Ladies and gentlemen, good day and welcome to Oil India Limited Q2 FY 2026 Earnings Conference Call, hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vardharajan. Thank you, and over to you, sir.
Thank you, Shravani. Very good morning to everyone. I would like to extend a very warm welcome to all the participants and the top management of Oil India Limited. We have with us today the top management of Oil India, represented by Mr. Abhijit Majumdar, Director Finance; Mr. Salomon Amdo, Director Exploration and Development; Mr. Trailukya Borgohain , Director Operations; Mr. Bhaskar Phukan , MD NRL; Mr. Ranjan Goswami, ED Business Development; Mr. Ajaykumar Sahu, ED Company Secretary; and Mr. Abhijit Das, CGM F&A. Without much ado, I would like to hand over the call to Mr. Abhijit Majumdar for the opening remarks. The floor is yours.
Good morning, ladies and gentlemen. At the outset, I would like to thank Antique Stock Broking Limited for hosting today's analyst and investor call for Oil India Limited. I am Abhijit Majumdar, Director Finance. I am joined today by my colleagues from Oil India: Mr. Trailukya Borgohain , Director Operations Oil; Mr. Bhaskar Phukan , MD NRL, which is our material subsidiary; Mr. Ranjan Goswami, Executive Director Business Development Oil; Mr. Ajaykumar Sahu, Executive Director Company Secretary Oil; Mr. Abhijit Das, CGM F&A Oil; Mr. Dharam Singh Mandral, CGM Exploration and Development Oil; Mr. Saket Garodia from NRL Finance Team. On behalf of the management, I welcome you to our Q2 FY 2025-2026 earnings call, covering the period July 1 to September 30, 2025. The financial results were approved by the board and duly published on November 14, 2025, based on statutory requirements.
Now, I would like to hand over to our Chief Investor Relations Officer, Mr. Abhijit Das, who will provide an overview of the performance of the current quarter and half-year ended September 30, 2025. Mr. Das, please.
Thank you, sir, for the introduction. Good morning to all who have joined this earnings call of Oil India Limited. A brief strategic overview of our performance during the quarter and the half-year ended for FY 2025-2026: Oil India continued in a steady transition into an integrated energy company. On upstream front, we have continued to strengthen our resource base through the acreages expansion, the focus exploration, and the new prospective areas, achieving drilling targets as planned and at par production. The midstream pipeline expansion is progressing well, and we are glad to announce to you that the mechanical completion of our new molecular cellular pipeline was commissioned on October 12, 2025. On the downstream side, expansion of the new molecular refinery is gathering momentum with commissioning of select units on track, and we are well planned to get commissioned on December 2025. A brief operational highlights for this half-year ended.
I will now provide the highlights of our company's operational and financial performance for the current quarter. We experienced a minor dip in our upstream operations this quarter. The combined oil and gas production for Q2 FY 2026 is 1.652 million metric tons of oil equivalent, and here it is 3.332 million metric tons. The crude oil production for the quarter stood at 0.848 million metric tons, a minor decrease of 0.6% on quarter-to-quarter and 2.58% on year-to-year. The natural gas production for the quarter stood at 0.804 BCM, a marginal decrease of - 2.8% on quarter-to-quarter and an increase of 0.6% on year-to-year basis. The key rationale of our production dip was driven by a temporary production slowdown owing to the external factors in the Northeast Region of the country. However, the operations have now normalized, and daily production is again on its normal pace.
On the exploration and the development front, progress has remained strong. Oil India has drilled 18 new wells in Q2 FY 2026, achieving 100% of our target drilling, and drilled 32 wells in HY 2026, an increase of 28% on year-to-year. Additionally, our offshore exploration campaign in the Andaman Basin has achieved a key milestone with gas occurrence in East Andaman. A brief on our international front: Oil India holds 4% in Area 1 in Mozambique through its joint venture entity, BREML. In April 2021, degradation of the security situation in Cabo Delgado Province in Mozambique necessitated the Area 1 concessionaries to declare force majeure and suspended the development activities. We have good news here that the force majeure has been withdrawn from November 2025. The Honorable Prime Minister inaugurated the Assam Bio Ethanol Plant, a joint venture of our material subsidiary, NRL, in Golaghat District of Assam on September 14th, 2025.
This is India's first 2G bioethanol plant that uses bamboo as its feedstock. A 200 TPD formalin plant is commissioned in Boitamari in Bongaigaon by Assam Petrochemicals, our joint venture company in the northeast. A brief financial highlight of our company during Q2 of FY 2026 and half-year FY 2026: Here, the average crude oil price realization during Q2 was $68.19 per bbl versus $79.33 per bbl in the previous quarter of the previous year. In FY 2026 half-year, the crude oil price realization was $67.22 per bbl versus $82.09 per bbl. There is a decrease of 18.11% in the crude oil price realization. This was the major impact on our revenue. Because of the reduction in crude oil price by 18%, our revenue has gone down nearly about 44% as compared to the previous year. The natural gas price is almost steady as compared to the previous year.
It was $6.78 per MMBtu versus $6.70 per MMBtu. Gas was performed almost in line with the previous year. The price of crude oil has been regulated by the benchmark aligned by the Government of India during the half-year. The standalone revenue for Q2 FY 2026 was INR 5,456 crore, which has grown on quarter-to-quarter around 9%, which is mainly due to quarter-to-quarter around 9%. In FY 2026, it was INR 10,469 crore. Because of the reduction in revenue and well write-offs, our EBITDA margin has also gone down to 34% as compared to 47% in the previous quarter. The PAT for Q2 FY 2026 was INR 1,044 crore, reflecting 28.8% growth on quarter-to-quarter. For half-year, the profit stood at INR 1,857 crore as compared to INR 3,300 crore in the previous year, which is primarily because of lower price realization and higher provisioning of our E&P activities.
Because of lower profit, the EPS has also come down to around $6.42 per share. However, it is reflecting 28% growth on quarter-to-quarter. A brief performance on our material subsidiary, NRL. Our material subsidiary, NRL, the revenue of our material subsidiary, NRL, during this quarter was INR 6,442 crore, which is up by around 2.5% on quarter-to-quarter and almost 24% on year-to-year basis. The refinery achieved a capacity utilization of 100% +, and the distillate yield stood at 86% for Q2 of FY 2026. The gross refinery margin was $10.56 per bbl for Q2 FY 2026, and up by 110% from the previous quarter and $7.73 per bbl for FY 2026 for the half-year. The EBITDA was INR 989 crore for the quarter, with PAT landing to INR 725 crore. For FY 2026, HY EBITDA was INR 1,774 crore, and PAT was INR 1,213 crore.
A brief consolidated view of our company: On the consolidated basis, Oil India reported a turnover of INR 9,175 crore and PAT of INR 1,643 crore for Q2 FY 2026. We are pleased to inform you that the board has declared a dividend, and the dividend amount is INR 3.50 per share during this quarter. This is the first interim dividend declared by the company. Oil India has delivered a resilient and disciplined performance in the quarter, disciplined performance in the second quarter of FY 2026, supported by the operational stability and prudent financial execution. As we look ahead, our focus remains on the execution excellence, production growth, and long-term value creation across the portfolio. With that, I conclude my remarks. We now welcome your questions and look forward to an engaging discussion. Kindly limit your queries to two per participant to allow time for all. Thank you.
Thank you. We will now begin the question-and- answer session. Anyone who wishes to ask a question may press star and one on their touchstone 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 Gaurav Jain from ICICI Prudential Mutual Fund. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, first question on other expenses, if we will see, it has come out on the higher side, around INR 6,094 crore. This is way higher than the steady-state rendered that we have been seeing. If you can help us understand, what all are the one-off items here, sir?
That's a good question. I think CGM F&A can take this question.
Thank you, sir. During the quarter, as we have witnessed that there is a higher other expenses as compared to the previous year, there is only one minor reason of having higher expenses because during the first quarter, what we have done, we have provided for our two blocks. One is in Bangladesh, and one is for Gabon. Both these blocks we have already provided in our financial statement during the first quarter. It was amounting to around INR 700 crore. And one well which we have drilled during the quarter in our Andaman Basin in Vijayapuram 2, we have also provided for that in around INR 723 crore. This is the only reason which we are having higher other expenses during the quarter as compared to the previous year.
On this Bangladesh and Gabon write-off, how should we be thinking about it going forward because it is now appearing in quite a few quarters?
No, see, Gabon, as far as Gabon is concerned, we have thought of exiting from that area. So whatever expenses we have incurred, maybe little more expenses would arise based on the closure efforts that are going on. Apart from that, Bangladesh is also a closed chapter as far as the entire JV is concerned. We are in partnership with ONGC there. Both of us have decided to exit from that particular block. We do not anticipate any further major increase in expenditure in each of these two areas.
Okay, sir. On the employee expenses side also, this quarter is on the higher side, sir. Anything to call out there?
Sorry, could you come again, please?
Sir, employee expenses, if we will see at INR 526 crore, that is also higher than the rendered that we have been seeing a little on the higher side.
Yes. CGM F&A, you would like to answer?
For employee expenses, what we have seen, you have witnessed that there is around INR 600,000,000 of more expenses as compared to the previous half-year. During our pay revision, government has mandated that once your DA percentage will increase up to across 50%, then your gratuity amount will increase from INR 2,000,000 to INR 2,500,000. During this quarter, we have witnessed that our DA has crossed 50%. It is 51%. Around 29% during the quarter. As the gratuity liability of the company has already increased, we have carried out the actuarial evaluation considering the liability of the employee strength from INR 2,000,000 to INR 2,500,000. The actuarial deficit which has been accounted during this quarter is around INR 600,000,000. That is the only reason which the employee benefit has gone up as compared to the previous half-year.
Rest, normal marginal increase of our employee costs in relating to increase your normal salary and some medical benefits. The major amount which has increased in employee benefit is for the increase in actuarial evaluation of your gratuity expenses, which is INR 60 crore.
Got it, sir. That was helpful. Next, sir, on the production side at 1.65 million metric tons of oil equivalent, when we say that we are now back to Q2, there were some one-offs which impacted the production, and in Q3, we are now back to steady-state production. Will it be possible for us to guide as to how should we think about production into Q3, and what is the steady-state that we are back to now?
Okay, I think Director Operations can take this question. If you'd like to answer.
Yes, yes. Can you hear?
Yes, sir.
Yes, sir, you are audible.
Yes, yes, yes. There are a few factors actually that affected Q1 and Q2 both. Q1, mostly what happened is that we had a little bit extra loss due to LPG shutdown that was unwanted, and we never planned it. Because of that, we had some more loss in the first quarter. Also, in the second quarter, what happened is that I'd like to correct one line that the production impact dropped from 9 to 709, not 9720. We achieved 9720 metric tons per day at the end of the year also in the month of September. September 16, we achieved, September 15, we achieved 9722 metric tons per day, which Prorata goes to above 3.52, 3.53, something like that. What happened is that we were on a track where we were going to be around 10,000 metric tons per day this time.
What happened is that there are a few ethnic groups here, six ethnic groups, and one of the ethnic groups in the eastern part, because they want the ST status, because of that, they did an economic blockade, not against Oil India, but it is to the government. In the process, what happened is that we had to close down well because people cannot move for work inside and outside the facilities, oil facilities. Because of that, the production dropped to 8,100 metric tons per day. Now we are hovering; we have brought it back to 9,600, close to 9,600. We are, because what happens when the natural flow is disturbed in some of the wells, around 10, 11 wells, which did not come. We tried; we have tried with other wells. Also from new drilling, we have added to this amount.
The decline which we thought that it will create, it did not create that much. We are again on the right track. If no such blockade happens, we are expecting that we will be around 3.5+ this time. This is beyond our hand, actually. Did I answer it properly?
Yes, sir.
Yes, yes.
Yes, sir. Thank you for the elaborate answer, sir. That was helpful. Last question, sir, on DNPL capacity augmentation. We have mentioned in the presentation that 15th November is when we were expecting mechanical completion from 1 MMSCMD- 2.5 MMSCMD. What is the status on mechanical completion, sir? Is that achieved?
The DNPL pipeline, no?
Yes.
DNPL pipeline, I think.
Yeah, I think Trailukya will take this question. Trailukya needs to converse.
Yes. Trailukya, please. Trailukya, tell. Thank you so much. Good morning, everyone. Yes, the DNPL pipeline, mechanically, we have completed all the works. The next step would be to obtain PESO and PNGRB approvals and PNGRB authorization for the expanded capacity. Also, there is one critical step in terms of hooking it up with the existing pipeline. For that, we would need seven days of disruption in the pipeline. We are planning it as we proceed along with the PNGRB authorization.
Got it. We continue to expect that what we have mentioned by April 2026, all of this will be done. We continue to expect the same.
Absolutely. We will be up and running before April 26.
Thank you so much. Last question, if I may squeeze in, sir, last question on NRL. Sir, the throughput at 0.75 million metric ton was also on the lower side if we look at quarter on quarter. We operated at 100% utilization. Was there any maintenance shutdown, and if that is complete now?
MD NRL, if you would like to answer this question
Yes. See, we did not take any shutdown. As we are dependent on the crude supply from Oil India, and there was a very marginal dip on the availability. That also affected us. We are still more than 100%. This quarter, we have accumulated crude, and then we are getting some imported parcel as well. This quarter will be above 100% again, actually. There was no maintenance-related shutdown in Q2. In Q3, there was a small shutdown that we had to take on a safety-related thing in our primary unit, but we are out of that shutdown. Hopefully, in Q3 also, we will exceed 100%. We will maintain more than 100% for the entire year.
Thank you so much, sir. That was helpful. All the best, sir.
Thank you.
Thank you. The next question is from the line of Probal Sen from ICICI Securities. Please go ahead.
Yeah, thank you for the opportunity, sir. Very good morning. Firstly, on the Andaman write-off, just wanted to understand what were the results of the drilling campaign so far and what has led to the write-off of the well? Plus, how many more wells are we actually planning at this point of time in terms of our drilling campaign in the region?
That's a good question. We have with us ED Exploration. May I request ED to respond to this?
Very good morning to all of you. Andaman exploration has been quite a success for us in the sense that we had ventured into Andaman way back in the 1980s when we drilled seven or eight wells. Thereafter, after a long time, we had again been into offshore waters because this is the thing which is happening all around the world where big discoveries are being made. Right now, we have completed two wells. The number one well was Vijayapuram 1, and the second well was Vijayapuram 2, where we could see the occurrence of hydrocarbons, and the gas was even flared. Now what we are exactly doing is that we have moved to the third well, and we are currently drilling it.
Our plans are to appraise the Vijayapuram 2 occurrence of gas, for which we are planning supplementary 3D seismic, which is going to give us tighter control of the subsurface to plan future wells and define the new strategy for exploring and exploiting hydrocarbon resources from there. As far as the total number of wells goes, we have in line of sight 3 + 1 wells as of now, which includes the two wells which have already been drilled, the third well which is under drilling, and there is one well in the Andaman West. Depending upon the success in the appraisal, the exploration strategy will be charted out, and we will go ahead with the momentum of discovering these hydrocarbon resources, and the number of wells may increase in due course of time.
Just to understand, sir, thank you for the detailed answer. The write-off basically happens anyways as a matter of course, even if there is a reasonable, even if there has been a successful discovery of hydrocarbons. Is my understanding correct?
I think that's correct because write-off is independent of discovery or occurrence of hydrocarbons because write-off is basically an accounting treatment which is done based on the assessment of the situation there. It has got nothing to do with the discovery or the future prospects. I believe that answers your query.
Got it, sir. Any sort of timelines you can put on when we can get an estimate, even a contingent resource kind of a number from this region? Any assessment that your exploration team or seismic team has done at this point of time?
Yes, ED Exploration is a response.
As I told you, a very thorough appraisal of the occurrence of gas is required, irrespective of the well which is being drilled because each of the wells will be taken into account accordingly. We are planning supplementary 3D seismic, which gives you a better image and tighter control of the subsurface. Once that is available with us, which we are planning very shortly, I think within another three to four months, we will be carrying out the supplementary seismic in Andaman. This will give us those numbers which are much awaited by us as well.
Basically, sir, end of next financial year is when we can expect to hear more concrete updates as far as numbers are concerned.
Yes, yes.
Is that a fair way to look at it?
Yes, yes. More number of wells as we complete our seismic exploration, as we image, as we interpret, as we integrate them, we'll have numbers in our hand. Yeah.
Thank you, sir. The second question was with respect to the NRL numbers. Is it possible to share if there was any significant inventory component in the $10.6 GRMs for this quarter?
MD NRL, would you like to take that question?
Yeah, I would pass this question to Saket. I don't think there was any significant contribution of inventory, but let Saket answer this question.
Saket?
Over to you, Saket. If you are there.
MD sir, if Saket is not there, I'll just give a response.
Yeah, you have the numbers. You can share the numbers. Yeah.
Mr. Das, actually, this $10.56 has an impact of only $0.44. So this is very minimal.
Therefore, the inventory was not the factor here. Actually, we enjoyed a very good margin in the second quarter. The good news is that that kind of margin still continues in quarter three. Basically, the quarter two margins which were available have resulted in this GRM that you have seen.
Got it. So one final question.
It has to do with the spread.
Understood, sir. Understood. So one final question about the expansion. If you can kindly just once again refresh, what's the latest timeline for physical completion and commissioning of the expanded capacity for NRL?
We have already done around 95% in one of the plants called DSDT. That is ready for pre-commissioning. Actually, in fact, pre-commissioning is underway. The primary unit, CDU-VDU pre-commissioning is underway. We are hopeful that by end of December, we should be in a position to commission our primary unit. Gradually, other units will come. Since it is a very, very complex refinery, you will understand that, and you have seen other refineries. It takes a while, maybe two quarters to stabilize. You can look forward for some production in the Q3 or Q4 of, I mean, the Q2 of next year. Q2 of next year. Yes.
Understood, sir. Thank you very much. I'll come back for more questions and all the best.
Thank you.
Thank you.
Thank you. The next question is from the line of Kirtan Mehta from Baroda BNP Paribas Mutual Fund. Please go ahead.
Thank you, sir, for the opportunity. First question was about the exploration write-off fee. You mentioned that this is independent of the occurrence or discovery or future prospects. In what scenario do we capitalize the exploration well expenses?
Sir, this is CGM F&A who is answering. Sir, could you please repeat your question?
On the Andaman exploration well, we explained that we have written it off despite there has been a hydrocarbon discovery and we were planned to appraise. I just wanted to understand the accounting policy in terms of when do you actually capitalize the exploration expenses for well?
Sir, first of all, it's not a discovery. What we have basically informed the community is that we have observed traces of hydrocarbon in that particular area. For it to be declared a discovery, it needs further studies. Maybe ED Exploration can take it up to further explain. Once a discovery is established, then we certainly capitalize. However, before the discovery can be declared, lots of studies need to be carried out, which we are in the process of carrying out. ED Exploration, I think that answers your query, or you need further clarification?
Basically, even the third well expense that we are drilling, as well as the appraisal well, could also get capitalized because this will also get written off in that sense.
There is a possibility.
Is that a right understanding?
Yes. Yes. That's a right understanding.
Okay.
The expansion would depend on so many other factors. Everything begins with the traces of finding out hydrocarbons. That is the first step which we have basically just crossed.
Right. Could you also sort of highlight on the exploration well CapEx that has been planned for this year as well as next year, and how much of them is likely to be written off under this policy till we have actually a discovery?
See, write-off is not a policy-driven thing. Write-off is a decision which is taken based on the studies carried out, based on various other factors. Once a decision to write it off is taken, then only it is taken. For us to write off, we would be awaiting the results of various studies, both in-house and outside. That is how it happens. Now, CapEx, I request CGM F&A to please answer.
During the current year, we had budget about around INR 7,000 crore of our total CapEx. The total CapExX has been distributed between your ENP activity as well as your normal PPE. Out of that ENP activity, we have around INR 1,927 crore of budget of development, drilling around INR 1,700 crore, and our seismic is around INR 650 crore. If you add up all these three figures, it will be around 60% of our budgeted figure of INR 7,000 crore. Normal PPE, what we have budgeted for this current financial year is INR 2,284 crore. As of now, till date, what we have been able to achieve is around INR 5,561 crore has already been spent on account of our CapEx expenses. This INR 5,561 crore also includes a contribution towards equity to our material subsidiary of around INR 550 crore.
Our achievement to a large extent is around 70%-75% within this last seven months. We are expecting to be beyond our budgeted figure.
Just to add on to what CGM F&A has just said, our CapEx year -on- year has been rising over the last few years. If I can just quote the numbers for 2024-2025, against a budget of INR 6,880 crore, INR 6,880 crore, our spending has been INR 8,000 crore. Basically, going by our track record, we exceed the budget provision. The same is likely to happen this year too.
Sure, sir. In terms of the FY 2026 production, could you also sort of would there be any implication of software production on the FY 2026 targets?
Do you want to take this question?
Yeah. Can you repeat the question?
Kirtan sir, if you could repeat the question.
Sure, sir. I was asking, we had sort of a softer production in the Q2 than our own expectation. So will this have any implication on the FY 2026 target, or would we be able to compensate for it during the second half?
Definitely. Because if it would have been a small hiccup, we would not have been bothered. But this really impacted a little bit on our production because for around 2020 now, if you look at it, September 16 now, today is November. What today is it? It's November 17. Almost two months. If you out of these two months, almost one month, our production went below close to 9,000, which we were producing at 9,720. Now, we are bringing it up, but we are trying our level best because we have changed our strategies also. Now, I am here in field headquarters looking at both production and some other aspects also so that we can bring the production up. I am already here last some 20 days in the field headquarters only so that we can bring the production to that level.
Maybe we'll bring it to the level, but I don't say that we'll be able to go to the expected level. We are trying our level best to bring it to the level if it is not up to the expected level, but quite close to expected level. That is what our attempt is.
Thank you, sir.
Every day, we are doing optimization. Every day, we are trying to bring in new wells. Every day, I am going well by well with the teams so that I can bring the production to the level which we expected. Yes.
I think DO is cautiously optimistic there, but I'm quite hopeful that they will be able to kind of face the challenges, and we are slowly coming back to our earlier level of production. I hope that possibly we might be able to surpass the target that we have set for ourselves, but I'll otherwise go with DO, whatever he has said.
Sure, sir. Thank you. One last question from my side. We have been working to sort of have the international partner for our deep water exploration. Could you update the progress that we have made during the quarter on the side?
Yes. Reaching out.
Exploration, if you can just.
Yeah. Reaching out to international oil and gas majors has been at the core of our building momentum to getting into deep and ultra-deep offshore waters. In this context, let me tell you that we have a service agreement with Total Energies, which is an oil and gas major, which has an enormous amount of experience when it comes to deep and ultra-deep water exploration. Through this service level agreement, what we have done in the past is that we have leveraged their expertise in terms of well design, planning, and other engineering strategies so that our exploration activities come to fruition. We are further trying to even work upon with them, engage with them to expand our scope of services. I'm not going to declare it right now because we are still working on it over and over what we already have.
Apart from this, we have been reaching out to many other national and international oil and gas majors. One of them is Woodside Energy, where we are hopeful that we'll be able to start some sort of engagement with them so that we can partner together. More than the financial part, what our objective is, the technical knowledge base and expertise is what builds upon success in any exploration activity per se. This is our forte, and this is what we are looking for so that together we can synergize together and lead to some good discoveries in the offshore frontiers of Indian sedimentary basins. Outreach is at the core of Oil India's activities.
Thank you, sir, for these detailed answers.
Actually, just I would like to hello? Hello, dear sir. I would like to add to it, actually, that we are in advance discussion with Total Energies regarding this thing, especially whatever exploration is going to happen in terms of strategic traps. Like CGM and ED and Mr. Manal has told, this is these discussions are at a very high level, and it is going on. We are engaged with them. In all future exploration, especially in deep waters, they will be our kind of technical partners, at least. That is there. The next thing, I did not tell the number, actually. What we are expecting is that the number in terms of production will be around 3.5 to more than 3.5, actually. 3.5 we must cross, but we are asking for 3.55. That is the target.
Like you asked me for a number, so I said that 3.5-3.55 will be my target for the production.
Thank you, sir.
Thank you.
Thank you.
Thank you. The next question is from the line of [Saatagita] from DSP Asset Management Pvt. Ltd. Please go ahead.
Yeah. Hi. Morning time. Am I audible?
Yes, yes. You are.
Just coming back on the production target, last quarter, we had highlighted that we had 3.7 million ton of oil and 3.65 BCM of gas production target for this year. Subsequently, for FY 2027, 3.95 million ton for oil and 4.31 for gas. Just wanted these four numbers, updated numbers post the weak production that we had in Q2.
What exactly is your query? You want some numbers from us, or you want a clarification? Or what exactly are you looking for?
Sir, I want updated FY 2026 and FY 2027 production guidance for oil as well as gas.
The updated production outlook is like this: FY 2026, 3.776 million metric tons. However, going by the disruption that has happened in our producing area, we may have to scale it down to 3.55. We are still trying to achieve that target, but we are keeping our fingers crossed. As far as FY 2027 goes, our number would be 3.798. You can take it as 3.75 on a conservative side. FY 2028 would be 3.98, or you may take it as 4. If I'm a little more optimistic, then it can take it as 4. By FY 2028, we'd be touching 4. As far as gas is concerned, this year, we expect to achieve a production of 3.6 BCM, FY 2027, 3.8, and FY 2028, 4.6. That's the overall outlook for next three years.
Okay. Got it, sir. This was very helpful. Just one more thing. On FY 2027, you mentioned in gas, 3.8 BCM, right? That is significantly lower than the Q1 guidance that we had for gas for FY 2027. Considering DNPL to come up by April, which Trailukya mentioned, any other reason that we see that the weakness on the gas production outlook?
Would you like to take it? Just a minute.
Yes. In terms of gas production capacity, we are very well prepared to ramp up gas production to much higher levels. The numbers that you are reflected here are as per the ramp-up plan of the NRL new refinery. The NRL new refinery consumption will not start on day one. It would step by step increase in steps, and that is how the numbers are right at here.
Okay. Got it, sir. Thank you so much. This was very helpful.
Thank you. The next question is from the line of [Shabari ] from Emkay Global Financial. Please go ahead.
Yeah. I've got two questions. Firstly, on the production side. On the gas side, I think your numbers you mentioned is 3.6 BCM for FY 2026, but the first half number is something like 3.25 BCM. It doesn't add up because in order to do 3.6 average for the year, you'll have to do 4 BCM for the second half. Possibly, I think it could get adjusted, right? Probably this year, it could be more like 3.3-3.4, then we go up to 3.7-3.8. Is that the right understanding?
DO, would you like to take this question?
Yes, yes. You see, when there is a disruption, it affects both oil and gas, actually. Because of that, we will have a little bit less, which is 3.65 is our target for the gas.
That is full year or that is second half of this year?
Yes, yes.
Is that for the full year FY 2026 or second half of 26, 3.65?
3.6 is for the full year.
It's for the whole year.
That's for the full year.
We do not target, actually. Half year, we do not target, actually. We target for the whole year. We are trying to cope up, and we will be having more production with respect to last year. That is for sure. Because in gas, we can ramp up, actually. We can ramp up. Only thing is that gas, in case of gas, what happens is that the demand is the most important part. Now is the time for the tea gardens. They take less in this month. Even if I have the capacity, we cannot increase the gas production by that much. You understand my point, no? Because tea gardens, this is not the plucking time. This is the lean time for the tea gardens. Other industries, when they take, we are ready to give.
Hopefully, if NRL increases and if somehow we can bring it forward, this DNPL index, then maybe we can increase further. That is all.
And this.
I think we'll be having the same production or a little bit higher production with respect to the last year, not less.
Right. Second is DNPL. I think possibly that is the main pipeline for you to raise production. This pipeline, April 2026, it will get fully commissioned, and NRL volumes will also get expanded by that same time. Is that right? If not others, then at least we will supply to NRL around 2.5 MMSCMD. Is that the right understanding?
Yes.
Oh, okay, sir. Yeah. Thanks. Second question is on your CapEx. So you have mentioned that you have done INR 5,500 crore for H1, and INR 5,000 crore is basically the core CapEx if we remove the NRL rights subscription. But your cash flow CapEx is something like INR 1,600 crore-1,700 crore. Is this because of that right of getting adjusted in the P&L? Is that the adjustment why there is a mismatch between cash flow statement, CapEx, and what you have stated in your presentation?
No, no. This is not like that. See, INR 5,561 crore is our total CapEx utilization till date. If we run through the figures, this is the capital equipment which we have budgeted for INR 2,284 crore. We have already spent INR 1,280 crore. For exploration and development drilling, it was budgeted as around INR 3,500 crore-3,600 crore. Out of that, we have already spent INR 2,200 crore. For survey, which we have planned for INR 629 crore, we have already spent INR 572 crore. For our overseas, what we have thought of around INR 100 or 120 crore, we have already spent around INR 385 crore. For subsidiaries and joint ventures, which we planned around INR 350 crore in the beginning of the year, because of the add-on of the NRL investment, it is now standing at INR 1,117 crore.
The cash investment activity which has been shown in the cash flow, that may not be the exact figure with what we have already been achieved through the CapEx. Because it is a mix of investment as well as the financing activities also.
Got it. Regarding your Andaman, I think Bangladesh and Gabon, I think we are done with the write-offs, right? Or is there anything more pending?
See, what we want to make it clear is that based on our accounting policies, the principle which we follow as per the Ind AS 106, we only write off our well when it is fully out of question. Now, things that we have provided for our Gabon, we have provided for our Bangladesh asset also, in our books of accounts. The final write-off will only be taken when we fully decide that all the activities for the particular blocks have been closed, and we have to wind up from the place. We have provided in our books of accounts, but the final write-off may positively or indicatively take place by end of this year.
Right. And.
That also has been taken here in the first quarter itself.
Got it. The last question is this INR 700 crore. This is Vijayapuram 1, only 1, right? Not 2?
It's Vijayapuram 2, not Vijayapuram 1.
Okay. It's Vijayapuram 2, which has been completely provided for INR 720 crore. Vijayapuram 1 will be again tested now, and based on that, you will take a call. The third well and fourth well will come. Is that right?
Yes, yes. That EV exploration and development has already explained in detail what is the plan for the Vijayapuram 1 and 3. Subsequently, we come up.
INR 720 crore was for H1, or it was for just Q2?
See, what happened during H1, we have provided for two of our blocks. The major expenditure providing for our well assets is a normal course of our business. Whenever we see that a well has not been able to achieve what we have planned for, we automatically, based on our accounting principles, we provide it.
No, it is INR 360 crore for the two quarters, or it is just one time Q2 itself, INR 720 crore? Just INR 120?
No, it is INR 723 crore for this quarter itself.
Okay. This quarter itself, it was INR 723 crore. Okay, okay, sir. Thank you. Thank you. That's all. That's all from my side. Thanks.
Thank you. A reminder to all the participants that you may please restrict yourself to one question. The next question is from the line of [Pranitha] from Morgan Stanley. Please go ahead.
Good morning, sir. Thank you for this opportunity. I just wanted to understand, is there any planned shutdown for NRL for next three to six months, especially with all the mechanical completion that is planned?
MD sir?
Yes. Will you take up this question, please?
It was regarding what, actually? Just.
Yeah. Asking whether there is any plan for shutdown of the refinery?
No, no. There is no plan for shutdown. Shutdown will come in FY 2027 only.
Sir, when are you expecting the first crore to intake in the expanded capacity?
In December this year.
In the ramp-up?
In the primary unit, because we have to gradually commission the refinery one unit after the other. Fast crude intake is likely to happen in December itself.
Okay, okay, sir. The ramp-up after the second quarter will be how much are you targeting?
Yeah. Actually, ramp-up will be gradual. See, any very serious volume will come in the Q2 of next FY. That means starting from, say, June onwards, July onwards, you will see a rapid ramp-up of the capacity. Prior to that, we will have the commissioning activity going on. It's a very complex refinery that we are going to commission. That you must understand. Yeah.
Right. What is the net debt level right now in NRL?
Pardon? I couldn't get you.
Debt level?
Debt level? Trailukya, if you can give debt level, I think debt is to equity ratio. You can tell Trailukya, it is with you.
See, if you see that the leveraging ratio for NRL as of now for Q2, what we have, it is INR 17,799 crore of total debt of total debt has already been taken by NRL.
Okay, sir. Okay. Yeah. Thank you.
Thank you. The next question is from the line of Bineet Banka from Nomura Services. Please go ahead.
Hi sir. Thank you for the opportunity. Can you please update on the $300 million dividend, I think, which are stuck in Russia?
I'll pass on to my DGM Finance, Bineet, Mr. Majumdar.
Yes. You have rightly pointed out that some amount is lying in Russia due to the counter-sanction measure imposed by the Federation of Russia against the corporates which have been incorporated in unfriendly jurisdiction. The investment by Indian Consortium, Oil, IOCL, and BPRL has been routed through an entity in two entities in Singapore. One is Ranker India Pte Limited and one is TAS India Pte Limited. Since these two entities are incorporated in Singapore and unfriendly jurisdiction of Russia, funds are not allowed to be repatriated out of Russia at this point. We are evaluating various options, and we are hopeful that we will be able to give you some positive news in this respect by the early part of next financial year.
Sir, can you remind what is the annual run rate of dividends from Russia?
Annual? What's the question? Annual?
The annual run rate of dividend. What is the annual dividend that we get from Russia in US dollars?
If you look at that, out of our investment in TYNG, of the TAS India Pte Limited asset, more than 100%.
109%.
Around 109% has been paid back by this particular asset. That is within a period of eight years of investment.
Total dividend?
Yes. The total dividend paid back is $474 million U.S. dollar term. The investment was $436 million. This is basically the run rate you can derive out of that.
Ranker 283.
Regarding the other investment in Ranker Neft, out of the investment, $498 million has been paid back by this particular investment.
Okay. Thank you. Sir, second question is on the completion of this Paradeep Numaligarh crude pipeline. After the completion, are you also looking to import crude from Russia since you already have, I think, participating interest in those couple of assets?
Sir, MD, NRL?
Yes. Let me take this question. See, we have already identified more than 100 varieties of crude, and it actually depends upon which gives the best economics. We will import accordingly, provided there are no sanctions against a particular country. We have to abide by whatever rules are there at that point of time. Because we have Russian crude, and we may not be able to import if there is a sanction ongoing, actually. That would be my take at this point of time. At the time of import, we will take a call.
Okay. Sir.
Is there any kind of question? Yeah.
Yeah, sure. Yeah.
Just last question on the Andaman write-off is following up on that. If the discovery is established, will these well write-offs be reversed and capitalized?
No. See, as I have told before, the provisioning of the wells and write-off of the wells is two different activities, two different independent activities. We have provided for well number two for INR 723 crore. This well has been considered as no presence of hydrocarbon. Accordingly, this well can be considered as abandoned and has been provided in the books of the accounts. For other wells that are concerned, the progress of the drilling is still going on. Study is on. Until and unless we finally fix up that there is no presence of hydrocarbon, then.
There is occurrence of hydrocarbon.
Occurrence of hydrocarbon, then till then, we will not capitalize it. As of now, for well number two, we can conclude that we have provided, and this cannot be capitalized in the future. It has also been provided.
Okay. Just a minute, DF sir. I'd like to answer.
DF sir, we have left. Abhijit, I am here.
Okay. I'd like to answer this question because this is related to exploration and production. Even if you discover in an exploratory area, exploration well, you cannot capitalize in immediate context. You will have to ascertain the total volume. You will have to ascertain whether the economics works out or not. For that, you have to have a pressure well. You have to have a development well. The exploratory well in the first place is not monetized directly. This is one reason. Because you are not thinking about the completion, you are not thinking about the complete well setup, everything. That is why generally the exploration wells are retained off. That is the way it is done generally. That's to answer you because this question came twice. That's why I thought, did I?
Yes, sir.
Sir, just last question. On the NRL refinery, once the expansion is complete, what is the maximum gas volume that will be taken in? Because I think there will be some priority sector commitment as well. I think current run rate is around 0.5 MMSCMD, if I'm not wrong. What is the maximum you can take it up to?
The current run rate in NRL refinery is around 0.921 MMSCMD, higher than 0.5. After full expansion and 100% capacity utilization, it will go up to 3 MMSCMD.
Okay, sir. Thank you. All the best.
Thank you. The next question is from the line of Bhavan [audio distortion] from Elara Securities. Please go ahead.
Yes, sir. Hello. Yeah. Yes, sir. Thanks for taking my question. I have some technical questions related to the Andaman discovery. Earlier news says that the gross feed pay, I mean, the hydrocarbon where you find is between, I think, 12 to 20 to 50 m. It is like 100 ft pay. Based on your understanding, what is the, I think, the minimum threshold of the gross feed pay that gives you confidence that, yeah, it is a discovery? That is my first question, sir. Second thing is that when you try to drill the two more wells, appraisal wells, I think looks like based on the first discovery. How far in the distance you are thinking to drill? I mean, that gives some idea about the area of the discovery.
I'm coming to your first question, okay? When you said that we are talking about asserting the volume. See, this is an exploratory well. Number one, we should understand that this is a pure exploratory, exploratory well in the area. Number one. What we have established is the occurrence of gas. This is number two. Number three, as I told earlier, is that we are trying to conduct a supplementary feeding seismic in order to have tighter control of the subsurface in asserting the extent, the lateral extent of the potent sand bodies where hydrocarbons could be trapped. This will come only as our Director of Operations also explained that this is the exploratory phase. This will be followed by an appraisal phase, followed by a development phase thereafter.
What happens essentially during an exploration phase, moreover in the case of offshore, is that you do not monetize the discovery from the first well itself because you take up an exploration well with the minimum amount of infrastructure to establish it. There is a high cost of a well that goes into exploration if you build upon a development facility for it, and it is not even prudent to do it in that manner. This question should be knocked off this way. Number two, you were telling me that you are drilling an appraisal well, the next well that we are talking about, third well. It is not an exploration, it is not an appraisal well. It is a pure exploratory well, the third well that we are drilling right now. What we will essentially do is we'll drill this well.
If we establish hydrocarbons over there, it will also go through the appraisal phase. Each and every occurrence of hydrocarbon or establishment of hydrocarbon goes through an appraisal phase necessary where you conduct much more geoscientific analysis through seismic data acquisition, processing, interpretation, integration of the data that you acquired through these wells, and then make it to the process of discovery. That is when you ascertain the volumes and decide upon your appraisal and field development program. Thank you.
Yeah. Sir, it's a deep water discovery, I think. It's, I think, around 300 m deep in the water. Do we have the, so in case of the gas, do we have the, or do you know the capabilities available to get the gas? Because I recall earlier the ONGC has the problem to get the UD1 discovery because it's an ultra-deep water gas discovery. Is there any risk for managing the gas, I mean, to take out, to sell?
First of all, let me correct you that these are neither deep nor ultra-deep water discoveries. What. Yes, sir.
Actually, I'd like to correct it that this is not deep water, actually.
Okay.
Yes. This is not deep water. This belongs to still to shallow water, you can say.
Okay.
Let me complete it just for the sake of clarity because Andaman is coming time and again. I'm pleased to answer Andaman because it has been a milestone for Oil India Limited in terms of establishing the occurrence of hydrocarbons over the last three decades. It has been a real achievement this way. We are definitely getting motivated by the number of questions being asked. This is not deep and ultra-deep waters. It is shallow waters. The water bathymetry is 300 m. The definition of shallow, deep, ultra-deep, it follows with water bathymetry, not with the column that you have drilled, say, 2,620 m that we are talking about. Thank you.
Okay. Okay. Sir. Sir, my final question is, what is typically the rig rate that is being charged here? I mean, the rigs that you are hiring for this drilling of this Andaman block?
I think the ODR rate is around, you were talking about the daily operational rate?
Yes. Yes. Yes. Because rig cost is typically higher on the board week on the seaside.
I think it is around INR 20,000,000 ODR.
Okay. Okay. Sir. Okay. That's from my end. Yeah. Thanks.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of the question and answer session. I now hand the conference over to Mr. Vardharajan from Antique Stock Broking Limited for closing comments.
Mr. Majumdar, there are a few more in the question queue. Please take it up with the management or with us subsequently based on your convenience. Request the management to do their closing remarks, please.
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Thank you, sir. I wish to thank all the participants and the management for giving us this opportunity. Have a nice day.
Thank you. Thank you.
Thank you so much, everyone.
On behalf of Oil India Limited and Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.