Good morning, ladies and gentlemen. I'm Madhuri, moderator for the conference call. Welcome to ONGC's earnings conference call for quarter and year ended on 31st March 2026. We have with us today Shri Arun Kumar Singh, Chairman and CEO, ONGC Group of Companies. Shri Rajarshi Gupta, Managing Director, ONGC Videsh. Shri Manish Patil, Director (Human Resources), having additional charge Director (Finance), ONGC. Shri Anupam Agarwal, Director (Finance), ONGC Videsh. And team who will interact with investors and analysts to discuss Q4 earnings. As a reminder, all participants will be in the listen-only mode, and there will be an an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone telephone. Please note, this conference is recorded.
I would now like to hand over the floor to Shri Manish Patil for his opening remarks.
Good morning, ladies and gentlemen. I am Manish Patil, Director (HR), ONGC, having additional charge of Director (Finance). I welcome you all to this ONGC earnings call for Q4 and financial year ended 2026. Thank you all for joining us on the call. As said earlier, we have with us Shri Arun Kumar Singh, Chairman and CEO, ONGC. Shri Rajarshi Gupta, MD, ONGC Videsh. Shri Anupam Agarwal, Director (Finance), ONGC Videsh. Also present are my colleagues from ONGC, Shri Yogish Nayak, CFO. Shri Ajay Kumar Singh, President, Planning and Transformation. Shri Satish Kumar Dwivedi, Chief BD & JD. Shri Ravinder Singh Negi, Chief of Investor Relations. Shri Sanjay Kumar Sharma, Head Investor Relations. Shri Prakash Joshi from Investor Relations, and Shri Akhilesh Tiwari, Head Corporate Accounts.
ONGC has compiled its financial results for the quarter and financial year ended 31st of March 2026, which has been audited by the statutory auditors. The financial results have already been released on 26th May 2026 through a press note and sent to the stock exchanges. This has also been sent to the analysts who are there on our mailing list. Here is a brief synopsis of the results. The company at the consolidated level has earned profit after tax of INR 3,678 crores during Q4 FY 2026, against INR 8,965 during Q4 FY 2025, which is up by 53%. There's also an increase of 30% in consolidated annual PAT, which is INR 49,793 crores during FY 2026, as against INR 38,329 crore during financial year 2025. This increase in consolidated PAT is mainly supported by performance of our subsidiaries HPCL, MRPL, OVL, and OCAL. Now coming to standalone financials.
There is an uptick of 3% in PAT on quarter-on-quarter basis on account of improved crude realization and rupee depreciation. Company has earned profit after tax amounting to INR 6,650 crore for Q4 FY 2026 against INR 6,448 crore earned during Q4 2025. Annual PAT for FY 2026 stood at INR 32,894 crore against PAT of INR 35,610 crore for FY 2025 impacted by lower per barrel realization of crude oil. The statutory levy has decreased by INR 4,820 crore, that is 15.6%, that is from INR 30,968 crore in FY 2025 to INR 26,148 crore in FY 2026, mainly due to lesser realization of crude and abolition of SAED with effect from 02/12/2024. There is an increase of INR 3,373 crore other expenses during financial year 2026, that is INR 28,104 crore in FY 2026 to INR 34,731 crore in FY 2026.
This is on account of increase in provision and write-off by INR 1,142 crore and increase in exchange loss by INR 1,932 crore. Provisions and write-off has increased mainly on account of one-off provisions in Q4 FY 2026. It includes provision of GST and royalty of INR 235 crore, expenditure of INR 262 crore related to KG-DWN-98/2 umbilical written-offs as per opinion of ICAI, which was previously capitalized. Provisions for old outstanding receivables of INR 257 crore. Provision for store and spares of INR 280 crore. There is an increase in exchange loss by mainly on account of depreciation of INR versus US dollar by INR 9 per US dollar, that is 11%, in financial year 2025 versus financial year 2026, and upward revaluation of foreign exchange liabilities. ONGC declared three hydrocarbon discoveries during financial year 2026 in its operated acreage.
All the discoveries are in shallow water region of Mumbai offshore. Two are new prospects and one is new field discovery. The standalone crude oil production was 18.355 million metric tons during FY 2026, as against 18.558 million metric tons in FY 2025, and the standalone natural gas production was 19.533 BCM in FY 2026 as against 19.654 BCM in FY 2025. ONGC's production has remained broadly flat in recent years, the company has now taken a series of bold, structured, and long-term initiatives to address exploration and production challenges. ONGC has entered into multiple new ventures and strategic partnerships for overall production growth, entering into new business verticals, expanding renewable footprint, and as a strategic enabler for strengthening our subsidiaries. Board has recommended final dividend of 20%, that is INR 1 per share, with dividend payout ratio of 51%.
The total dividend for financial year 2025-2026 would be 265%, that is INR 13.25 per share of the face value INR 5 each, with the highest ever total payout of INR 16,669 crore. Friends, with this, I finish my briefing of the results of the fourth quarter and financial year 2025-2026. Now, I will request Shri Arun Kumar Singh, Chairman and CEO, ONGC, to address the attendees to give you a detailed overview of the performance and future roadmap. Thank you.
Good morning, ladies and gentlemen. It is a really great pleasure for me to interact with you. First, I'll give you a 30,000 feet view, and then we can take questions. First and foremost, if you take E&P side of ONGC now is two-third E&P and one-third non E&P at a group level. Two-third, if you say, E&P, which continues to be the main thrust. The two, three macro trends to see is, basically, first one is that, you might have heard that there's a great push towards exploration, and government is seriously considering to fund, particularly deepwater exploration, which we were doing so far at our cost, but of course, size was small. Now, deepwater exploration is coming in focus from government side.
Second, if you see at policy level, which is a macro level, if you can read the pattern of time, Government reduced royalty from our onshore productions. Basically, these all, royalty, post wellhead, all that are in the direction of promoting E&P in the country. In fact, taking a hit on Government own revenue and literally giving that money to you for increasing production or doing more exploration. That's also, you must have noticed that unlike previous decade, this time when the oil hit $140, still SAD did not come. We thank Government for that, because whatever market price is there, ONGC is able to realize that. In fact, ONGC now is a, if you can say safely, that other than the APM gas, Government is not controlling any of our revenue stream.
It is purely left to ONGC to manage its revenue stream, be it production or be it the price. Only area where government is involved today is APM gas. First and foremost, we want you to know that ONGC produces today and sells more gas than oil. In fact, gas is now making more than oil. Gas side, if you see now, new well gas, last year was around volume wise it was 17 and revenue wise 21. This year, you can do your own number crunching. There's a big jump in new well gas. Already from April 1, it is 9 MMSCMD plus. You can expect another 3 very easily because our new project is new well gas only. It becomes 12. 12 out of, say, whatever we sell, 25% of our gas has become new well gas.
New well gas, if you notice, you get 12% of crude. Virtually, this is international price. In fact, world over, local market, I don't think there is any market in the world which pays more than 12% of oil price. LNG is different because LNG liquefaction and all that cost. Probably, for new wells, India is the highest paying market in any onshore thing. That also goes to prove that government intention is to leave more money with the E&P operators to do further production and exploration. Bigger story, therefore, in our basket today is that new well gas will be always on rise. From 17%, this has already jumped. I think it will be at 30%, as time will tell. Ultimately, because there is some margin we have to take for what happens. Literally it will be between 25%-30% anywhere this year.
Next year it will be again 30%, 32%, 35%, 34%, 36%. Every year, because as you know, why I'll explain you this, is why new well gas is on rise. That doesn't mean that gas production is on the same ratio rise. It is gas is shifting because our old wells are dying and nearby will drill new wells to produce same gas or more gas. Therefore, the $7 gas is gradually getting replaced by $12 gas. That is only a matter of time before four, five, six years max, even if the government policy doesn't change, if the same policy continues, when almost getting 90% of ONGC gas will be new well gas. This is something that you can factor in in your calculation, that new well gas, what price, at crude price of, say, $90, we get $10.8.
10.8 in the local market, we value it more than oil, to be very frank with you, because for different reasons that we cannot share with you, but our gas is not as cumbersome as oil. That's it. It leaves more money in our pocket. That is so far the gas part is concerned. Third part, India is oil may be flat, gas, because or unless we get some major discovery, gas will keep growing. Like for example, this year itself, we have started opening the wells. Out of 15 wells, we have already opened four wells for DUDP project, which is supposed to be 4.89 MMSCMD gas. Progressively, we do it because one by one to balance the system. If you take that quantity of, say, four.
Four on total our gas sales is to be production is around 53, 54. Even production-wise, it is. These are all net sales gas. What I'm trying to tell you that every year, 7%-8% increase you should expect in gas. This year is DUDP, next year is DSF. DSF is also again 4-5 MMscmd gas. We are hopeful to open complete 98-well two gas wells, because the wells are complete, now platforms are complete. Often we told you that project was inordinately delayed for geopolitical and because all the vendors were foreign-based. We are hopeful that now last leg we are doing a piping connection, which is internal to our well. July, August, we'll open those wells too. You can safely assume that our gas production will be up compared to last year.
Next year also, gas production is up on account of. It is not only for us, it could be true for other operators too. Gas is becoming more attractive because of the price which Indian market pays for gas. This is something that I wanted to tell you. Fourth thing is important is that we roughly drill around 500 wells. 500 wells means 100 wells are exploratory wells and around 400 are producing wells. This year also, we are increasing little more, 50 to 60 wells or little more than that, we may drill more. For the reason to basically augment or support our production base. At the same time, we should be mindful that in this business, old field depletes, the pressure goes down, and therefore, every time we have to search for new.
Fortunately, for last year, our reserve replacement ratio in 25/26 is more than 1.1. It is 1.15 or something like that.
1.1?
1.17. It means we found new oil and gas equal to what we sold. It means R/P ratio almost remains at the same. Means the reserves to production ratio. 2P reserves is around 700+, which is almost two, three, million tons more compared to last year. Futuristically, these are relevant for you, so I thought I'll give that information to you. Coming to our deeper, bigger commitments. Bigger commitments are this year. One thing you must know that, I want you to know that we are today executing almost around INR 33,000 crores of project investment offshore. That is currently working. Work is going on. That is total project value is INR 33,000 crores. These all are there to either sustain production or increase production. You can draw your own numbers that how much we contribute into increased production.
That is something that we want you to know. We have this year also we are in the process of, that we'll share with you at appropriate point in time that how much we are doing new projects. That part and then one more thing we want you to know that global outlook view also better than us. Global outlook of oil price is certainly for next 3 years is better than what it was previous 2 years. You have to draw your own inference to see that where ONGC will be. This is by and large, I've shared the ONGC picture of the price. One thing which is we really are very proud that. For Western Offshore, which is roughly our 60% of oil and 70% of our gas comes from Western Offshore. Western Offshore is our lifeline.
You may be aware that we gave BP TSP contract for Mumbai High. Mumbai High was only 38% of total Western offshore. Day before yesterday, we awarded TSP 2 for remaining 62% of Western offshore. Now 100% of Western offshore is with BP as TSP. We shared with you the baseline numbers. BP showed a good result, although in our industry, even the leaf doesn't move for less than two years. Anything we do, it takes time in E&P industry. First year itself, they showed some operational changes here and there, and we could see some results. The big things are under execution. Big things means CapEx projects, mainly the water injection wells, producer wells. What the group work our TSP team did, that work we are under execution.
This year we will execute 40%, and next year we will execute the 60% of recommendation. Remaining, which we have just now awarded, I hope that next year will come for execution and for remaining 62% of the field. TSP, we are betting big on TSP with BP, and at least initial shoots proved the line of thinking was right because that too, in a very short span of time, last year April they came. We are very hopeful about outcome from that. Now, one more thing we want to share with you is 98/2, I shared with you guys, but I'll be very honest to say that we had some geological surprises in production in 98/2 oil, but we have almost got full handle on it, and we know what to do now. What to do now in terms of sustaining the production.
This is something that yesterday in our press release also we mentioned, but gas wells will open, and now we have best international experts also to suggest us that what to do best in 98/2. These are small interventions that we need to do, and that we will do in the shortest possible time. This is something about E&P. Now coming to OVL, our subsidiaries, and our other activities. The first thing you may be aware, we are back in Sakhalin, and Sakhalin is full blast. Russia is producing almost what it was producing pre-Ukraine. Sakhalin is at same level. You can draw your own inference to what kind of thing it will do to ONGC Group. Because Sakhalin is our numero uno asset in the cap of OVL. Second good news of company is that Mozambique project is progressing very fast.
There are 6,000 persons on the site doing project. We hope that if everything goes well, 28 end or something, we should have our LNG. This is something that is happening good on the front of OVL. Third thing, which is also important, is Venezuela. We are very hopeful that Venezuela, we are producing something currently, but now in the new regime of American new regime, we are hopeful that our production will go up substantively after we get the license in the new regime, that is U.S. regime and all that. Hopefully, Venezuela also will start showing good number of production in years to come. This is something that on OVL side. OPaL side, as promised, we had promised that we will turn it around.
We almost turned it around because last year if we had some small issue, otherwise our EBITDA was INR 1,500 crore, but we achieved INR 1,206 crore. There was some last month, March issue came, then the fertilizer and chemical industry, we had to shut for want of gas, because gas got diverted to LPG and all that. Otherwise, we were there. What we had promised, that INR 1,500 crore will be our EBITDA of OPaL. Let's hope that next year, that is this year, it achieves again, our internal target is INR 1,500 crore-INR 2,000 crore. It achieves EBITDA of that INR 2,000 crore. Now we want to share with you that something that is last four, five years, you must have observed us that we have been very bullish on OGL, ONGC Green Limited. ONGC Green Limited is having two, three mega.
One is 100% subsidiary called, which we acquired from PTC, and the other one which we acquired with NTPC. That is now 3,000 megawatts plus, and hopefully it will add another 1,000 megawatts in this year. There, we are almost with our own production, what we had. We have become now you can say that we are almost close to 3 gigawatt by next year in terms of our renewable portfolio. Also, Ayana, it's turning out to be a good asset because it has old PPAs and all that, as you are aware. It is something that, the renewable segment, that is our flagship. Cost reduction side, I want to talk about, because cost reduction side, we had promised 5,000 crore. We almost got 4,000 crore, but you'll say that where is that money gone?
Money has gone in terms of, GST went up in oil and gas for input 12% to 18%. That itself wiped out around INR 2,000 crore for a year. I'm saying everything put together. Second issue came with this dollar conversion, this rupee depreciation. This ate away all that INR 4,000 crore we saved. We are on course to save INR 10,000 crore, like I told you. That hopefully another INR 3,000, 4,000 crore will come our kitty with host of efforts, and it is already in place. Shipping side, as you are aware, we have formed a JV with Mitsui. We have ordered two ships for very large integrated for our OPaL. Shipping side, that is something that is another activity.
Petchem, that also we have shared with you in stock exchange filings that we have approved the creation of a JV, between MRPL and OPaL to have better synergy in Petchem marketing. These are two other companies and two having independent everything. We are basically amalgamating the marketing part so that there's one umbrella brand under which the product gets marketed. This is something that our board has approved. It is now in the final stages of other statutory requirements. Hopefully there also some value should get created. Yesterday in our board, we approved a port business. We yesterday approved the formation of a new JV with the Gujarat Maritime Board to create a new port at Dahej. I want you to know that Dahej is the least distance port from northern, denser population part of the country.
Naturally, anything to land at Dahej is cheapest for the country in terms of transportation, further transportation. Dahej, we know that Dahej also is nearest for the LPG pipeline, that is 8 million ton Jamnagar-Loni pipeline. Plus this port will serve our own interest of this OPaL plus LPG. From day one, it should be a very, very highly financially viable and commercially profitable venture. It's 50-50 JV between us and Gujarat Maritime Board. If you notice, five, six new JVs have come in recent times. Basically, increasing our chances of other revenue streams, and including renewable. Basically in the all-energy space. Plus integrated to our own line of business, like shipping, what we did is for our own shipping and transportation from U.S. for our own plant.
Now coming to, I think I'm done with most of things except unless you. Did I miss anything?
No.
This is the macro picture. Now, we want you to know that gas is more lucrative for us today. In Indian context, gas is more lucrative. We should call ourselves gas and oil company, not oil and gas company. Also, now, whatever new gas comes, even from APM block, DSF is free pricing. DSF, which will come next year, is market price. It is not even governed by 12% slope. 12% slope is only for nomination field and any well, like this project of DUDP is in the nomination block, and therefore entire production is going to the new well gas. New well gas is 12% of slope price. This, we want you to be mindful, and therefore, ONGC gradually is becoming more greener company through more gas.
Now that is also a strategic fix for the world, that possibly only one oil and gas company in the world which produces little more gas than the oil. This is something that, as you know, oil production of the world is around 4,000 million ton, 4,000, 4,400. Gas production is 2,500. We are at almost matching. Oil and gas is equal, and gas is little more than that. It is something, and gas is more valued fuel in the light of what goes on in fact. In fact, you must be watching the market. In India, gas demand is galloping. Maruti alone is selling roughly 25% of its vehicle is a CNG vehicle. Car manufacturing.
Because CNG is a natural, and CNG demand is viable at 12% price, naturally it is more greener, and it is also gas, we can produce more and more. That confidence we have. Oil, I'm not saying it can be contemplated, but oil growth, in our view, unless we have some big discovery, will be muted. Gas growth will continue to be. This impression that ONGC will not grow is not correct. We grow more on gas side. That factor you should keep in mind. With this, I'm done. Now we can take questions.
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. The first question comes from Nitin Tiwari from PhillipCapital Limited. Please go ahead.
Having this call, really appreciate the elaborate initial brief that you gave. Gives us a very clear picture. My question was with respect to gas production. The first question is with respect to gas production. As you mentioned, I mean, your incremental focus is on gas, and you spoke at some length about it. What I wanted to point out is that surprisingly, over the last five years, our gas production is on a continuous decline, despite whatever investments that we have been doing and despite the guidance as well. If I remember right, our earlier guidance during this year was that by January, the technical partnership with BP would start in some wells, and we'll also have incremental gas coming in from Daman offshore as well as other fields, production offshore, which will contribute about 5 MMSCMD by end of March.
I just want to understand, what is the status of these projects? Was there any incremental production that came in, and the decline that we saw in this quarter was despite this production coming in? In that backdrop, what is the guidance for FY 2027 and FY 2028 for gas production for us and also for the year? That would be my first question, sir.
BP in the MH field, that is Mumbai High, that is TSP-1, there oil is on baseline target. Oil is 102%. We have disclosed that yesterday, and gas is around 108% or 109%. Gas for the BP has gone up. As I told you, oil and gas production, there is some small operational part, and there is largely facility part. Facility part is coming up. It is first year itself, MH has shown a number. First year was never supposed to be a great number because facility laying will take around a minimum one and a half year to go. Still, where BP is involved, the production is more compared to what we are targeting. Coming to DUDP. DUDP. Yes. In March, DUDP, we were targeting March, and March we have started opening the wells.
Try to understand that it is not like something that you start today, everything to open in one day. We go through a process. There are 15 wells, and all the four platforms are fully ready to receive gas. We are opening gas. Four we have opened, and the remaining 11 we have to open. Whatever we had committed to you, we will start monetization from March. I think we have honored that. Okay? Monetization commencement doesn't mean that full thing coming in one day. It is a startup plan, which takes around six to seven months, and that process we have to go through. In this monsoon, we hope to open at least another six to seven wells. Monsoon is starting now. The fifth well is under opening now. Sixth will come, then seventh will come, eighth will come.
There is a process and sequence to be followed for gas production. Because you have to synchronize with the pressure balancing you have to do. The well doesn't get over pressurized and all that. There are technical issues there. We are sticking to that plan, that monetization commenced in March. Hopefully, by September, October, we should have opened all the wells. Again, I just want to tell you, peak production doesn't mean that after we have opened all the wells, that peak production happens. Peak production happens on the reservoir maturity. After pushing some gas out and all that, then again, interventions are made, and therefore peak production may be a little further away. All the wells, we are hoping to open by just after monsoon. It should be completed after monsoon.
By September, October, we should be through with all the wells opening. Opening should give us around 3-4 MMSCM per day. Did I answer your both questions?
Yes, you did answer this one. Actually, I also wanted to have the guidance for 2027 and 2028. I do appreciate the complexities in these projects, sir, and really appreciate the good job that ONGC is doing. I was only going by the guidance that you all gave, I mean, at the beginning of FY 2026.
I'll tell you. We gave a hint in yesterday. I read it, though I didn't write, but people have written it well. They have said very clearly that the Gulf War, March, many projects got delayed because of the Gulf War. One of our major pipeline replacement projects was by a Saudi, a Dubai company. Naturally, that project, you know, got kicked because of the Western Asia issue. In fact, geopolitical issues. Similarly, there are some projects which got linked to material availability and all that. That was also because somebody is not getting energy, so everybody asked for deferment of time. Still, you should appreciate that fortunately, DUDP were changing very badly, so we got on time. Other projects, little delay here and there.
Also, we should be mindful, when we connect the new projects with the old wells, there is a process to be followed in which a certain portion of time, the production suffers, because it is a partial shutoff or full shutoff, so that we can do the activity. Some part you can attribute to that. If you see last year, ONGC standalone gas production, it is almost flat. It is not 0.6% negative only, if I remember correctly. If you are hinting at our JV partner, that is Vedanta and all that figure I can't talk. ONGC is standalone, pure standalone, means ONGC operated block, not ONGC jointly on blocks operated by someone else. Oil maybe we are -1% and gas we are 0.6%. Almost we are flat level. Our DUDP number was supposed to come from April only. Yeah?
Sir, I was referring to average production as well as the quarterly production. In this quarter, if we look at it, our gas production is down by 2.5%.
I gave you the reason. The projects are under commissioning. Many things, as I told you, wells are under opening and all that. We have to shut other wells to gradually open these wells. Anyway, these are technical things which may not worry. Whenever you commission something new, there will be temporary delay. This is something, this quarter is primarily attributable to that bit, 2% minus.
Sir, pardon me if it came across as somewhat, I don't know. I'm trying to put it as mildly as possible. If we look at even KG-DWN-98/2, the project is not delayed. I mean, it's severely delayed. I mean, we have been guiding in almost every quarter. Yes.
First of all, Mangei that too we gave you. We gave you a hint that we had a geological production. Right? Gas wells are yet to be opened because gas wells we could not open because platform was not ready.
Right.
got ready, then now connections are going on. Hopefully, we are hoping that July, August, we'll open those wells.
Yes, sir. I just wanted to have the guidance, therefore, for 2027 and 2028, in light of what you spoke about opening of wells in?
We can't give you exact numbers. Okay? That you have to appreciate.
Okay.
We can't give you because unfortunately, we give you a number, and we will cling on, and then you ultimately blame us. We are in E&P. It is called exploration and production.
No, sir. We are not going to hold you on to any specific number. If you can help us with some broad guidance, that will be helpful, sir.
What guidance I gave you. It will grow. Gas will grow. Mridul, let now ask some other questions to come up. Okay?
Sure. Second question.
You can join the queue later. Yeah.
Okay, sir.
Thank you.
Thank you, sir. Participants are requested to ask two questions in the initial round and may join the queue for more questions. The next question comes from Pranita Shetty from Morgan Stanley. Please go ahead.
Hello, sir. Could you hear me?
Yeah.
Sir, thank you for this opportunity. Really appreciate the detailed brief you gave earlier. It adds a lot of light to what we're trying to understand about the company. Sir, I had two questions. The first one is relating to discoveries. Could you throw some additional light on the discoveries what you mentioned earlier, the three discoveries in the brief what you had mentioned? Could you just add more clarity in terms of what is the potential production you're seeing there, and what could be the CapEx for these assets?
These are under appraisal. Okay. All I can say that the wells discovery flow rate, was to my mind, for western offshore, was fantastic. The three discovery that we have quoted you yesterday, two in western offshore and one in Assam, both the discovery is a fantastic flow rate, it has shown. Only thing is, unless we put some more wells nearby and assess the reserve size, we can't give you a definitive figure to how much we produce. We are now very bullish on these two discoveries because it is completely a different area. Frankly, we were not expecting this flow rate. Naturally, but we can't tell you the quantity because unless we have one or two more appraisal wells. In our industry, we appraise discoveries made.
After discovery, then you appraise by drilling some more wells to delineate the area. Then you assess the quantity. Once you assess the quantity, you develop a field development plan. You decide the CapEx. All I can say at this point in time, by Western offshore standards, it looks very promising. The quantity I will stay away from because that is not correct on my part to say without appraisal.
Sir, you'll be adding, let's say, another three exploratory wells there and giving us a more detailed.
Number I will give you. We are sure that it is worth developing, we can make that statement. What is the reserve size and what will be the facility size, we'll come to know only once we have the appraisal done. Appraisal done means one or two more wells. That is already under plan, it must be happening now.
Okay, sir. Thank you.
Thank you, ma'am. The next question comes from Randy Lau from Goldman Sachs. Please go ahead.
Am I audible?
Sir, you are-
Yes, you are audible.
Yeah.
Okay. Yeah, thanks for taking my questions. I have two questions today. For my first question, could you share some thoughts on why the government has not implemented any windfall taxes recently in spite of higher oil prices, and whether there is any expectations of such going forward? This is my first question.
You should ask government, not me. See, we are damned either side. Last time SAD government applied, everybody said the government is interfering too much. This time government has not applied, also you are not happy. It is good for ONGC because even when the crude price went up to $140, what you can infer from here, I think I would like to infer you that way, that government doesn't want to interfere with E&P sector. It wants to give full freedom to whatever, because you know our record, they want every drop to come out, whatever they can do, they have done. In fact, that not as I saying because government has appointed me, but because I'm saying because they didn't apply SAD despite so much of crisis and so much of loss to ONGC.
Otherwise, we were the first gas call guy to compensate partly by giving SAD other two expenditure, or even earlier times we have given discount up to INR 2 lakh crore in the previous time when 2013, 2014. Government didn't collect, but we directly gave the discount to our group of users in India. This time nothing like that happened. We got flat Brent. Even when it was $140, we also got $140. You should be happy, no? As an ONGC investor.
Yeah. Thank you, sir. Okay, for my second question, what are the recent features of the proposed APM gas pricing regulation from January 2027?
Pricing regulation as of now, I can't say about government. Government for this year, because it is supposed to be reviewed this year, because Kirit Parikh committee had asked for review in 2027. In a way, whether that review is required or not, that is a million-dollar question because we have already reached $7. $7 gas is our kitty next year will be out of total gas will not be more than 50%. If they review, well and good. If they don't review also, we have new well gas. The new well gas will keep replacing old well gas. Therefore, this journey of 10%-12% migration each year will happen. I think if we can revise it right now, we'll be more than happy, but at least directionally it is clear that government wants to compensate very handsomely to gas producers.
Look, I can't say on behalf of government that what government will do.
Thank you, sir. The next question comes from Varatharajan Sivasankaran from Antique Stock Broking. Please go ahead.
Thanks for the opportunity, sir. We are all quite enthused by the government support in the form of a relief from the royalty front. Is there also a plan from our side in terms of increasing exploration as development CapEx given this backdrop, sir?
It is premature, but intention, at least what we understand from various sources, that intention, of course, it is for government to take a call finally, that how much they will support. It looks like there is a big support for exploration and production coming from the new union budget.
Are we looking at increasing our CapEx, sir?
That depends on what contribution gets announced from there. We'll adjust our figure accordingly so that we continue to give you handsome dividend.
Very nice, sir. Secondly, in the case of discoveries and other new reserve replacement to ensure we have given the 2P reserves. Unfortunately, we don't have the baseline 2P reserves for the entire company to compare ourselves with. If you can provide that'll be useful with oil and gas.
Subsequently, we'll give you. Subsequently, after this call, we'll share with you.
Sure. Thank you.
Our baseline last year addition is 44. In fact, this year addition, 2025, 2026 addition is 44 million ton. We produced roughly 40 million ton of oil and gas, four is additional. You should be happy about last year performance. Base year will be the previous year performance, so when God has not given a size in the back.
Thank you, sir. Next question.
We will share with you. This nonetheless, we'll share with you. Yeah.
Next question comes from Amit Murarka from MOSL Financial Services. Please go ahead.
Yeah. Hi, this is Amit from Axis Capital. On CapEx, could you give a number as to what can we expect for FY 2027?
See, it remains generally 30 bound, because now 33, some will spill over 32, 32, something like that. If more CapEx we bring, more production comes, we will be happier to spend more. I am talking about E&P CapEx. Non-E&P CapEx is separate, because now one-third E&P CapEx goes in non-E&P side. We are not going in that ratio, this we talked about E&P CapEx.
Sure. ballpark, we are saying 33 E&P and then another 10, 11 non-E&P.
Yeah. If the good opportunity comes, you can take it. We have currently no plan, but some new business opportunity comes, we'll invest there up to 10.
Sure. Can you provide a KG-DWN-98/2 oil and gas run rate right now? Sorry, KG-DWN-98/2 oil and gas run rate.
Do you have numbers?
19.2.
19.2. Yeah. Currently it is 2.3. Based on offshore.
2.3 gas.
Once we open the well. Four or five. Yeah. It could be. He's asking about the current production. 2.3 gas and around 25.
24,000.
24,000 oil. Oil. Yeah.
I see that both have actually then dropped quite substantially from where we were one year or two years.
No. In fact, I told you that we had surprises. In fact, it is compartments. We have got a solution now in hand. We have to implement it. It should be back, because the reservoir proved to be different from what we thought.
What is the run rate you're targeting now?
It should come back to same level, but it will take around a year or so minimum, because we have to drill some wells.
Thank you, sir. The next question comes from Raj Gandhi from SBI Mutual Fund. Please go ahead.
Hi. Thanks for taking the question. Sir, just again trying to get some headway on the CapEx side. As you mentioned, you drilled 500 wells, out of which 100 was exploratory. What should be that annual run rate next two, three years, given the impetus on exploration that we are trying?
It depends on where government support comes.
Okay. Outside of deep water, how should we think about it? Maybe deep water is contingent on-
Outside of deep water will continue to be today. Last year, we drilled how many? Eight wells, I remember, deep water.
Eight.
Eight wells. No, it's not eight wells.
Deep water, four wells.
Four wells. Deep water, one well is equal to 100 wells of onshore.
Right.
That we have got maintain.
Where we are coming from is largely, let's say, if you were to see Oil India, they were at INR 4,000 crore run rate sometime back. Last two, three years, they have increased, and now they are riding at about a INR 10,000 crore run rate. From an overall CapEx perspective, we have seen about a 2.5x increase purely on the standalone oil and gas side.
In our side. Sorry for cutting you short, because we can't afford it. INR 30,000 crore, we can't make it INR 25,000 crore. Oil India possibly can afford it. I won't comment then.
Sure. Which is where we are trying to guess that, where will ONGC end up with on a run rate basis, given the impetus on exploration.
ONGC's own budget remains almost INR 31,003 32. Okay. Depending on if external support comes, then that much extra we'll do. Internal support side, CapEx will be around INR 30,000, INR 31,000.
Okay.
Thank you, sir. The next question comes from Vikash Kumar Jain from CLSA India. Please go ahead.
Good morning, sir. Thanks for taking my questions. I have a few of them. Firstly, on dry well write-offs. This was possibly your biggest quarterly write-off. Are there elements of some one or two really large wells? In terms of your overall exploration spend of INR 33,000 crore, how is that likely to be in FY 2027 versus how it was in FY 2026?
Our exploration spend is typically INR 8,000 crore-INR 10,000 crore per year. Just one sec. One answer is that we'll keep at same level, this year, in your last quarter write-off, it is not this abnormality has come from a very paper process. We had a write-off. We had a block, which government took it away, and where we had DSS4. We had drilled something, some well, and since we did not develop, because there were potential commerciality issue, the government took it back. In fact, we had to write it off because the asset itself went off. Therefore, we had no choice but to. That was around INR 1,500 crore. Huh. INR 1,800 crore. Our normal, whatever was there is normal. This one exceptional item came. I'm not saying exceptional item in true sense.
One-off.
One-off item came.
One-off. Not normal case.
Otherwise, you can be rest assured that you are in safe hands.
Of course, sir. I fully appreciate the challenges that, and uncertainty that exploration brings in and E&P brings in. Nonetheless, with our best understanding and best guesses, from whatever you have said, just to kind of build on to that, you said by September, October, all wells of Daman project will open up, and then soon after is when we will get to peak production. Should we take that as by December is a good guess on when you should get to about, what is the peak production? 500 MMSCMD, right?
No. Peak production typically is one year away. One, two year away. Correct?
Yes.
Minimum two year away because the reservoir takes time to mature, because the flow and all that. Typically, different field have different timelines. Definitely you can expect that good quantity will start flowing by then.
Okay.
Peak will be still away. The peak to average will be how much? That is geologist and reservoir guys to answer.
Peak production is still more a 2027 story or 2028, is it? 27 for Daman.
27 you can take it, but peak is again a statistical number, 0.08.
Sure.
is also peak changing.
Sure.
Peak, when peak will come, normally oil field has a gas field, has a 15-year profile, suppose it has.
Of course.
Third, fourth year it will peak, then remain plateau for seven, eight years, and then will decline. This is a typical growth, death cycle of a well.
The expected peak here is about 500 MMSCMD. Is that roughly the number that we are looking at?
Yeah, roughly. This project has some additional facility, which creates more production from existing wells, other project wells too, because of the suction that it creates. Well, this is a purely technical issue. From this project, you can expect five. 2028, 2029 to be precise.
Thank you, sir.
Okay.
The next question comes from Gagan Dixit from Elara Securities. Please go ahead.
Sir, thanks for taking my question, also thanks for giving the very elaborate description about the recent developments in that meeting this week. Sir, my question is about the CAPEX outlook. Sir, given that government is giving lots of incentives to the upstream companies, do we see the possibility that at least the exploration CAPEX will meaningfully increase in few years because that's the expectation I see created from the government side? Why I'm asking, I think two months back some news came in the media that ONGC sourced an INR 20 billion global tender for the deepwater rigs at least for the four to five years. That part, if you can throw some highlight about this CAPEX trajectory or changing CAPEX over the next few years.
Okay. First of all, it never said 20 rigs over what period of time. It can be 20 years, one rig, one year each, one rig each year. Okay? Second, I don't know from where they picked up that news, but I will not comment on that. I can certainly comment on two, three facts. That for next two years, we have to drill around 16, four plus eight, 12, plus three. 15, 16 deepwater wells. I can give you two, three-year visibility, and those will be drilled from our conventional budget, that every year we have been spending. Most likely, big money from government will start flowing from 2027, 2028. 2026, 2027, I don't see any big spending coming on government side because you must have seen Government has already started picking up the bill.
Government has already took, you see that has floated tender, two tender actually. One is for entire eastern offshore 2D survey, which is also going to be thousands and thousands of INR crores. Second one is, yesterday or the day before, it came, 3D seismic reprocessing. Government has already started picking up seismic. Well will not come this year, this I'm sure, because seismic will take some time. Based on seismic result only Government will decide what to assist, how much to give in which well. I'm sure that policy. Let Government documents come out. Government is not yet official. All Government is official about is they have floated two tenders from their city, from their office for seismic of big areas.
Right now, this year, we will fund from our own budget, because this is a conventional exploration budget, because we have provided for, and we have been providing for years together.
Sir, my second question is about, beyond this Mumbai High field, in this financial year, what are the prospects where you are working, where do you see the potential or at least see some possibility of some exploration where there is where this is a very high possibility based on your previous studies and you are working on the ground there?
Basically, you know that we have two-third, one-third there also. In ONGC E&P, two-third is offshore and one-third is onshore, production-wise. In fact, some numbers will come from Gujarat, because Gujarat roughly we produce 4.5 million tons. Some efforts are on for some-- Because every year we explore and some new wells are found, so that will get produced. Also enhanced oil recovery of Gujarat offsets are very high because we expect there. These are all, we can't quantify it, unfortunately, how much and all that. Basically, we will do everything possible to increase production, but how much and all that, we can't say. Two things I'll just retrace, that we have great hopes from some of the, particularly after this one last year discovery, that we'll try to develop as fast as possible.
Sure. Sir, my final question is about how much is the exploration rigs that are expected to be deployed this year as compared to the last year, especially in the offshore?
That question is very dangerous for us. Because what happens, the moment we answer, cartelization happens.
Okay.
I hope you should not ask this question because when supplier side gets all the information and then we end up paying more. That certainly you would not like, because you are also taking good share in your profit. Please do not encourage this number of rigs and all that. We play the card to suit the market. We can't clear the market by disclosing our numbers. In fact, but one thing I can share you, ONGC is the first company in the world whose tenders say now that minimum one rig, maximum we will decide depending on price. I think whether you have seen this pattern or not, last three tenders of rig is mentioning this language. We are also becoming unpredictable, like our reservoirs.
like.
You got my answer or no? What I'm trying to say, we will decide the rig depending on what price it gets quoted for. After all, we are taking our budget.
Thank you, sir.
That's right.
Next.
Yeah.
The next question comes from Probal Sen from ICICI Securities. Please go ahead.
Thank you for the opportunity, sir. I hope I'm audible.
Yes, please.
Yes, sir.
My first question was more regarding the propane. You mentioned that you're obviously on the way to sort of propane contract and this liquefaction, the two VLEC units. Can we get a little bit of granularity in terms of how much will the cost move once we actually start importing it there? What I mean to ask is that if today LNG-
I'll answer you. You'll get your answer very quickly.
Right.
In fact, imported ethane is $9 even today. $3 is Henry Hub, 1.15 you multiply, and then you have liquefaction and transportation. Typically, in $9, you're home. Against that, today, we are buying LNG from open market at $18 and new well gas at, if OPaL was allowed to buy, at $14. Today, this month, new well gas is $13.91. You got your answer in this figure?
Right, sir. If I can ask a small follow-up, what are the timelines we are looking at where we can sort of.
Twenty-eighth.
see the project going ahead?
Our ship will be here in 28th. Naturally, the moment we have ship, then import will start. Ethane quantity is not a problem in U.S. Only thing, ship is not there. Ship, Samsung is ordered on Samsung. Samsung delivery is December. December 28th is the delivery. December end we have the ship.
Got it.
28th.
FY 2029.
Yes.
When we can sort of start?
Yeah, exactly.
to formulate on that.
Exactly.
The second question, sir?
Yeah.
May I ask another?
Yeah. Please go ahead.
The other question was with respect to the western offshore and the entire TSP. If I can try to understand what was the decline rate for that entire region within the range before the TSP, and what do you expect it to be, let's say, by FY 2028, when you said that at least one to two years of work is required for meaningful results to start coming through? Now that the entire western offshore has been handed to or is going to be worked on by BP, by FY 2028, FY 2029, given that it is 60% of oil and 70% of gas, can we see a meaningful arresting of the entire decline rate for ONGC at a fair rate of return?
Yes. Answer is decline rate, not decline rate arrest and further growth. That is the commitment from next year.
Got it.
Okay. That is the commitment to the tender itself. The decline rate stops compared to the last year rate and growth happens. We have been struggling with the decline for the last 19 I'll give you some numbers, which will be of interest to you. Our ONGC peak production was in 1995, 1996 in western offshore, which was 39 MMtoe, oil plus gas. Last year, we had produced 26.18. It means roughly one-third of volume declined in the intervening period of 30 years. Okay. This is likely to go up from next year. Okay. With peak on 2031, 2032. I hope I clarified.
Thank you, sir. The next question comes from Vikas Jain, from CLSA India. Please go ahead.
Well, let me just ask the questions quickly so that we are not cut off, because these are some very important questions. Firstly is, we were talking about Daman itself. Your three MMSCMD additional that you suggested in new well gas going from nine to 12, should I assume that this is largely what Daman should possibly come, although it will peak next year, but the three MMSCMD roughly is what you hope will come?
Yes. Minimum three.
Minimum three will come.
Minimum.
Yeah. Sure. On KG Basin, I know there's a lot of language, the one that was there in the press release, something that you've put in as well. Just to understand that in a more clear way, the geological challenges that you faced or the surprise that you encountered was largely linked to the oil part or the liquid part of the production. The gas bit has just not started because of the delay in the platform.
Exactly.
The oil part is where you are going to handle that, and you've kind of figured out a solution. You'll have to possibly drill more wells, and maybe in about three, four quarters, you expect oil production to again go back to the kind of expected levels which it was. The gas bit is only going to pick up from after July, August. Is that understanding correct?
Yes. 100%. You're absolutely right.
Sure. The current gas production, which is at 2.3 MMSCMD, once more wells are added in July, August, how should I expect that to ramp up? Should I expect that by the end of this calendar, this will go to five or so, or even higher?
Having experienced 98/2, predictability is low. Definitely it can vary anywhere to anywhere. I am saying minimum to max. That number, I will leave it to you to guess. Definitely, it will be at least the minimum size also should be handsome for you.
Okay.
Numbers, no.
Thank you, sir.
Last time we gave you a number, and then you're all, "Exact number," and all that. Exact number we can't give, but we have some view, but geology is geology. God has created geology. Man has not created. We'll have to wait for the July, August to see.
Thank you, sir. The next question comes from Sabri Hazarika, sir, from Emkay Global. Please go ahead.
Yeah, good afternoon. Two questions. Firstly, in terms of your production uptick, so possibly Daman and KG 98/2 gas, so both of them will probably add up this year and DSF 2 from next year onwards. Against that, what could be the natural decline for the existing assets?
Yes, what you said is correct. This year, basically three major things. DSF is next year, 98/2 gas this year and DDP this year. You are right. Plus, you should also, one or two MMSCMD gas, there are multiple projects going on. Those we don't count because that's not counted in what we have explained to you.
Right, sir. This is against a natural decline of 7%-8%, is that right?
More or less, yes. Our natural decline is 7%-8%, but we compensate 3%-4% by interventions. 2%-3%, that number I gave you, that says it all. In almost 1995 to 2025, in 30 years, we lost one third. You can derive your own inference that how much we lose. Roughly 1% or 2% every year we lose. After setting off all the efforts of 7%-8% natural decline, 5%-6% we make up by all the means, and then 1% or 2% further falls. Unless new field comes in, new field came like DDP is a new field, DSF is a new field. Next year will be a bigger field than this. These all fields will add.
Old fields with old interventions, with all the conventional interventions, it is very difficult to hold on to even the current level. Naturally, I should say that basically 7%-8% decline is always kept at 1%-2%. That is something ONGC should be proud of.
Got it. Second question is on this Q4 results. C2, C3, C4 production as well as realizations earnings, that has fallen significantly. Was there anything exceptional during Q4?
You know the reason.
Because of the-
Because of the three reasons. In fact, because of this March we took a heavy. Every allocation got diverted towards something else. Naturally, RAP got reduced because the gas got diverted for making more and more LPG. LPG prices are lower than fuel.
OPaL was under 50.
OPaL operated only at 60% in March.
60? Less than 60.
Less than 60% in March.
This will continue in Q1 also, till the time that entire allocation thing gets normalized. Is that right?
OPaL is now working at what level?
Right now 60, but we are planning to start the operation by this month.
Right now it's 60, but I'm told that it will be at 80, 85 within four, five days, because something has been lined up.
Even the standalone C2, C3, C4 will recover or that will remain at the Q4 levels only or March level? Yeah, both the things are completely connected. The entire C2, C3, C4 reported in the standalone business goes to OPaL only.
C2, C4, they are not running on gas as we speak as of now.
No. He's asking about the RAP of-
RAP of C2.
Some quantity got diverted because for LPG.
LPG do not cover.
That we will not know till the West Asia crisis is over.
Okay, fair enough. Got it. Thank you so much, and all the best.
Okay.
Next question comes from Vikash Kumar Jain. Please go ahead.
Sorry, I keep getting pushed out. One thing that you missed out.
You chose to. You get pushed out or you chose to get some other call. Many times we also do this.
No, the operators keep shutting me out.
Okay.
Brazil, there's some update there as well in the Sergipe-Alagoas thing. Could you please share that bit as well? Also on this-
That, now I'll ask MD OVL to explain.
I can explain, sir.
What is the question?
Sergipe-Alagoas, sir.
BM-SEAL-4, as we call it's in Sergipe-Alagoas Basin. We had exploration success some time back, and now FID has been taken, FPSO has been contracted, and we are going ahead with the development. We should get 1.3 million ton net to OVL additional production by 2030. 2030 and 2031. First oil in 2030 and gas in 2031.
1.3 million ton oil equivalent, you said, is the net share. That's for the 25%.
Per annum.
Yeah, that's the 25% for you, right?
Yes.
Okay. Sir, DSF, that you said could add another 4-5 MMSCMD to gas production, and that be free pricing. That's roughly, when are you expecting that? Is it FY 2028 or?
Yes. FY 2028, sir. It can't get delayed further. It is got delayed because different reason, but definitely 2028, yes.
Okay. This ramp-up is likely to be quicker because this is less complicated geologically, is that it?
Yeah, it is. It is a known thing.
Onshore.
It is more predictable.
Sure. Yeah, that's what I meant. Okay. Okay, sir. Thank you.
Thank you, sir.
We're done with all the questions.
Next question comes from Nitin. Please go ahead.
Hi, sir. Thanks for the opportunity again. Just a bookkeeping one from my end this time. Our operating expenses are higher in this quarter and also for the year. You did mention the GST bit. Are there any one-offs in this quarter particularly? As against our regular run rate of about INR 5,500 crore-INR 6,000 crore, we are at almost INR 9,000 crore of operating expenses.
Operating. For Q4, the GST on royalty, DHR additional charge Director (Finance) has already explained, that is around INR 235 crores and INR 262 crores relating to KG-DWN-98/2 umbilical written-off as per the opinion of ICAI. We have to make the provision for old outstanding recoverable also INR 257 crores, and one provision for stores and spares around INR 280 crores. These are the exceptional items, one-off items, which resulted in Q4 operating expenses higher.
If all this is added up, it's just about INR 1,000 odd crore. As I said, last quarter operating expenses were INR 6,500. Now we are at INR 9,200. Is there anything else that we are missing over here?
Other thing is the GST impact as Chairman sir has already told from 12%-18%, it has increased. The other thing is exchange rate fluctuation with INR depreciated by 11%. That has also impacted the operating expenses.
Great, sir. Thanks a lot. Lastly, before I let you all go, if you can give us a regional breakup of your CapEx spend, if that's possible. How much are we going to spend onshore and how much offshore, specifically western offshore? You've given out the exploratory number. How much of this would be in development and IOR, UR program? The INR 30,000 crore you spoke about.
70/30. 70/30 is offshore/onshore ratio.
Okay. Any number you can give me, sir, for western offshore?
Largely 70% you can say that it is western offshore only because we have hardly one or two wells, maximum two, three wells in 98/2. Most of the money will go to western offshore only because western offshore is more even for us.
Sure, sir. Thank you so much.
Next question comes from Mayank Maheshwari from Morgan Stanley. Please go ahead.
Hello, sir. Thanks for the call. I was just focusing on the cost side. You had a great reserve replacement ratio this year as well. In terms of cost structure, if I was to think about, you have been highlighting of how you are focusing on reducing operating costs, specifically on CapEx cost. In a dollar per BOE basis, can you just give us a sense of what was the region in terms of cost saving initiatives that helped you in fiscal 2026, and what are you thinking for fiscal 2027? Specifically with the BP tie-up, is there any cost savings that we should be thinking about?
We had a INR 5,000 crore plan per phase. We have another INR 5,000 crore we'll have to convert into per barrel.
About INR 500 million for 40 million ton.
INR 500 million.
40 million ton.
40 million tons. 40 million tons to five, how much is it? 40 million tons, 10.
INR 1.8 per BOE roughly.
Yeah.
If I may add, many of the questions that all of you have been asking are pertinent. Rajarshi Gupta, MD OVL, just because I'm seeing the international part. When you look at the Indian part, we track all this in INR, there's a discord because when we see spends in USD and these accounts are in INR there has been a significant depreciation. These numbers become different when you look at it. That should be kept in mind.
That's why I was thinking about it more from a dollar per BOE basis rather than rupee or anything of that sort.
We'll have to discount the rupee depreciation. We had some INR 5,000 crore is in the Indian rupee we had spent. Most of it, we have realized almost INR 4,000 crore, but we got negated by two things, that is dollar exchange rate and GST. GST 12 became 18. We are on course as we continue to do. We have another INR 5,000 crore lined up. It will take around a year or so more to realize because the effort you make today, results will come later. Cost side, we are now very comfortable.
Yes, sir.
Thank you, sir.
Yes.
That would be the last question for the day. Now I hand over the floor to Shri Yogish Nayak for closing comments.
Good afternoon. We hope we have answered all the queries from the participants. In case if any further queries are there, they can reach out to our investor relations cell. I thank Chairman and CEO for addressing the participants and answering all the queries of the participants. I also thank MD OVL, DF OVL, DHR and additional charge Finance, ONGC, and all my senior colleagues for participating, and also all the participants for participating in this conversation. Thank you.
Thank you.
Thank you. Have a great day. Thank you.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Booth Abbas Conference Call Service. You may disconnect your lines now. Thank you, and have a pleasant day.