Good morning, everyone. This is Purva, the moderator of this call. Thank you for standing by, and welcome to first quarter FY 2022 earnings conference call of ONGC Limited. Today, we have with us Mr. Subhash Kumar, CMD, ONGC, and Mr. Pankaj Kumar, Director Offshore. Instructions for Q&A session will be followed soon. I would like to now hand over the proceedings to Mr. Subhash Kumar, CMD, ONGC. Over to you, sir.
Good morning, everybody. I am Subhash Kumar, CMD, ONGC. On behalf of ONGC, I welcome you all in this ONGC earnings call for quarter 2 and H1 FY 2022. Thank you all for joining us on the call. I'm joined here by my colleagues, Mr. Pankaj Kumar, Director Offshore, Mr. Vivek Chandrakant Tongaonkar, CFO, Mr. Anupam Agrawal, Chief Corporate Finance, Mr. Vinod Hallan, CFO, ONGC Videsh, is unable to attend, Mr. Rajarshi Gupta, Chief Corporate Planning and Strategy, Mr. Rajeev Kumar, Chief Corporate Accounts and Financial Reporting, actually who puts in all the efforts, whose group puts in all the efforts to deliver whatever we are discussing today, Mr. Atul Chaturvedi, Chief Commercial and Treasury, Mr. Sanjay Bharti, again, from Corporate Accounts, Mr. Nirmal Kumar, my colleague from ONGC Videsh, Mr.
Chandrashekhar from ONGC Videsh Limited and Mr. Prakash Joshi from Investor Relations. Mr. D.K. Agrawal from Director Finance office is also there. ONGC has compiled its financial results for the quarter and half year ended 30 September 2021, which have been reviewed by the statutory auditors. The financial results have already been released yesterday through a press note and sent to the stock exchanges. These have also been sent to analysts who are there on our mailing list. Here's a brief synopsis of the results.
The company has earned a net profit, that is profit after tax, of INR 18,348 crore during the second quarter of FY 2022, as against INR 2,758 crore restated during the second quarter of FY 2021, an increase of INR 15,590, which in terms of percentage translates to 565%. Profit after tax for H1 FY 2022 has increased by INR 19,428. That's again an increase of 597% from the restated profit after tax of INR 3,254 crore in H1 of previous fiscal to INR 22,682 crore in H1 of this fiscal.
The increase in net profit during the current quarter and H1 2022 is on account of higher sales revenue, mainly due to higher crude and gas price realizations, higher other income, that is dividend, and opting for lower tax regime under Section 115BAA of Income Tax Act, 1961, which have been partly offset due to lower natural gas prices. The sales revenue for Q2 FY 2022 has increased by INR 7,416 crore. That's an increase of 44% and is at INR 24,262 crore as against INR 16,846 crore in the corresponding quarter of the previous year.
The sales revenue in the current quarter has increased mainly on account of higher sales revenue from crude oil by INR 7,644 crore and value-added products by INR 1,031 crore, which is partly offset by lower sales revenue from natural gas by INR 665 crore, and increase in Government of India share of profit petroleum by INR 594 crore, mainly in RG 190 B1 by INR 484 crore. Similarly, sales revenue in H1 FY 2022 has also increased by INR 17,437 crore. In percentage terms, this translates to around 59% from a figure of 29,781 crore in H1 of previous fiscal to 47,218 crore in H1 of FY 2022.
The sales revenue in H1 FY 2022 has increased mainly on account of increased sales revenue from crude oil by INR 17,656 crore, increased sales revenue from value-added products by INR 2,295 crore, which is partly offset by lower sales revenue from natural gas by INR 1,291 crore, and increase in GOI share of profit petroleum by INR 1,223 crore, mainly in RG 191 and Rawa by INR 975 crore and INR 143 crore respectively. The billing net of VAT and CST for crude during the second quarter of current fiscal was at $69.36 per barrel, as against $41.38 per barrel in the same period of last fiscal.
That's an increase of $27.98, and in percentage terms, it translates to 68%. The exchange rate of rupee versus dollar stood at 74.09 rupees vis-à-vis 74.39 in second quarter of FY 2021. There has been some variation, but minimal one. Thus, realization of crude in the rupee terms stood at INR 5,139 per barrel in Q2 of FY 2022, vis-à-vis INR 3,078 per barrel in Q2 of FY 2021, which amounted to an increase of INR 2,061 per barrel, and in percentage terms, this translates to roughly the same as in dollar terms, around 67%.
Similarly, gross billing for crude during the first half of the current fiscal was at $67.45 per barrel as against $35.05 per barrel in the same period of last year. That's an increase of $32.4 per barrel, which in percentage terms is around 92.4%. The exchange rate of rupee versus dollar stood at INR 73.92 versus 75.07 in the first half of FY 2021. Thus, realization for crude in rupee terms stood at INR 4,986 per barrel in H1 of this fiscal, versus INR 2,631 per barrel in H1 of previous fiscal, which amounted to an increase of around 89.5% in INR terms.
During Q2 FY 2022, the statutory levies stood at INR 6,117 crore as compared to INR 3,936 crore in Q2 of FY 2021. That's an increase of INR 2,181 crore, and this in percentage terms is 55.4%. The increase in royalty on crude, thus, of INR 973 crore and cess by INR 1,236 crore is mainly attributable to increase in average selling price of crude from INR 22,988 per MT in Q2 of previous fiscal to INR 38,608 per MT in Q2 of this fiscal.
Similarly, there has been an increase in royalty on natural gas by INR 32 crore on account of decrease in average selling price of natural gas from INR 7,273 per thousand cubic meter in Q2 of previous fiscal to INR 6,225 per thousand cubic meter in Q2 of this fiscal. Similarly, statutory levies have also increased by INR 5,169 crore. That's an increase of 75% from INR 6,917 crore in H1 of previous fiscal to INR 12,086 crore in H1 of this fiscal.
The increase in royalty on crude by INR 2459 crore and cess by INR 2856 crore is mainly attributable to increase in average selling price of crude oil from INR 19,650 per MT in H1 of FY 2021 to INR 37,419 per MT in H1 of FY 2022. Similarly, there has been decrease in royalty on natural gas by INR 67 crore on account of decrease in price of natural gas from INR 7255 per thousand cubic meter in H1 of FY 2021 to INR 6095 per thousand cubic meter in H1 of FY 2022. The operating expenditure has increased by INR 497 crore.
That's an increase of 11% from INR 4,528 crore in Q2 of FY 2021 to INR 5,025 crore in Q2 of FY 2022. The increase in Q2 FY 2022 is mainly on account of increase in consumption of material. That is INR 248 crore, mainly at the Hazira plant, by INR 214 crore on account of increase in prices of spot LNG. Water injection by INR 64 crore, mainly at Mumbai offshore, due to increase in activities. Repair and maintenance, INR 43 crore. Transport of products by INR 61 crore at, again, at Mumbai offshore, and staff expenditure by INR 82 crore.
This increase in operating expenditure has been partly offset by decrease in other expenses by INR 98 crore, mainly on booking of fair value of loss on investment in OPaL by INR 95 crore in Q2 of previous fiscal. Similarly, the operating expenditure in H1 FY 2022 has also increased by INR 1,138 crore. That's an increase of 13% from INR 8,685 crore in H1 of previous fiscal to INR 9,823 crore in H1 of this fiscal. The increase is mainly on account of increase in consumption of material, which is the largest portion of it, and attributable to mainly at the Hazira plant by INR 561 crore out of total increase of INR 582 crore in consumption of materials.
On account of increase in prices of spot LNG, water injection INR 75 crore, mainly in Western Onshore and Offshore due to increase in activities, contractual payment INR 119 crore and staff expenditure by 313 crore. This increase in operating expenditure has been partly offset by decrease in other production expenses by 89 crore, mainly at Mumbai Offshore. There's a decrease of INR 748 crore, that's around 52%, in exploration costs, written-off survey and unsuccessful well costs in Q2 of FY 2022. That's 1,146 crore in Q2 of FY 2021 has come down to 698 in Q2 of FY 2022. Similarly, during H1 of FY 2022, there's also a decrease in exploration cost, written-off survey and unsuccessful well costs by INR 723 crore.
That's a decrease of 28.1% from INR 2,573 crore in H1 of FY 2021 to INR 1,850 crore in H1 of this fiscal. The finance cost has increased marginally by INR 142 crore from 437 to 579 crore in Q2 of FY 2022. Similarly, finance cost has increased by 150 crore from 1,048 in H1 of previous fiscal to 1,199 in H1 of FY 2022. This increase is mainly on account of increase in interest payable due to increase in outstanding NCDs. DD&I cost for Q2 of this fiscal stood at INR 3,943 crore as against 3,679 crore in Q2 of previous fiscal.
This is an increase of INR 264 crore, and in percentage terms, this works out to 7.2%. The increase in Q2 FY 2022 is mainly attributable to increase in depreciation by INR 69 crore, mainly at Mumbai Offshore, by INR 49 crore due to increase in number of hired IMR vessels and RJ 91 by INR 24 crore, and impairment reversal of INR 213 crore during Q2 FY 2021 on account of write-off of few wells in Frontier Basin during Q2 of FY 2021. Similarly, there is also an increase of INR 606 crore, that's in percentage term, 8.1% in DD&I cost during H1 of FY 2022 from 7,502 in the H1 of previous fiscal to 8,108 in H1 of this fiscal.
The increase in H1 FY 2022 is mainly attributable to increase in depletion by INR 151 crore, mainly at Assam Asset due to downward revision of PDR, that's proved developed reserves. Depreciation by INR 124 crore, mainly at Mumbai Offshore, and INR 124 crore again due to increase in number of hired IMR vessels. Impairment by INR 331 crore. INR 130 crore impairment charged during H1 FY 2022, mainly at Nagayalanka block, which is INR 72 crore. There's an increase in exchange loss by INR 417 crore from an exchange gain of INR 412 crore in Q2 of FY 2021 to exchange loss of INR 5 crore in Q2 of FY 2022. Similarly, there's an increase in exchange loss by INR 508 crore from an exchange gain of INR 418 crore in Q1.
H1 of FY 2021 to exchange loss of INR 90 crore in H1 of FY 2022. During the quarter, company has decided to opt for lower tax regime under Section 115BAA of Income Tax Act, 1961 with effect from FY 2021. Accordingly, the company has recognized the provision for tax expenses and remeasured its net deferred tax liabilities. The net impact due to availing of option has resulted in decrease in deferred tax by INR 8,541 crore and decrease in current tax by INR 1,304 crore. The company, at consolidated level, has earned a net profit of, that is profit after tax of INR 18,749 crore during the second quarter of FY 2022, as against INR 5,675 crore during second quarter of FY 2021.
That's an increase of INR 13,074 crore. In percentage terms, this works out to around 230% or so. The increase can be mainly attributable to ONGC, our subsidiary OVL, and JV OPaL. Similarly, the company at consolidated level has earned net profit after tax of INR 25,596 crore during H1 of this fiscal, as against INR 6,760 crore during H1 of FY 2021. An increase of INR 18,836 crore, and in percentage terms, this is around 279%. The increase can be mainly attributable to ONGC, our subsidiary OVL, and again, there's some contribution by JV OPaL. Well, friends, with this I finish my briefing of the second quarter results of financial year 2021-22.
We'll be very happy to take questions from you. We would request you to restrict your queries on financial results only. Thank you. Thank you very much. Look forward to hearing from you.
Thank you, sir. With this, we will open the floor for Q&A interactive session. To ask a question, you need to press zero and then one on your telephone keypad. I'll repeat. To ask a question, you need to press zero and then one. First question of the day we have from Abhishek Sabnis from InCred Capital. Your line is unmuted. Please go ahead.
Yeah, this is Abhishek Sabnis. So, my question first relates to gas pricing. Sir, the current formula for gas pricing that we have for the APM gas, if you look at the formula and if you look at the global prices that are prevailing in the current sort of calendar year, it is very obvious there is gonna be a massive spurt, when the next change is due, which is from first of April. My question is that, are you aware of any move by the government, okay, which will result in that sort of massive price hike in gas not happening, i.e., is the government considering any change in formula, any cap or stuff like that? If you could comment on that, please.
Sabnis, is that the only question you are having for the day?
The second question, sir, relates to if you can give out any update on the production on the KG Block, specifically the timing on when you will put out a tender for the fresh gas supply. That's it. These are the two questions, sir.
Okay. I think let me take the first question now and second probably will reemerge with the second variants over the discussion. That will be addressed in greater detail later. As far as you know gas pricing is concerned and gas pricing formula is concerned, that's has been subject of deliberation and discussions and debates in you know at different forum. Right now we have a formula which is prevailing, and there is no reason to believe. I mean, we got ultra-low prices also at certain point in time, which is this quarter actually happened to be the of this six months, previous six months, which we just completed, were the lowest ever.
Neither did we have heard of anything, nor we believe that there is going to be any tinkering with it. As far as ONGC is concerned, our long-term view and, vision remains that, at the end of the day, there has to be a free pricing, as far as gas is concerned. One is what we wish to look at. Another is, as far as formula is concerned, definitely, we are not aware of anything, and we don't think there will be anything to artificially lower the prices in case, the prices emerging out of a formula are lower than that. Unless that happens to probably align it with the prevailing market prices. That's how I look at it. I stay short. My precise answer would be today we have a formula.
We have no information or reason to believe that it will be in any way tinkered with to bring the prices lower.
Thank you, sir.
Okay.
Next is Bharat Parekh from CLSA India . Your line is unmuted.
Am I audible, sir?
Yes, you are audible.
Yeah. Thank you. My question is once again about this APM gas price increase. You are seeing a significant increase from first of April. Does it change any kind of economics in terms of the existing reserves or any other reserves can be put to additional production?
We are not getting you very clearly. If you can be a little louder and maybe a bit slower.
Yeah. With the increase in APM gas prices, do you expect, like, you know, production to rise, or you are going to put any additional resources to increase productions?
I think, as far as production is concerned, we have projects coming up and I think we will be discussing about our major project KG 98Y2 later. Unfortunately, there is delay in production from that project, and we are trying to reassess the timelines. Unfortunately, in some of the countries where from the the major pieces of equipment for the project are being sourced are still not out of COVID fully, and supply chains remain disrupted. We have tried to ensure that our people and teams are able to fly in. We have been partly successful and believe that in coming days our teams will be in their respective places. As of date, to be able to give definitive timeline, it is very difficult.
I'm referring more to the Asian priced gas. Is there any scope for you to push production at KG during the half year? The company will be-
On gas front, let me be a little clearer. Unfortunately, Tauktae has affected our operations significantly. In fact, one would believe that it has affected the offshore, which is a very obvious thing. It has, in fact, also affected some of our onshore projects. I think we do anticipate certain underachievement in as far as gas is concerned this year.
Fair enough, sir. Secondly, looking at OVL OpEx over the last 4-5 quarters, we have seen a significant increase. Is it only a question of the new acquisitions going on production? Is that the only factor, or is there any other such factors?
The increase in OpEx at OVL level is because of the certain standby costs paid at Mozambique. As you may be aware that in Mozambique right now, there is a force majeure condition going on. Consequently, instead of capitalizing those costs, which are the standby charges, they have been expensed. That is the reason for the increase in OpEx.
Sure. Thanks a lot, sir. I'll come back in the queue.
Next is Mayank Maheshwari from Morgan Stanley. Your line is unmuted.
Thank you for the call, sir. Two questions from my end. First of all, I think you were earlier referring to this in terms of production delays. Can you just give a bit more granular outlook in terms of when you expect to go back to pre-COVID levels of production, especially on oil across OVL and ONGC domestic?
Okay. I think, as far as, let me take both of them. We have, on oil front, we have got lesser than anticipated production at WO-16. Where there is a delay in mobilization of MOPU Sagar Samrat, which was anticipated to be commissioned by now, but is getting delayed because of some of the operational problems as well as because of COVID. There is less than anticipated production from Cluster Eight fields due to delay in, you know, installation of wellhead platforms. Again, part of which at least predominantly due to COVID impact. Tauktae has definitely affected our offshore and onshore production also. I mean, normally one would remember that it affected the offshore only, but western onshore production also has been affected because of Tauktae.
Ratna and R series, you know, HTS package at R-13-A well we could not install in time. There was a delay. That has resulted in some production loss. There have been certain unplanned power shutdowns and electrical faults caused by heavy monsoons in some of the onshore assets which have resulted in overall production loss. This is the story on crude oil front. As far as natural gas is concerned, number one, there is a little bit of, you know, let's say, underperformance at the level of Vashishta and S-1 wells in eastern offshore, and that is due to certain reservoir and well issues. WS-16 cluster due to delay in again, Sagar Samrat, because oil and gas need to be produced together.
Our major impact this year or maybe next year also will be on account of delays being experienced in KG 98Y2 and our inability to precisely give the timelines by which we will be able to install and, you know, have the production from that. Loss in gas production due to Tauktae in Western Offshore is another impact. That's the major impact. Gas has been significantly affected by Tauktae. There is also an issue relating to offtake. If you really remember in the second wave, we had a lot of problem in offtake. In addition, at two specific assets, at Tripura and Rajahmundry, we continue to have or we had the problems relating to offtake at different points in time.
Dahej and Gandhar field is a case of less than anticipated production. Also there are natural decline in production in Mandapeta, Kaikalur, Puri, and the Mori fields in Rajahmundry and the Tapti-Daman Block. This is the detailed listing of what has resulted in this performance.
Thank you, sir, for this. I think this is pretty detailed. Like when you are now looking forward, sir, like how much of these issues that you kind of
No. Let me.
Uh-huh.
Probably it will be useful for all to have what we could end up being in terms of year-end numbers. If you really look at 2021 actuals was 22.53 as far as oil is concerned. Our anticipation for this year was 22.97. We will end up probably around 22 plus 2-3%, so around 2 percentage points. We will be close to the actuals of last year, maybe a shade lower than that. Definitely lower than BE 2021-22. That is the oil front. As far as gas, sorry, OVL is concerned, OVL had actuals 8.51 last year.
They had anticipated also 8.51, but they could end up being somewhere close to 8.31. On a between ONGC and OVL, there could be a hit of anything between 0.6-1 MMT. As far as gas is concerned, gas actual was 22.10, that's standalone. We had anticipated this year substantial jumps. We had anticipated to go to 25. We believe that we will be closer to the actuals of 2021 rather than being able to go beyond, and could be a percentage point lower than or 2 lower than the actuals of 2021 as far as this year is concerned. Now, on a OVL level, again, gas is getting hit.
It was 4.53, and we anticipate to be at around 4. Instead of actuals at a group level of 27.35, we anticipate to be around 3% lower at 26.5 or so. It will be definitely 3 BCM less than the budget. Next year, actually, we will be catching up. As far as oil is concerned, we hope to achieve 31.3-31.4, which is exactly equivalent to what BE we had for this year. However, as far as gas is concerned, we had a budget of 29.7 for this year. We would be close to 29 or so for the next year.
That's the story. Whatever was the BE for 2021-22, we intend to and hope to catch up by 2021-22.
Mm-hmm. Okay, sir. That's basically about a year of delay because of all these COVID issues and logistic issues and what you're kind of highlighting towards. Yeah.
Actually COVID issue, let me just deal with it. Actually, COVID issues we have faced due to both dimensions. One is, of course, disruption in supply chain, more of international supply chain than local. It is not that local supply chain was not affected. Secondly, in fact, on gas front especially, we were handicapped by the offtake also. That has been the problem. Because despite the fact that prices were low or ultra-low, part of the matter is certain industries and consumers simply stopped operating during these periods. Obviously, to whom to sell the gas, even if it is lowly priced.
Okay. Sir, I think just an extension to this question was, like, if you can give us certain numbers on how much are you producing of 98-2, and when you're kind of giving us the guidance for 2020, fiscal 2023, what are the assumptions on 98-2 that you're building in?
I think, as far as 98 by 2 is concerned, as I have told, we continue to be affected by the supply chain. In fact, over the last month or so, we had very intense deliberations at different levels. With all the key stakeholders, we have tried to assess with a very active interaction with the Indian embassies abroad to see wherever the you know the operations can be resumed. Because operations in Singapore and let's say Malaysia stay affected, and affected very badly. Projects are not moving.
As far as our current production from KG 98/2 cluster is concerned, it's close to around 0.65 MMSCMD from 2 wells, and production is likely to be ramped up to more than 1 MMSCMD. Additional production of 1.75 MMSCMD is expected from third well by December 2021. While, as far as rest of components are concerned, I'm not in a position to give the definitive dates today, and that's something which is being frozen. Luckily, the movement restrictions seem to be getting eased. They are not lifted entirely. We were trying to depute our people and fly in our own teams also to different locations where the works are going on.
We are in process of obtaining approvals, but unfortunately, physically, only a few people have been able to fly in today. Only a few visas are available. Especially for Malaysia and Singapore, we are working very closely with the embassies. To give definitive timelines, which have every possibility of getting changed either way, it will not be appropriate on my part at this stage.
Sure. Sir, my second question was more related to the entire point on decarbonization, which the PM talked about in COP26. I just wanted to get a sense of how ONGC at the group level is looking at the decarbonization efforts, and is there something more concrete you can give us compared to the last call?
As far as, you know, ESP concerns on the whole are concerned, the company is very mindful. In fact, if you really look at the, you know, our carbon footprint, we have done tremendous on the front of reducing it. Actually, you know, because of not being spoiled for plenty, our compulsions to avoid gas flaring were both from economic considerations as well as because of our concerns for the environment. Because ONGC was pioneer in terms of, you know, coming up with a gas flaring reduction project as far as Mumbai High is concerned. Which was both actually from economic consideration as well as to reduce our carbon footprint.
As far as you know our there has been 12% cut in emissions densities since 2015-16. That's what we have done. We are making substantial initiatives we have taken up in terms of Global Methane Initiative. This is an action-oriented initiative from United States Environmental Protection Agency, and we are working very closely with that. We have introduced dynamic gas blending technology in large diesel engines. We have introduced microturbine technology for power generation at remote locations of ONGC. We are working very closely with IOCL for carbon capture utilization storage for CO2 sequestration. Now, going beyond this, we are also mindful of emerging reporting requirements for integrated reporting. Both to address the issue relating to the whole set of issues.
Actually, it is not only carbon. Carbon is only one part of it. We are addressing the whole issue in an organized manner. We are in process of appointing a consultant and are geared to address the issues both from reporting and improvement perspective. A couple of internal workshops have already been held, and the consultants are in place, and the team is working on the whole set of issues around it, not necessarily only the carbon intensity.
Got it, sir. Thank you.
Next is Sabri Hazarika from Emkay Global. Your line is unmuted.
Yeah, good morning, sir. Congratulations on those numbers. I have two questions. Firstly, can you give a breakup of the dividend income in Q2?
Yeah, if you can give me a minute. We had total dividend income of INR 2,677 crore, out of which, INR 201 is from IOC, INR 39 from OTPC, INR 600 from OPaL, INR 1,771 from HPCL, and Petronet LNG, INR 66 crore.
Okay. Nothing from Bangkok or Russia for this quarter?
Nothing from?
From Russia. Anything from Russia?
Russia. Imperial Energy is subsidiary of ONGC Videsh. They receive it and pass it on to us.
Oh, okay. Sorry about that. Second question is, just any comment on this news flow coming around regarding Mumbai High. Sometime back also.
This actually is.
Mumbai High.
Huh?
Mumbai High 70%.
That's not a question relating to accounts.
Sorry about that.
I don't think it's a question at all. Let me also add in the same spirit, I don't think it's a question at all. Okay? I think you heard it clear and loud and clear.
Got it. Sorry about that.
It's an out of syllabus question.
Right, sir.
Yeah. Anything more?
No, that's all. Thank you so much.
Okay. Please have a nice day. In fact, I actually am mindful that invariably we end up disturbing all of you on Saturday or Sunday. We have been guilty of that. Unfortunately, we are a large group where, you know, quite a few things need to happen before, you know, our team gets to work on the numbers. That has been always a constraint.
Next we have Pinakin Parekh from JP Morgan. Your line is unmuted.
Thank you, sir. Sir, I have two questions. My first question relates to OVL. Now quarter on quarter, EBITDA is broadly flat even though prices are higher. So is there the entire cost surge because of Mozambique, or are there some other factors? And going forward, would this cost become the new normal at OVL, or should it reverse? And my second question is, sir, if you assume that global gas prices don't change from here till December end, what kind of prices do you expect in the new reset in April 2021 versus the September versus the October reset of $2.79?
I think first question first. As far as OVL is concerned, I think OVL is doing very well as far as some of its key projects are concerned. Of course, Mozambique has been a setback, and we do anticipate, if you really look at the developments in that part of the world, again, we believe that outlook is improving and we'll soon have actually you know improvement on that front. As far as cost structure is concerned, obviously this particular fiscal it has got, or half year it has got affected from Mozambique, but I think that's not going to be the factor. Cost could also look high at OVL front because production at some of their international projects got constrained due to CapEx and OpEx plus restrictions.
I don't believe it's a trend which you can factor in for all times to come. Periodically you will see some, one or the other factor coming in, which could actually probably whatever is the natural behavior of cost, that you may find certain anomalies from that perspective. OVL today is also looking for more opportunities. OVL's outlook from that perspective are very good. Third thing, which I also would like to say, that OVL at the end of the day enters a project on a competitive terms. When you enter a project, it enters at a plus minus certain dollars to the prevailing price regime or prevailing long-term outlook. It's never. It does not have, in majority of the cases, advantage which one takes normally.
There are two regimes actually. You take early risk and you end up having a large discovery. Look at Vietnam, for example. We went at exploratory stage and had everything to our credit. In other situation, you go to a project like, which is mid-development or early development like Sakhalin. Sakhalin, we entered at a stage where risk return profile had improved a little bit, but still it, the commerciality had not been declared. But it has been an enormous hit. On the contrary, there could be a project which is under development or under production. Obviously, you will get to enter only at the price very near to the prevailing price or long term outlook. The risk profile is entirely different across these three sets of options, and also the return accordingly is high. The chances of failure are high.
Obviously if you are successful, you get to retain the large part of the pie. It's a kind of risk. OVL has taken very judicious decisions in the past to balance the considerations and take an optimum position in all acquisitions. Coming back to the cost, it is unlikely to be a new normal because Mozambique, I believe, will resume soon. It's too large an asset to you know, stay in the conditions like the one prevailing today. As and when that happens, you will see improvement. As far as global gas prices are concerned, obviously, I'll leave it for you people to guess because you know, your number crunching is much better than ours. We can so.
There are few months which also are yet to expire before the final calculation can be made. I'm sure your laptop in front of you will be giving a number which is significantly higher than what we are getting from first October. It's a question of factor, how many times higher? That's the only question.
Sure, sir. Thank you very much.
Yeah. Okay. Okay.
Next is Soumya from Spark Capital. Your line is unmuted.
Yeah, thanks for the opportunity, sir. My first question is with respect to the debt. At the consolidated level, can you give a breakup of the debt? I mean, what is the debt between subsidiaries?
Breakup of?
Debt at concerned level.
Our consolidated debt on 30 September is INR 109,000 crore as opposed to INR 119,000 crore on 31 March. There's a reduction of around 10,000 crore plus. Reduction is largely at ONGC, which has come down from INR 50,023 to INR 7,897. MRPL has come down by around INR 1,900 crore to INR 37,685. Sorry, OVL. MRPL is practically at the same level as last time at INR 24,412, and HPCL is again INR 1,600 crore less at INR 39,010.
Thank you, sir. Thank you. Next question is with respect to your CapEx plans. Is there any rethinking about the CapEx plans because of this, you know, production outlook position? And what is your plans for the FCF usage, given that, you know, the commodity prices are pretty favorable, and if your outlook is expected to improve-
Plans for?
-after the-
the plans for?
The free cash flow usage, so.
Cash flow. Okay. I think a couple of things. One is that, as far as our, you know, level of activities for next year are more or less frozen, so they stay at current levels. You'll see only a marginal. Just a minute. I think as far as CapEx is concerned, we are trying to ramp up activity, as you would have heard. We will, however, in terms of our expenditure, remain very close to what we have been doing each year. We would be in the range of around INR 29,000 crore-INR 32,000 crore. That's the likely CapEx, and it is unlikely to increase considerably even in the immediately following fiscal. Your second question was?
The cash flow.
I think as far as cash flows are concerned, we would have you know certain unfinished part of agenda at OPaL level also, as we have shared in the past, that we have the intention to infuse funds. We are awaiting certain approvals. We are a good dividend payer also. If we have improved you know ability to pay, we pay. That you would have seen along with the declaration for this, which I incidentally received no question. On an overall basis, the company and the management has a vision to grow in a truly integrated world-class company. Whatever it takes to make that happen will be done.
Thank you, sir. Just one follow-up there. The point you mentioned about OPaL infusion. What could be the rough quantum there?
Quantum could be, you know, not really large. It could be around INR 5,000- INR 6,000 crore.
5 to, sir?
INR 5,000 crores-INR 6,000 crores.
Got it, sir. This helps. Thank you. Thanks for that.
Sir, shall we go ahead and take one last question?
Yeah, yeah. Please. Last one.
The last question of the day we have from Vishnu Kumar from Spark Capital . Your line is unmuted. Please go ahead.
Thank you for the opportunity and good set of numbers. Sir, could you tell me now what is the status of the Iranian field under OVL? Hello?
Just a minute. There have been some positive developments. I'll request my colleague to give you specifics. Just a minute. You give me. Actually, now they are considering development of the project through a domestic. I mean, this is from the press also, you would have read, that they are now considering development through NIOC has signed an agreement with the domestic company, Petropars. As far as we are concerned, we have possibility of taking some stake. As far as development contract, et cetera, is concerned, we are in process of looking at it as and when will. It's a question of due diligence that is going on.
We believe that whatever, number one, we have spent in the past, we will definitely get to reimbursement for that. Beyond that, we would have some share. What are going to be the terms and conditions and specific exposure on account of that's something very early, too early to predict at this point.
How much we have invested in that for that field?
$95 million for 100% and our PI is 40%. 35%.
Okay. That's very helpful. Okay.
With this, I would like to now hand over the floor back to Mr. Subhash Kumar for his final remarks. Over to you, sir.
Thanks a lot to all, and sorry for bothering you on a Saturday again. I think I have told the reason for that. Invariably, it ends up being the case that we have to compile the accounts after getting from so many entities, and we end up choosing this day. Also, you know, it's a little difficult for us to take time off and talk to you people. Great talking to you. We value your participation and inputs in this call as well as when you follow up individually also.
Our Investor Relations team, just to reiterate, is, you know, ever ready and very anxious to receive your calls, and they will be happy to provide any additional information which you may require, which you might not have got opportunity to, you know, elicit at this moment. Thank you all very much.
Thank you so much, sir.
Special thanks to Harpreet, again, for you know, organizing all this. Thank you very much.
Thank you, sir. Thank you. My pleasure. I would like to thank all the investors to join the call. That does conclude our conference call for today. You may all disconnect now. Thank you. Have a pleasant day.