Here by my colleagues Mr. Anupam Agarwal, Chief Corporate Finance Mr. Rajiv Kumar, Chief Corporate Accounts and Financial Reporting Services Mr. Vinod Halland, CGM Finance Mr. Rajarishi Gupta from Corporate Planning and Strategy Mr.
Sanjay Bharti from Corporate Accounts Mr. Nirmal Kumar and Mr. Chandrasekhar from ONGC Videsh and Mr. Prakash Joshi from Investor Relations. ONGC has compiled its financial results for the quarter ended 31 December 2020, which have been reviewed by statute to the auditors.
The financial results have already been released on 13th February 21 through a press note and sent to stock exchanges. These have also been sent to the analysts who are there on our mailing list. Here is a brief synopsis of the results. The company has earned its net profit, that is profit after tax, of INR 1378 crores during the Q3 of FY 'twenty one as against INR 4226 crores during the Q3 of FY 2020. This is a decrease of INR 2 INR848.
And in percentage terms, this is roughly onethree, meaning thereby that this is a reduction of around twothree. Similarly, profit after tax for the 9 month period FY 2021 has also decreased by INR 11,791. This again is a reduction of 71% or so from the profit after tax of INR 16,543 crores in 9 months FY 'twenty to this year's 9 month figure of INR4752 crores. The decrease in net profit during the current quarter and 9 month period is mainly on account of lower sales revenue, lower crude price as well as gas realization and lower other income. The sales revenue for Q3 of FY 'twenty one has decreased by INR6645 crores.
That's a reduction of 28% at and it is at INR 16,970 INR7 crores as against INR23,622 crores in the corresponding quarter of the previous fiscal. The sales revenue in the current quarter has decreased mainly on account of lower sales revenue from crude oil by INR 3,992 crore natural gas revenue by INR 2,053 crore and lower sales revenue from value added products by INR705 crore. So if you really look at ONGC has suffered lower revenue because of the lower price realizations on all three fronts, crude oil, natural gas as well as value added products. There is a reduction in Government of India share of profit petroleum by INR 105 crores from INR515 crore in Q3 FY 'twenty to INR410 crores in Q3 of this fiscal. The decrease is mainly at RGO N90 by 1, block by INR87 crore and PMT JV by INR31 crore.
Similarly, sales revenue in 9 month period has also decreased by INR 27,703 crores. That's a reduction of 37 from INR74,461 crore in 9 months of previous fiscal to INR INR46758 IN 9 month period of current fiscal. The sales revenue in 9 months has been lower mainly on account of again, the reasons are very similar on account of decrease in sales revenue from crude oil by INR 19,316 crore natural gas revenue by INR 6232 crores and lower sales revenue from value added products by INR INR 2,746 crore. There is reduction in Government of India share of profit petroleum by INR591 crores from INR 14.63 crores in 9 months of previous fiscal to INR 8.72 grows in 9 months of this fiscal. The decrease is mainly at RJO N90 by 1 block, CBOS II and PMT JV Block by INR283 crores, INR 218 crores and INR83 crores, respectively.
The billing net of VAT and CSD for crude during the Q3 of current fiscal was at INR43.20 per barrel as against dollar. So this figure was in dollars and as against $59.3 per barrel in the same period in the last year. That's a decrease of $16.53 per barrel. And in percentage terms, this is a reduction of 28% or so. The exchange rate of rupee versus dollar, which has actually partly helped retain the or helped positively the revenues, stood at INR73.74 per dollar versus 71 point INR2.3 per dollar in the Q3 of FY 'twenty.
Thus realization for crude in rupee terms stood at INR3 INR 3,186 per barrel in Q3 FY 'twenty 1, visavis dollars 4,255 per barrel in Q3 of this previous fiscal, which amounted to decrease of 25.1 percent or so. So it means that whatever was the reduction in oil prices, Actually, to the extent of weakening of Indian rupee, there is an evading impact by around 3% or so. Similarly, gross billing per crew during the 1st 9 months of current fiscal stood at USD 37.74 per barrel as against US62.08 dollars per barrel in the same period of last year. That's a substantial decrease of USD24.34 per barrel. And in This is close to 40% reduction.
The exchange rate of rupee versus dollars stood at INR74.63 visavisversus INR70.38 in the 1st 9 months of previous fiscal. Thus, realization of grew in rupee terms today at INR2816 per barrel in 9 month period of this fiscal versus INR 4369 per barrel in 9 month period of previous fiscal, which amounted to a decrease of 35.6% in INR terms. So again, the weakening rupee has actually provided some sort of comfort by around 3%, 3.5%. During Q3 FY 'twenty one, the statutory levies stood at INR 4,097 crores as against INR 5,667 crores in Q3 of previous fiscal. That's a decrease of INR1570 crores.
And in percentage terms, this is about 28%. The decrease in royalty on crude oil INR 666 crores and SaaS by INR663 crore is mainly attributable to decrease in average selling price of crude oil from INR 31,000 INR899 per MT in Q3 of FY 'twenty to INR 23,928 in Q3 of 'twenty one. Similarly, there has been decrease in royalty on natural gas by INR225 crores on account of decrease in price of natural gas from INR 9,654,000 cubic meter in Q3 of FY 2020 to INR 5,00600 5,763 per 1,000 cubic meter in Q3 of FY 'twenty one. Similarly, the statutory levies have also decreased by INR 6,750. That's a reduction of 38% from INR17,764 crore in 9 months of previous fiscal to INR 11,014 crores in 9 month period of this fiscal.
The decrease in royalty on crude INR 3,032 crore and SaaS by almost a similar amount of INR 3,093 crore is mainly attributable to decrease in average selling price of crude oil from INR32700 per MT in 9 month period of FY 2020 to INR21110 per MT in 9 month period of this fiscal. Similarly, there has been decrease in royalty on natural gas by INR 680 crores on account of decrease in price of natural gas from INR INR 10,320 per 1,000 cubic meter in 9 month period of FY 2020 to INR 6,748 in the 4,000 cubic meter in 9 months of FY 'twenty one. The operating expenditure has decreased by INR1028 crores. That's a reduction of 18% from INR5,000 INR604 in Q3 of previous fiscal to INR4576 crores in Q3 of this fiscal. The decrease in Q3 FY 'twenty one is mainly on account of decrease in consumption of materials.
Rupees INR 174 crore, mainly at the hedge plant. Actually, this alone contributed around INR 146 crores out of that INR 174 crore, which I alluded to this just now on account of decrease in prices of spot LNG. Repair and maintenance The reduction is INR 233 crore, water injection INR 118 crores transport and of oil and gas expense, INR108 crores mainly at Mumbai Offshore and Manpower expenditure has come down by INR105 crores or so. This reduction in operating expenditure has been partly offset by increase in workover expenditure by INR99 crore due to increase in number of workover belts, which more jobs were taken during this year than the previous fiscal. Similar period in the previous fiscal.
Similarly, operating expenditure in 9 month period of this fiscal has also decreased by INR 2,048. That's a reduction of 13.4% from INR 15,311 IN 9 month period of 20 to 13,263 in 9 months of this fiscal. The reduction in 9 month FY 2021 is on account of decrease in consumption of material, mainly at the Dutch plant. And the explanation for the same is very similar to what I gave for 3 month period, which is actually the reduction in spot prices. Repair and maintenance INR 4.64 crore water injection INR 2.25 crore Nelly at Mumbai Offshore and manpower expenses by INR232 crores due to major superannuation separation last year and decrease in other staff related expenses.
Finance cost has decreased by INR148 crores. That is a reduction of 23.6 percent from INR626 crores in Q3 FY 'twenty to INR478 crores in Q3 FY 'twenty one. Similarly, the finance cost has also decreased by INR INR667 crore, that's a reduction of 34.1 percent from INR1954 crores in 9 month period of 20 to 1287 in 9 month 'twenty one. This decrease is mainly on account of decrease in short term loans. The lower rates realized on account of commercial papers and unbinding of discounts on the commissioning liability.
In fact, this whole situation has emerged both because of the base is low, our borrowings are lower as well as the rate at which we have borrowed are significantly lower. So we have benefited from the prevailing low interest regime for 2 on a quarter of 2 factors. One is that we have converted most of our short term loans into long term loans and also have locked in much lower interest rates than what we had experienced last year. There's an increase of INR121 crores. That is roughly around 7% in exploration cost written off survey and unsuccessful well cost in FY Q3 of FY 'twenty one, that is INR1718 crores in Q3 FY 'twenty has gone up to INR18.39 crores in Q3 of FY 'twenty one.
This increase is mainly due to increase in seismic that acquisition activity at Western Offshore and AAFB. And this needs to be seen in context of the prevailing constraints we had due to COVID. You would realize that notwithstanding the challenges of COVID, we had not only continued our activity level, but wherever it was possible, we actually increased activity. However, during 9 month FY 'twenty one, there is a decrease in exploration cost written off. Survey and unsuccessful wealth cost by INR1234 crore, lesser reduction of 22% or so from INR5645 IN 9 month period of previous fiscal to INR4411 IN 9 month period of this The decrease is mainly due to decrease in unsuccessful wealth cost by INR1051 crores.
DD and I cost for Q3 FY 'twenty one stood at INR 4,427 crores as against INR 5,302 crore in Q3 FY 'twenty, a decrease of INR 8.75 crore, that is roughly around 16% or so. The decrease in DD and I is mainly due to decrease in depletion by INR INR1326 crores. The decrease has been partially offset by increase in depreciation by INR146 crores, mainly at Mumbai Offshore due to increase in RoU assets, and that is a direct consequence of implementation of Ind AS-one hundred and sixteen and increase in impairment loss by INR305 crores. Similarly, there's also a decrease for INR1689 crores 12.4 percent in DD and I cost during 9 month FY 'twenty one from INR 13,618 crores in 9 month FY 'twenty to INR 11929 crores in 9 month of FY 21. The decrease in 9 month period of this fiscal is mainly attributable to a decrease in depletion by INR1968 crores.
The decrease in depletion is mainly at Mumbai Offshore Fields by INR1802 crore due to upgradation of reserves and Panamukta JV INR402 crore due to closure of the JV. The decrease has been partially offset by increase in deflation by INR 372 crores due to down gradation of reserves at Assam Asset. This has been partially offset by increase in depreciation of INR292 crores from INR 265 crores in 9 month period of FY 'twenty two, INR 2,897 crores in 9 month period of FY 'twenty one. The increase is mainly attributable to increase in depreciation at Mumbai Offshore by INR211 crore due to the increase in ROUS. There's an increase in exchange gain by INR 662 crores from an exchange loss of INR 226 crores in Q3 of FY 'twenty to exchange gain of INR 436 crore in Q3 of FY 'twenty one.
Similarly, there's an increase in exchange gain by INR 1419 crores from an exchange loss of INR 64 crores in 9 month FY 'twenty to exchange gain of INR855 crore in 9 month of FY 'twenty 1. Now corporate tax provision of INR 1433 crore in Q3 'twenty one has been provided as compared to INR 18.28 crores in Q3 of FY 2020. Actually, this particular item does contain a one off kind of thing. The effective tax rate of Q3 is 51.15 percent versus previous fiscal figure of 30.18 percent and applicable tax rate 34.94%. This is attributable to, as I said just now is mainly on account of tax provision for earlier years amounting to INR 506 crores towards Bivas Subhashwas.
So there is a similar corresponding impact in 9 month period also where the effective tax rate for 9 month period is 38.40 percent, 40% as compared to 31.81%. This, again, I mean, same reason. So the tax shown in the books would appear to be somewhat higher. So I thought I'll give this explanation. Well, friends, with this, I finish my briefing of the Q3 results of financial year 2021.
We'll be very happy to take questions from you. We would request you to restrict your queries on financial results only. Before I hand over, actually, I'd like to share 2 things which were covered in the press. 1 is that ONGC has decided to have its It's a wholly owned subsidiary for the purposes of marketing gas, and we have also taken in principle decision to take 5% equity in IGX. Now both these things actually gel well with the government's ambition to transition towards different bodies to come up with action plan to see that the gas share in economy increases from current 6% to 15%.
We, as ONGC, are very advantageously placed to benefit from the whole scenario because besides having stake in all kinds of gas in within the country because we are there in nominated fields. We are there in NELP, pre NELP, HPHT. But not only that, we have stakes in downstream processing plant through PLL. We also have upcoming potential projects in Regas through VCL in Chara Terminal. And besides that, actually, ONGC Videsh has taken sizable stake in overseas projects.
So I think as far as coming years are concerned, the story of gas is going to unfold, which is going to be critical to the sustained positive performance of the company. IGX, similarly, you would have noticed that IEX has been a tremendous success in the country. And IGX is very well positioned to benefit from that. And we have had intention to join the same over the past few months, and we have taken that decision in principle. We will be activating that.
You would have also noticed in Renewables also, we have we had announced last quarter or so that we have decided to come up this joint venture with LTPC. So these are some of the things, the benefits of which we'll reap over the years. So with that, I actually I hand over for the questions and answers. Thank you very much.
Thank you so much, sir. Thanks for the wonderful presentation. Ladies and gentlemen, it's time for the Q and A session. Yes. So the first question coming from the line name of Navisagupta, Bank of America.
Your line is open. Please go ahead.
Thank you. Good morning, sir, and thank you again for the detailed financials. Sir, my question is on the status of the KG982 basin. Firstly, on the gas production and also on oil Production, there are some media reports suggesting that the FPSO contractor has declared gross majeure. So what kind of delays are we expecting out of that?
So a couple of comments. One is that the project is going on well. COVID has actually created quite a few disruptions. And as a consequence of this, there was difficulty. So more than actually Indian supply chain, what got affected was the international supply Consequently, there were difficulties for suppliers of all major pieces of there were 5 major subcontracts, subprojects in the overall KG982.
FPSO was also one of them. But the situation is well under control. The production from KG98Y2 plus 2 has already started. It's relatively Significant production today at around 320,000 cubic meters of cash today. But from May onwards, we believe that it will ramp up to 2,500,000 to 3,000,000 cubic meters per day.
So from May onwards, actually, it will be a to build ramp up of capacity both on gas and oil front. So and as far as specifically you said About FPSO, there were news, but at the end of the day, all contractors are working to meet their kind of time lines. So that Progress is happening at the work front. And some of these disruption in international supply chain are also a reason Why in the previous conference call and today, I'm not kind of specifically committing to specific dates on which commissions or the exact levels of production will be at. So, the total PIMA is more than likely to happen.
Thank you.
Got it. And sir, on my second question, just on this on your initiatives on the gas fund, the subsidiary and [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] The equity participation in IGX, does that in any way hint at repricing of gas very soon? Because As I understand, IJX, the entire domestic gas is out of the purview of IJX to begin with. So are we looking at like Free pricing phone and what has happened on the gas pricing bit?
So far, actually, hence, we rely more on people like who sense the environment more than us. But on a serious note, I believe that government has come out with policy initiatives to transition towards a gas based economy. There is government has taken number of steps. And I believe that it is only a matter of time by which the gas prices will be the anomaly in gas prices for the nomination periods will be set right. Now what shape and size that kind of increase, consequential increase in the prices we realize takes.
That's a matter of time and future will unfold exactly what we'll get. But it is pretty likely that there will be a better regime, which gives us least remunerative price. And when I talk of remunerative price, frankly speaking, it has been in public domain that our cost of production of gas is in the range of around 350 to 370 depending on exchange rate and contribution from a particular field in a given year. And if one were to build actually the cost of investment, so it would be to be north of $5 per MMBtu. So those are the kind of rates, the cost levels at which we are.
I am not no way hinting that these are the levels we are likely to get. But these are some of the references we have in mind. We read the same press. I believe there was some committee. Committee probably has given its report and it should be under active consideration.
But it is entirely consistent and there is no reason not to expect that the gas prices will be revised.
Sir, just last thing for me, any tentative time lines on this? Will it happen before April? Will it not happen before April? Anything on that?
I'm not the one to give the time lines. There's no way because it's not within my control. I wish it will yesterday.
The next question is from the line from Amit Rastogi, UPS Securities. Shivani Zuppan. Please go ahead.
Thank you, sir, and Thanks for making a quite good day. Sir, could you give us an update on the performance of OPAL? What is happening there? And are we consolidated with us? And what is happening with the capital raise in that company as well?
So let me actually also take this opportunity because one thing I did not highlight in the fall was much better performance by all the entities in the group. Actually, you have Specifically, you talked about, Opal, but I'll take opportunity to also cover a few others. Just give me a minute. So OPAL Bharat actually has done well. And during
the 9 month period, if
you really see, Opal was only If one of the 2 companies have continued operating during this period, the OPAL has, for the most period of the last year, operated towards the last 3 months or so, is operating close to 100% capacity. This problem continues to be a highly leveraged capital structure because it is predominantly funded by debt and there has been much less equity in future. And the 9 month performance, it has its losses have reduced significantly from INR 832 crores during the previous 9 month period to INR 529. And this is So you have to actually factor in 2 adverse consequences. 1 is, of course, the impact of Prokofil where it did operate but operated at less than around 50% capacity for some year over year.
And secondly, since it's an AC Jet unit, when it sells its products in domestic market, Actually, it invites the internal custom duty. So notwithstanding that, our plan is both on operational as well as on financial front performed significantly better. So in our group, actually, the losses of Power Hands Limited have reduced. MSCZ is doing well comparative It is similar for performance to last year. DSN is positive.
OTPC has done almost their 9 month period profit was INR46 crore Previous fiscal, which is 85,000,000, so almost 100% improvement. And so all have done well. OBL, The HVCL profits during the 9 month period is significantly higher. MRPL profits are lower. So this is the overall story.
So not only NGC has been stress tested and come out with good performance despite the COVID. Actually, the whole group has turned out better performance. ONGC numbers are lower. But given the constraints, it stands its business context and tested. All others have actually turned out to much better performance than the 9 months of previous fiscal.
So thanks for the questions. That actually gives me an opportunity to clarify on some of other entities also.
Yes. Thanks, sir. And sir, my second question relates to can you give us a target for the next year production for both oil and gas?
So see, this year, We are likely to finish in the range of as far as oil is concerned around 22,000,000 to 22.5%, gas around That will be 22.8 to 23. That is the likely production for this year. And so value added products will be also similarly affected. For next year, the oil we anticipate to be 23 MMT or so, 22.971 to be specific. That's the number I have in front of me.
Gas, we will go back to 25. So that's likely around 48 in terms of OEG. That is likely level of production next year. Value added products also will be at a very similar level of 3.3 to 3.5 or so.
And sir, could you explain the capital structure for OPAL? And are we consolidating it? And what is the plan to raise capital? This was actually part of my first question.
So actually, If you recall, the paid up capital of Obal is INR 2022 crores, which consists of some INR 29 crores contributed by GSBC, 995 by Yale and 998 by ONGC. So as a result of which, our equity Percentage is less than 50%, and it is a joint venture. It's jointly managed by us. And Gail is also associated, and they are also represented on the Board. So the equity is of just 2022.
The total cost of plant is to be north of around INR 30,000 crores. The rest of it is funded through either CCDs or BTEC. So even CCDs are interest bearing. Though from From a very technical point of view, there are the CCDs of INR 7778 crores, but they carry a rate of interest. So consequently, virtually everything other than this equity of INR 20.22 crores and some bonds, we have contributed around INR 19 0.8 crores, rest everything is interest bearing.
So INR 4,000 crores Roughly, it's noninterest bearing address, it's all interest bearing, which is what I was mentioning that, that is resulting in a huge interest burden on the company.
But in the current environment, when the interest rates are low, I think It has a case for turning around because the profitability on some of the gas based trackers is right now supernormal. And if you look at the realizations across Europe and Asia, they are much higher than the Indian realizations. So I don't know why we are Foreseeing ourselves to sell only to domestic market while it's a senior unit. Because if you look at European relations, they're around $1700 on LLD. E.
So which is like one of the best case relations which we'll ever get in the history.
So Amit, actually, you raised a good point. This industry is very cyclical, and we are very advantageously placed. We are on the coast. So as and when the situation improves on either of the either fronts, we take benefit of that. And Q3 is a reflection of that, where our EBITDA is in excess of, if I remember correctly, I may be wrong by 1 or 2 percentage points, I think it is around 23%, 24% as far as OPAL is concerned, which is which may be considered very healthy looking at the history of OPAL's performance.
We are looking at the economics of sales. And as and when opportunity presents it, we do use both the markets. So today, we are advantageously placed as a SEZ unit. We would love to export as much as possible. But also, we are preparing for a scenario where government has taken initiative for Atam Nirwar Bharat, and Luckily, offtake for these products in India has also improved.
Our realization and margins even in India are strong because even Indian prices are not entirely detached from international prices. So and the 3rd quarter performance is a reflection of that. So you're right, The cycle seems to have turned a bit in favor of petrochemicals. Previous cycle has been much shorter. Same is true of OMPL.
We believe and we are keeping our fingers crossed that this And we have a little longer cycle to our advantage, and we capitalize on that.
Okay. And as far as your
as You also alluded to lowering interest rates. Yes, you're right. We did replace some of the CCDs, one tranche of CCDs, which whose all in cost was 9.13% earlier with all in cost of 7.02%. So we did get the 211 basis point reduction in the interest rates in Nepal in one of these CCTs. And we are conscious of it.
We are managing we are the as we had said that on a longer term, we have much better plans for how OPAL and OMPL integrated into the overall value chain of the company.
Okay. Sir, thanks a lot for answering my questions and best of luck, sir.
Thank you. Thank you very much and please have a nice day.
Thank you, sir. Thank you so much, Mr. Amit. And before moving on to the next question requesting to each and every individual, please press 1 So the next question coming from Sabri Hajarika, ANKIN Global. Your line is open.
Yes. Good morning, sir. Thank you for the opportunity. Good morning, sir. Yes, I just wanted to know what would be your standalone debt As on December 2020 end?
It's lower than what figure we have on 31,000 I mean 31st March 2020. It was INR 12,860 to rolls as on 31st December. So I mean, 31st March was 13,949, And now it is 12,000 crores under 16. Today, it is again, you can take INR 1,000 crores less roughly. Right.
And Our stand alone debt equity ratio has come down to around 6%. And group debt equity ratio is up to around 45%, 46%. So with these successive quarter, we have been able to address the figure.
And secondly, What has been the 9 months CapEx and guidance for this year and next year now that EBITDA is also up?
So CapEx actually, if you really recall, our budget was 32,502. And when Pavel started, we started reviewing as to what it would be even practically feasible because there has let me clarify a couple of things because there could be a thing need to clarify a fact or 2. One is that ONGC per se over the last 10, 12 years, of which I have very strong memories, has never constrained any activity because of the lack of availability of funds. It has never happened in the past. It has not happened when we had the highest debt in 2018.
And it is unlikely to happen anytime soon because our fundamentals remain very strong. However, our debt has remained our capital spending has remained anywhere between INR 26,000, INR 27,000 INR 27,000 INR 30,000 INR or so. Our budget for the year 2021 was also of the outlook of 32,502. But when COVID started, we started taking a very realistic view as to what would be the likely level of expenditure. So the initial figure we came to in around May June time frame at the time when COVID was at its peak.
And we had fairly good sense into what was likely level of activity, we came up with a number of INR 26,000 crores or so, plus minus INR 100 crores here and there. Subsequent to that, we realized that the country as well as the company had managed COVID quite effectively, and we had figured out ways of continuing business as usual despite the challenges of COVID. And we did, at that time, review of And we realized that this is an opportunity to put in more CapEx and probably bring in more activity as a result of which actually I also talked about our increased activity on survey at satellite, you would have noticed during my call at Mumbai. So we upgraded this figure to around INR 20 INR 9,000 crores or so. I believe we will end up spending somewhere very close to that.
It could be a figure of plusminus5% to 10%. That's the story about 2021. 'twenty one, 'twenty two continues to be Similar story because this is an year where we will be completing the ongoing projects and probably launching quite a few of new projects. As a result of which, actually, on the completing projects, the payments required to be made are marginal. And for new projects, actually, you make very small payments in the beginning.
So while whatever we start during the current year, the impact will be felt in coming years. But despite that, our CapEx is likely to be the order of around INR 32,000 crores or so. So that is what we anticipate. Consistently, it has been to be north of $4,000,000 We will continue to be somewhere in 4% to 4.5%. Having said that, we would also look at any additional opportunity to identify and if we can expedite some of these projects.
So we would not mind coming up with the midterm review should there be an opportunity to kind of expedite some of these activities. You could take some activities in parallel where we, in the past, could have gone in a sequential manner. So the figure definitely for 'twenty one, 'twenty two, initial figure is INR 31,000 to INR 30 INR 2,000 crores. But probably, we will end up this could be an exceptional year where actual year end figure could be higher. Normally, we end up utilizing anywhere between 92% to 95% or so we have been less than 100%.
But '21, 'twenty two is likely to be an exception, where it could be higher than our initial estimate. So budget figure is unlikely to be a constant for starting any activity for which we would be ready with our studies. I hope I have answered your question.
Yes, sir. Thank you so much for the detailed explanation. And last question is regarding your tax outlook. So you mentioned that it was around 34.94% for Quarter 3 adjusted for that.
That is the applicable tax rate for the corporate
loan. Right. So Are you looking at going to the new regime or should we currently consider this rate only for the next few years?
So that's a subject which we review probably either on a Monday or a Friday each week, right? So either we get up and start with that review or we sleep for the week with that The last topic on the mind, I think on a serious note, actually, we are very carefully considering the pros and cons. It's a matter of couple of years at best. So it could be this year or it could be next year that we'll transition. It could be 21, 22 or it could be 22, 23.
It can't be delayed beyond that because we have certain Legacy credits, mad credits, it's a question of taking a view. And those mad credits arise because of certain factors. So things are neither white nor black. Things are at times gray, then it becomes of taking a view. Probably this year, we'll have a very, very serious consideration on whether we'll transition to a lower interest rate or not.
But '22, 'twenty three and definitely it looks near certainty at this stage that we'll transition to a lower rate. But it is a work in progress. Let me caution that notwithstanding that it looks futuristic, I think it's a clear assessment of the situation on ground today.
Right, sir. Thank you so much and all the best.
Thank you. Thank you very much. Please have a nice day.
Thank you. Thank you so much, participants. Next indication from line S. Ramesh from Nirmal Bank Institutional Securities. Your line has been unmuted.
Please go ahead.
Thank you and good morning. My first thought is if you can give us the update on what is the capitalized cost in KG98 as of now?
[SPEAKER SRINIVASAN
VENKATAKRISHNAN:] As of now, I mean, the project was approved in $5,070,000,000 But except spending, maybe I'll request 9,500 crores. So exact figure will be shared actually. I think it is somewhere around INR 10,000 crores, slightly less than that. But I'm requesting Prakash to share with you since you probably want a more precise number we will share with you.
Yes. And related to that, if you can share some details in terms of how your KG P and L will move. While we understand the sensitivity in terms of your pricing and costing, we need to have some details so that we can make some estimates. So if you can share something in the line, so what will be the operating cost per MMBT or per SCM? And what will be the profit share of the government that will be useful?
So while I share the CapEx, actually, I can share only that much which we have been Sharing in the past, probably it will not be possible to share the specifics on OpEx, etcetera. I think you can take your own view. I'm sure you have a view. And we will probably surprise you on the lower side. But other than that specific numbers, we may not share.
CapEx as of today is INR 9,785 crores.
Okay. The second thought is if you're looking at your CapEx of INR 32,000 crores next year, we work on the current year's cash flows and we'll get about operating cash So, it's around INR 16,000 crores. So, do you envisage any external funding for next year's CapEx? Or are you expecting improved cash flows based on higher oil prices? What is the An assumption behind your funding plan for next year?
So I think as we have shared on a couple of occasions earlier, Actually, at around $47 to $48 that's like $50 price and fair price for gas, which is around $3 We kind of breakeven in terms of cash flow at around $50.3 That's the number. At 55 or so, we are in a position to pay a dividend at the historical rates with gas price up around 3%. So those are the numbers. We anticipate that price range, notwithstanding the fact that today, Brent is at 63. I still hold that planning case is still 45 to 55.
But gas do I do anticipate a substantial uptick because our realizations are historically low. So €179,000,000 if it goes to €350,000,000 or so also, then there is a substantial upside. So If it's a function of what kind of prices we realize, depending on that, we would have requirement. But one thing certain, no item of work or expenditure will stop simply because of lack of resources today. We are debt equity ratio is 0.6%.
It's a wasting asset actually. It's a nice feeling as a finance person to have 0 debt position. But at the end of the day, more value is added by carrying out the E and P activity in time because one loses a substantial value by delaying those. So we in case required, we will use our leverage to fund the capital expenditure as and when and wherever it is.
So let me just squeeze in
the last one. So in the KG gas development project, can you give us a sense in terms of when it will actually turn EBITDA positive In next year, FY 'twenty three, when do you expect that?
We don't have those numbers readily available. But See, these projects are extremely attractive, large sized projects, depending on how the things unfold because As you would recall, even in terms of specific dates on which things will resume at scale, I have been slightly cautious in giving specific dates or specific quarters in which we'll be able to come up to exact speed. So but our numbers, actually, the regime is attractive enough, progressive enough. And even if there is a little bit of setback, we would actually kind of break even much earlier than If for any reason there is little delay also, quite a bit of it gets compensated by lower sharing to be made with the government. While Exact probably we, in the past, have never shared the exact dates by which we will be breaking even.
So consistent with that, we would have difficulty in sharing any specific information on that. But I'm based, let's say, actually, sharing the value sharing is based on I'm and it progressively at a very high level, it starts with 85%. And in case for any reason project gets delayed, we continue to benefit from much higher contractor share till the IMS less than 1.5. So that's the likely situation. So Little underperformance in the initial phase or delay, which, if at all, is likely to be extremely temporary, is unlikely to affect the project economics in a big way.
At the end of the day, it would be quite a bit of impact gets by the lower sharing to be made by the government. So we are not unduly alarmed. We only believe that as and when this supply chain resumes, we had we will have better visibility on the exact time lines by which we'll be able to finish the project.
Thank you very much. That was helpful. I'll go on, Nikit.
Thank you. Thank you very much.
Thank you so much, Mr. Ramesh. The next indication coming from the line, Pinaki Parikh from JPMorgan. Your line has been muted. Please go ahead.
Yes. Thank you very much, sir. So my first question is maybe you have addressed it and I missed it. My first question relates to the creation of the gas subsidiary. [SPEAKER SRINIVASAN VENKATAKRISHNAN:] Now going forward, sir, can ONGC gas subsidiary big for the gas that ONGC produces, Similarly to what we have seen the other gas producers subsidiary doing it and hence consuming it internally?
Yes, yes. I mean, very definitely, that's the prime purpose for which we have it. Actually, you see, we have a number of entities in the group already. So one of those entities could have done this task for us. What we wanted, we believe that gas is a growing business.
We have pretty much every kind of gas in our basket, which nobody else in the country has. We can create a synthetic stream, which nobody else can do. We have international exposure to large projects like Mozambique, Sakhalin. We are already through joint our 100% subsidiary to NGC with us. So we have quite a bit of Preparedness all around.
We have taken PLL through which we have access to regasification. HPCL is a big partner in Charah terminal. So all these positions are very, very advantageously. And the Gas subsidiary is to consolidate this entire business possibly under 1 unit and run it as a huge, huge business profit center.
So thank you, sir. So just to clarify, sir, this the subsidiary can bid for the incremental gas produced from the deepwater, not from the existing gas that being produced from the nominated field?
So it depends how the regimes change, transition. There were certain things with Legacy oil and gas, which were not possible on a yesterday basis, but are likely to happen in the future. So similarly, I mean, a lot is happening on gas front. You would have read the way things are taking shape. It's Advanced step in preparedness.
Should there be a change in regime, applicable regime, we will try to capitalize on that. You are right. To start with, probably it is delta, not necessarily the 100% which will be the score.
Understood. So but, sir, if the regime changes for the underlying production also, then this would help us.
Yes. And as far as I Connected with something like, say, Mozambique or Sakhalin, that is always possible for us. We don't require anybody's enablement
for that. [SPEAKER SRINIVASAN VENKATAKRISHNAN:]
Sure, sir. So second question is the OMPL stake sale to MRPL was approved, And the transaction is completed. Sir, what would be next after this? Or this is the only thing on the overall reorganization of the broader group?
No, so it's like triggering a chain. So the first step has been taken. The merger will take place sometime during this calendar year. And then we'll be prepared as to integrate MRPL business 100% with HPCL. So that's what I can say at this stage.
That's what has been said to me also. So that's what I can say. In terms of specific time lines, once we get the merge, OMPL, at that stage, we'll take a critical look on what exactly and when exactly to trigger the things. Theoretically, we would have the complete process by 'twenty four 'twenty three, 'twenty four also. But there are ways and means of pre phoning it if that were the requirement.
I'm sure we will come out with specific timelines once we are able to merge MRPL with OMPL.
Sure, sir. And so lastly, more of a request. If you look at ONGC consolidated and the EBITDA and the standalone EBITDA, the Difference is as much as INR 5,000 to INR 6,000 crores or roughly 60% to 70% of stand alone. Now sir, while we focus on OBL and MRPL, there are multiple group Companies where they are substantially large now in terms of size. Can we get a better walk or presentation going forward on Quarterly basis, which highlights all the other entities in the consolidated group as well.
So we know how they are changing and how they are moving about.
No, we'll be very happy to do that. In fact, if you still want, if anybody is interested, we can, if I, at a very summary level for the benefit of all, see our own profit For 9 months is INR 4,752. OBL is INR 867 crores. MRPL, which was which had a loss of around INR1800 crores last year, is at INR 999 crores loss this year, so practically half. HPCL has done phenomenally well.
In fact, that's an entity which is the largest profit making. And it actually does well with the strategic nature of this acquisition when it was made in 2018. But a few talks were there. But at the end of the day, we have started benefiting from the integration. And HPCL profits are GBP7,602,000,000 and this is in 3 quarters.
So one can kind of Estimate what kind of numbers it is going to make in next quarter. PMHBL is Profit making small, nearly 100 percent owned, nearly because there are some few shares held by some other entities, some 26 1,000 shares in this entity. Otherwise, 99% also held by ONGC and HVCL equally. PL So that has that continues to be in black. It is generating profit around INR38 INR 40 crores or so.
PLL, INR 288 crores. Pavanhans, lower losses. MSE Jet, lower losses. Opal, again, compared to 830 losses last 9 months, Actually, it is €529,000,000 DSL is in black. OTPC is nearly 100% in more than last year.
ITGL and OTBL, these are small entities making some small contribution. So these are This is the kind of situation. But you are right, actually, from next quarter onwards, we'll include a section in the initial brief itself. That's very helpful suggestion from your side. Thank you.
Thank you. Thank you very much, sir.
Thank you, Mr. Parikh. So next indication coming from the line Mayank Maheshwari from Morgan Stanley. Your line has been unmuted. Please
A question from my side was more related to the first point you had talked about in terms of And investing in renewables and gas. Out of your total $4 odd 1,000,000,000 is there something you're setting aside Now for these new energy kind of areas, is this something that the Board is looking at?
So two things. One is that as far as gas is concerned, it will not be an incremental investment. It actually as and when we have this entity. Actually, it will be carrying out the same job, which today we are doing it through ONGC 100% operations Or probably, it will do additionally. It could buy our volumes wherever it is feasible.
So it is not additional business. It is running the same business in a more targeted manner. As far as renewable is concerned, it will be an incremental investment. We have announced JB, we are looking at some projects. At the end of the day, actually, whatever investment we will make, right now, we have a very token provision in our budget for this.
But it won't be a constant. If we get a good project or good target, budget won't be a constant. And what we will look for will be obviously an opportunity of size and scale. We will not be going after smaller entities because as of today, we have close to around 200 megawatt capacity. Our prospective plan requires us to scale it up to close to 5 gigawatt to 10 gigawatt.
So those could be the kind of numbers. We are not in a hurry either. We are not kind of in a hurry to do it tomorrow, but we are looking at all available opportunities set in the country. Right now,
within 4, there is not much
of provision for this. But that's what I alluded to that as and when the opportunity come, budget won't be a constant.
Got it, sir. And so just an extension to this, like considering OBL has presence in countries outside India, is there a place So you would be looking for renewable opportunities or you are just focusing on India right now?
So I mean our base case will be India because the renewables see, whatever OBL also does, does theoretically, there is a possibility for those volumes to be either brought to India to or to be sold there and those revenues to be utilized for energy security in country. Probably same kind of flexibility will not be there when it is a question of renewables. In renewables, our focus will be more to invest within country and help solve the energy puzzle within the country. But if there is a great opportunity, we will not shy away. But prime FAC is unlikely to be the kind of first thing on the radar.
So next question is from Akshay Vaishist from ICIC Securities. Your line has Veeran Mukit. Your line is Veeran Mukit.
Hi, sir. Thank you so much
for taking my question. So my question is on KGD Water Gas. So you just mentioned that the production has already started. Just wanted to understand when is the production expected to peak?
So that's what I told. I gave you two numbers. 1 is existing level of production and As far as the peaking date is concerned, that's what I would be very cautious about committing today for the reasons we discussed earlier. But it will happen something in 2023 or 2024. So that's likely scenario.
But I'm myself very cautious of giving a date and then explaining in the next call if there is a delay because as rightly pointed out by some of the Other people on the call, they did say that there were certain disruptions. Yes, the international supply chain was affected adversely in a big way. So we are taking a stock. And before giving any specific dates, we want to be pretty certain. So but the timelines don't change materially.
It will be somewhere in 'twenty three or 'twenty four.
Okay. So this production is expected to ramp up to 3 to 3.5 in May this year. So any number you would like to put in What will the production be, let's say, next year in FY2023?
So give me a minute if you strategically want it. [SPEAKER SRINIVASAN VENKATAKRISHNAN:] 21, 22 Today, I mean, this is a figure which you can take with plusminus10%. 'twenty one, 'twenty two average, we anticipate to be close to 3.4 or so. And 'twenty two, 'twenty three, we anticipate it to be 8.5% or so.
Okay. And in 24% which will be the peak basically?
Yes, yes.
Okay. Thank you so much for that, sir.
And my second question is on the gas side formula. So I reckon you mentioned that there are no particular timelines for any change in gas price formula. But I just wanted to get your sense on, let's say, if the gas price formula does not change in April this year, Is it possible that it won't change at all? P.
Vijay Kumar:] No, I mean 2 things. 1 is that I don't know specifics on what is happening and when it will happen. I don't believe that it will not change at all because if you really look at a couple of days in the past, actually, gas has seen huge volatility in prices, which would have not been probably noticed by few of Few actually molecules have been sold at as high as more than $100 per MMBtu. And 1 cargo has been sold at $39 per MMBtu. Having said that, probably long term averages are close to around 5% to 6%, 6% to 7%.
So it's a era of more benign gas prices than what we have seen in the past. Notwithstanding that, that benign level is also at least 5 to 6 times higher than what we are getting. So sooner or later, I am sure everybody who is in know of things and who deals with the issue will be aware of the urgency and it will be addressed soon. I think customer release since prices get revised in October April. I do anticipate that things will happen much before that.
Sure, sir. Thank you so much. That answers my question. Thank you, Mr. Vasist.
Next, we have Manikanth Thagai from Axis Capital. Your line has been unmuted. Please go ahead.
Good morning, sir. Thank you for providing Such a great presentation so far. So just wanted to check on the gas side again. Have you done any analysis in terms of What could be the total gas consumption across all of our businesses, subsidiaries currently?
So we have done it. I mean, we have done depending on what level HPCL see, let me first identify the major consumers. So we have consumers in terms of ONPL and MRPL. Opal is a major consumer of gas. Then we have CGDs through HPCL and then there are refineries of HPCL.
I think taken together, the level of requirement is anywhere between on a conservative basis 2.5 millimeters to 4 or so as on date. So these are the kind of level and which actually translates into one expansion of any regasification terminal in India or one liquefaction plant overseas. So this gives actually a kind of size and scale. We have already made consumption that's within the group. We don't have to go outside if he was to put in a capacity of this magnitude on whether on regasification or on production side.
So just an extension to that, sir, would you have any rough estimate of how much this can go up to the next 3, 4 years If we have such kind of estimates?
No, I don't think with existing operation it will change materially. And the reason for that I can count that today MRPL already has completed expansion Phase III. Expansion Phase 4 is pretty much while we have acquired the land, we have it is held up. We are taking a view on what kind of trends on petrochemical complexes, etcetera. So probably, Phase 4 expansion is still quite some time away.
So MRPL, ONPL product consumption is already at peak. Bhopal also Unlikely to expand it within the next 1 or 2 years, expansion will happen at OPAL level, but in more in a staged manner. And probably, we will by that time, we will have ability some of our internal gas. As far as HPCL refineries are concerned, they are taking in Charah Terminal. And consequently, they have 2 consuming large refineries.
Refineries capacity is almost doubling. That you would know that 7.5% is going up to 9.5% and 7.3% is going up to 15% also. So that is doubling. And then in addition, we also have downstream joint venture of HBCL by the name of HML, where also the expansion could. So we have strong potential to consume internally.
So we are the initial target would be consolidating our own business and then probably looking at others. But none of them except for the ongoing expansion phases. So everything is expanding. Both HPC and the findings are expanding. HMEL is under major expansion phase.
So beyond that, I think it will stabilize in a year or 2. Bart Meyers Refinery is additional thing which is coming up, which 3, 4 years down the line, as and when it comes, will be a kind of stage increase. Other than that, there is no major increase likely.
And just two more questions. Just wanted to confirm the peak production at KG98 by 2 is still 15,000,000,000? That's the first question. And second one is if you can throw some light, some color on the HCNG and Gas to Power businesses that were highlighted as part of your gas business subsidy. What kind of investments would be there?
And Now what do you have currently in this in terms of the technology and what kind of progress we have made there?
Could you repeat your question?
So the first question is, is the peak production at KG98
by 2?
That's yes. Directionally, yes.
Okay. The second question is if you can throw more color on the HCNG and Gas to Power businesses, which were mentioned as part of the gas business subsidiary. Now what kind of progress we have made so far? And what is the technology that we have? And what kind of time lines and investments are required here?
Okay. So two things actually. 1 is that we already have Gas 2 Power within the group. As you would know, OPPC is a joint venture where we are 50% stake. It has 7 26 megawatt of production capacity.
So we have a very strong presence. Actually, this entity meets around 35% to 40% of entire energy requirements of Northeast. So we know the business. We have a very strong foothold in it. So as and when possible, we can always scale up this production.
As far as Hydrogen part you suggested or SCNG both because we have something called ONGC Energy Center, which has taken up projects and is at advanced stage in terms of beginning outhouse as to how to commercialize some of these developments happening on hydrogen front. So we are in preparedness, But as and when we go, probably we will also be having some joint venture partner of established credentials internationally or nationally, so that we have we can hit to the ground running, as they say, on the day 1 basis. So it probably might happen. I'm only talking as a possibility of doing it in conjunction with somebody rather than doing it alone. But knowledge exists, preparedness exists.
At prototype level, we have those experiments at ONGC Energy Center.
Understand. So thanks a lot for the detailed answers.
Okay. Thank you so much, Mr. Dutnik.
So So couple of maybe we can have a couple of questions. So there are no
more questions from the file
plan at this time.
That's it. Thank you very much. So I think with that, Thank you very much. I think we had wonderful opportunity interacting with everybody on the call. Thanks for organizing.
And we look forward for similar opportunity. If anybody has any information requirement, I would reiterate an offer. Please write to IRC. You can reach me also through them. We'll be very happy to share as much detail as is possible within the embedded rules and regulations, but we'll be very happy to receive your information requirement because that also gives us an idea as to how to kind of prepared for the next call.
So we have noted a couple of points. Probably, we'll incorporate, especially group performance is one thing which we noted was a request, and we'll include it from the next quarter onwards. With that, thank you very much, and please have a nice day, everybody.
Thank you so much, sir. And thank you all for your speakers and the participants. With this, we conclude the conference call for today. Thank you for joining in.