annum, still going to go through in 2023. So another positive side, which we foresee is that, in case, say, our main products, crude oil and natural gas, are brought in within GST, then what will happen is we may be able to make substantial savings in terms of ITC, in this input tax credit, which is presently being charged to power. So that will be a good saving for us, because already talks are on that these products are also likely to be included in the fold of GST.
I will try to also other insight on our in terms of in the same field. So please go ahead. I can give you the answer on that as well.
All right. Thank you. There was a lot of echo in the noise, but thank you for the answers.
Thank you very much. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to one per participant. I repeat, please limit your questions to one per participant. The next question will be from the line of Harsh Maru from Emkay Global. Please go ahead.
Yeah, thank you for the opportunity, sir. My question is relating to the unrest that is happening in Bangladesh. So in terms of NRL's offtake and export of products to Bangladesh, do we foresee any impact on the current as well as the expanded capacity of NRL?
Actually, it is too early to comment on this. But anyway, let me just take the data from NRL and we can come back on that.
Sir, and just one bookkeeping: what's the CapEx? 2025 and 2026?
CapEx for?
2025 and 2026 for Oil India and NRL both.
For Oil India, it is 24-25, it is INR 6,880 crore. That is the CapEx.
Now the NRL 2024-25 is available INR 9,660 crore.
Okay. Thank you so much, sir.
Thank you very much. The next question will be from the line of Gagan Dixit from Elara Securities Please go ahead.
Yeah, thanks for taking my question, sir. Sir, if I analyze your this reserve trend and production trend of the past eight years, so it looks like on the 1P side, you almost added 25 BCM of the gas reserves in the past year, I can see. While you produced almost 24 BCM. So if I right, it means you are almost adding the reserves at the double rate of the production in terms of gas. While in case of oil, it's almost flat 1P reserve. So I can safely assume that this your Assam basin is more prolific towards the gas side, I mean, I mean, in the future, upside potential is more towards the gas in future?
No, that's not a correct way of making a one-to-one correlation. So the only thing is that in the recent past, we have been making more gas discoveries than the oil. But that can change immediately tomorrow. So next year you might encounter more oil prospects rather than gas, and then the equation changes completely. So it is... I wouldn't say it is a fair, you know, judgment to say that we have more gas than oil.
Okay. So you mean excess of, I mean, you are also have the, and see potential of the oil side also in the Assam. An d also, whatever the gas reserve addition, it's all driven by the exploratory sector, that I assume, not from the gas price increase, that I can safely assume, right?
Well, there are two things that you have to understand here in terms of, in terms of gas reserves. So, what happens is, whatever oil you produce, it's immediately sellable, right? You can have a worldwide market for it. That's why in terms of oil, whatever you discover can immediately be classified as reserves. That's what the definition of the Society of Petroleum Engineers. There's a Petroleum Resources Management System definition of 2017 which is widely accepted, where any oil reserves which is commercially viable is a reserve. Now, in terms of gas, gas also has to be commercially viable, that is one.
But then for the gas part, what happens is you have to have a gas sale agreement. You may have a gas reserves which can last you 100 years. But then you have a gas sale agreement with an entity. Say, you have a gas sale agreement with NRL. Where for the next 20 years you will have the agreement, and you can only sell 20 million out of the 100 in the next 20 years So your reserves will be 20 for gas. And that will get... Technically, technically producible gas will be, say, 100. But since you are governed by the gas sale agreement. T he gas reserves will only be linked to that particular period. It's another thing that after 20 years, you will extend the gas sale agreement, and then, then your reserves then again will get upgraded further. Gas, in terms of gas.
Okay. So it's more the addition of the customer than the addition of the contingent to the reserve category?
Yeah. I t, it can be both. I mean, you can have addition. Otherwise, the gas reserves again will get upgraded once you have the longer period of your gas sale agreement.
Okay, S ir, my final question is: what is the capacity of the gas pipeline that you are connecting from North Assam to the south of Assam?
Hello, sir. T he line is not yet, the DFR exercise is going on, so as of now, the figure is not available with us, but it will be to cater for the gas production of the, our gas production in our Northeast state. So it will be around, say, to cater for 3 BCM, we'll consider that pipeline, because the other pipeline is there for, DNPL, which is connecting in the south bank of the river.
Okay. 3 BCM additional, I can assume you are trying something capacity for the northern side of the place? Yes. Yes. Okay, okay. That's from my side, sir. Thank you.
Thank you very much. The next question will be from the line of Vikas Jain from CLSA. Before that, I would like to remind the participants, in order to ensure the management is able to address questions from all the participants, please limit your questions to one per participant. Mr. Vikash, please go ahead.
Hi, thanks for taking my questions. I have just two small questions. Firstly, on this provision for royalty. I just wanted to double confirm that these provisions are part of other expenditure, not part of royalty, right, when you report them?
It is part of our other expenditure only.
Sure. T he one other thing was, can you give me the number for seismic for this quarter, please?
INR 168 crores.
INR 168, that's what?
Yes.
Okay. Thank you so much.
Thank you. The next question will be from the line of Nitin Tiwari from PhillipCapital. Please go ahead.
Thank you for the opportunity again, sir. Just wanted to have the metric around how many wells are we operating at the moment? So whatever production that we are having in terms of crude oil and natural gas, how many wells is that coming from? And are all wells, like, you know, having both the productions, or like, there are standalone wells as well for crude oil and natural gas? So that will be well.
Well, currently, as of today, we have a fleet of 20 drilling wells. And these 20 drilling wells are actually, 10 of them are owned by Oil India itself, and 10 are outsourced.
No, no, sir, I was referring to how many wells we are operating, not the rigs. In the total number of the production that we have, how many wells are we operating?
Oh, okay. DO, sir, you have the exact numbers?
I have a rough estimate. Yes. Yeah, this is only rough estimate. Exact number, it varies from, day to day or month to month, you can say. So, your question was, what I could understand, that whether these wells are standalone gas well or oil well, and what is the total number of wells?
Correct, correct.
I think that was the question.
Right.
Total, total number of wells varies from 150 to 200.
Okay.
Some of the wells, majority of the wells are producing oil and gas both.
Okay.
Associated, yeah, well, we can, we call it-
Mm-hmm.
Because we produce oil and gas both. But there are some, strictly, gas wells, 100% gas wells, which are called non-associated gas wells, but the number is very less.
Okay.
Most of the wells are associated with.
All right. I mean, it's then safe to assume that as your gas production is ramped up when the new gas-based agreements are signed, your crude production would accordingly also go up because you would have both the productions going up simultaneously, right?
Yes.
And, secondly, I also wanted to confirm what percentage of the area in the Assam Basin is already sort of explored and, like, you know, and what percentage is remaining in terms of exploration?
He can take that question, I think. Yeah. Well, in Assam, if you consider Assam, mainly the shelf part of the basin. So, rather than talking about the state in terms of geography, we generally talk, when in terms of exploration for oil and gas, we tell, we talk in terms of the prospectivity, in terms of the sediments.
Sediments, yeah.
Yeah. So it's very difficult to, you know, say whether geographically this much has been explored or do you think from the point of view of the sediments, it has been explored. But, if you look at the numbers that we have as of now. We are actually exploring in the main shelf part of the Assam Basin, where we have extensive exploration done. Oil India as well as ONGC. In the shelf part of the basin, it's roughly about 5,000 sq km where we operate.
Okay.
The other area, which is in the platform belt area, which is bordering the states of, like, Mizoram and Nagaland, they are relatively unexplored. So, for example, in Mizoram, we have explored and we have drilled four wells already, and we have done a thorough basin of study, but there has become a prospective presence to be there at present. Similarly, Nagaland actually, we have kind of explored in all this. Meghalaya is going for exploration now. We are going to take two blocks out of this, coming down, you would say the most were explorers as well.
Right. So, the reason I asked this question, I was trying to understand that what percentage of prospectivity have you already sort of come across or explored, and what percentage remains as far as, like, you know, Assam Basin is concerned? So because, like, when you spoke about.
If you look at the Assam and Assam-Arakan basin and you, you will have this number in the DGS website as well. So what is, the number that you'll find is that about 5.5 billion tons of oil equivalent are there yet to find resources. 5.5 billion tons of oil equivalent.
5.5 billion, you say? 5.5 billion tons.
5.5 billion tons of oil equivalent, out of which only about 2 billion tons of oil equivalent have been established.
Okay.
There would you say primarily.
Mm-hmm.
So you can say that 3.5 is yet to be discovered or established. So that is taking your percentage to about close to 70%, right?
Right. Right. This is very helpful, sir. This is a very good material that you've put to us, so thank you so much for that. That's all from me.
Yes.
Thank you very much. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Okay. Thank you so much. From here we thank all the persons who have raised questions. I am sure you have got the answers to your questions. I must thank Antique Stock Broking Limited once again, and our officials of Oil India Limited, for participating in this call. Thank you. Have a nice day.
Thank you. I would now like to hand the conference over to Mr. Varatharajan , sir, for his remarks.
Thank you. On behalf of Antique Stock Broking, we would like to thank all the participants, as well as the management, for taking time to participate in the call. We'd also like to thank the management for giving us this opportunity to hold this call. Thanks, everyone, and have a nice day.
Thank you.
Thank you.
Thank you for joining us, and you may now disconnect your lines.