Daily Expert News
No Result
View All Result
Sunday, May 22, 2022
  • Login
  • Register
  • Home
  • World
  • Economy
  • Business
  • Markets
  • Arts & Culture
  • Education & Career
  • India
  • Politics
  • Top Stories
Daily Expert News
  • Home
  • World
  • Economy
  • Business
  • Markets
  • Arts & Culture
  • Education & Career
  • India
  • Politics
  • Top Stories
No Result
View All Result
Daily Expert News
No Result
View All Result
  • Home
  • World
  • Economy
  • Business
  • Markets
  • Arts & Culture
  • Education & Career
  • India
  • Politics
  • Top Stories
Home Business

ONGC sees $3 billion in profits, relies $1.5 billion on gas price hike: Report

by Nick Erickson
April 3, 2022
in Business
128 5
0
NDTV News
152
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter
ADVERTISEMENT
ADVERTISEMENT


ONGC, Reliance revenues rise as gas price rises

New Delhi:

The state-owned Oil and Natural Gas Corporation (ONGC) is likely to see its annual revenues increase by $3 billion (about Rs 23,000 crore) from more than doubling the price of natural gas it produces, while Reliance Industries may see $1.5 billion will gain (Rs 11,500 crore) more revenue, according to a report.

The government increased the gas price paid to oil and regulated field producers from $2.9 per million British thermal units to $6.10, a record high from April 1. For difficult fields, such as Reliance deep-sea fields, the price is up 62 percent to $9.92 per mmBtu (UK thermal unit).

“A three-pronged deficit in oil markets (inventory, capital expenditure and spare capacity) coupled with rising domestic gas production after nearly a decade of declines is setting the stage for a supercycle in profitability,” Morgan Stanley said in a note.

Gas accounts for 58 percent of domestic gas production for ONGC, and every $1 per mmBtu change in gas price affects ONGC’s revenues by 5-8 percent.

“We foresee a $3 billion increase in earnings in 2022-23 (April 2022 to March 2023) and, more importantly, an improvement in ROCE to above 20 percent after more than a decade,” it said.

Gas prices for difficult fields (deep water, ultra-deep water and high-pressure areas with high temperatures) have increased by $3.8 per mmBtu to $9.9 and will apply to the production of ONGC of KG-DWN-98/2, which are expected to contribute about 14 percent of domestic gas production by 2023-2024.

Reliance’s gas production from its deep-sea KG-D6 field has reached 18 million standard cubic meters per day, which is expected to increase to 27 mmscmd in 2023-24, with an increase in production from new and existing clusters.

“We expect a profit increase of $1.5 billion with gas price increases in 2022-23,” it said.

Morgan Stanley forecast a further 25 percent gain in its next review scheduled for October 2022, as tight inventories keep four global benchmark prices at high levels.

India sets domestic gas tariffs based on a formula that uses prices from the past 12 months at the global gas hubs NBP, Henry Hub, Alberta and Russia Gas.

In a note, IIFL said that despite the price adjustment, domestic gas prices are 45-50 percent lower than land prices of imported LNG. “Politics will be tested in the second half of 2022-23 (October 2022 to March 2023), when a similar price increase is expected.”

The rise in gas prices bodes well for ONGC, Oil India Limited (OIL) and Reliance, which account for the bulk of India’s domestic gas production.

Hetal Gandhi, director of Crisil Research, said that with improving investment in production infrastructure, domestically produced gas is currently helping to meet nearly 50 percent of annual domestic demand. Based on an allocation system followed by the government, the main consumers of domestic gas are the town gas distribution sector (including CNG and domestic PNG), fertilizers and electricity.

“The increase is expected to affect the town gas distribution (CGD) entities as it will drive up domestic prices of compressed natural gas (CNG) and natural gas pipelined to kitchens. We do not expect substantial demand erosion from the transportation sector as CNG will to do.” are still competitive compared to petrol and diesel. We also expect domestic PNG to remain competitive against domestic LPG despite any price increase. However, the margins of CGD entities will be significantly impacted, with a contraction of 300 basis points in fiscal 2023,” he said.

Higher gas prices will also further increase the government subsidy for fertilizer from Rs 14,000 crore last fiscal year, which saw a significant increase.

“The increase, which comes at a time when relations between Russia and Europe over gas supply have deteriorated, will be controllable for natural gas prices and therefore for the imported part of the fuel, which affects sectors such as industrial PNG, refineries and petrochemicals.” he added.

ADVERTISEMENT
ADVERTISEMENT
Tags: billionDailyExpertNewsgashikeONGCPriceProfitsreliesReportsees

Get real time update about this post categories directly on your device, subscribe now.

Unsubscribe
ADVERTISEMENT

Related Posts

NDTV News
Business

Petrol dealers urge oil companies to restore diesel supply

May 21, 2022
NDTV News
Business

Nirmala Sitharaman urges states to cut fuel tax after tax cut

May 21, 2022
NDTV News
Business

Shree Cement’s March Profit Drops 16% YoY to Rs 645 Crore

May 21, 2022
Prison, Fine Of Up To Rs 20 Crore: Details From India
Business

Portugal will soon start taxing cryptocurrencies

May 21, 2022
NDTV News
Business

Foreign Portfolio Investors Withdraw More Than Rs 35,000 Crore in May

May 21, 2022
All That You Need To Know About Crypto Credit Cards
Business

How to protect your crypto assets from stock market bankruptcy?

May 21, 2022
  • Trending
  • Comments
  • Latest
Live updates: Russia invades Ukraine

Ukraine pledges ‘immediate investigation’ after video surfaced of soldiers shooting Russian prisoners

March 28, 2022
An Anaconda's Playdate With Dolphins Took a Strange Turn

An Anaconda’s Playdate With Dolphins Took a Strange Turn

May 2, 2022
'Better Call Saul' Season 6, Episode 2: Do the Hustle

‘Better Call Saul’ Season 6, Episode 2: Do the Hustle

April 19, 2022
And now the $200,000 facelift

And now the $200,000 facelift

May 3, 2022

Hello world!

0
NDTV News

IT startup Fareye aims to change Unicorn within a year, founder says

0
How did Stephanie Murphy, a holdout on Biden's agenda, help save it?

How did Stephanie Murphy, a holdout on Biden’s agenda, help save it?

0
How did Stephanie Murphy, a holdout on Biden's agenda, help save it?

How did Stephanie Murphy, a holdout on Biden’s agenda, help save it?

0
'I am one of the favorite players to win Roland Garros': the meteoric rise of 19-year-old Carlos Alcaraz

‘I am one of the favorite players to win Roland Garros’: the meteoric rise of 19-year-old Carlos Alcaraz

May 22, 2022
Early Voting Wins Preakness Stakes

Early Voting Wins Preakness Stakes

May 21, 2022
The Root of Haiti's Misery: Reparations to Slaves

The Root of Haiti’s Misery: Reparations to Slaves

May 21, 2022
Tiger Woods struggles in his worst PGA Championship round of his career, shooting a nine-over par 79

Tiger Woods struggles in his worst PGA Championship round of his career, shooting a nine-over par 79

May 21, 2022
ADVERTISEMENT

Recent News

'I am one of the favorite players to win Roland Garros': the meteoric rise of 19-year-old Carlos Alcaraz

‘I am one of the favorite players to win Roland Garros’: the meteoric rise of 19-year-old Carlos Alcaraz

May 22, 2022
Early Voting Wins Preakness Stakes

Early Voting Wins Preakness Stakes

May 21, 2022

Categories

  • Africa
  • Americas
  • art-design
  • Arts
  • Asia Pacific
  • Astrology News
  • books
  • Books News
  • Business
  • Cricket
  • Cryptocurrency
  • Dance
  • Dining and Wine
  • Economy
  • Education & Career
  • Europe
  • Fashion
  • Food
  • Football
  • Gadget
  • Gaming
  • Golf
  • Health
  • Hot News
  • India
  • Indians Abroad
  • Lifestyle
  • Markets
  • Middle East
  • Most Shared
  • Motorsport
  • Movie
  • Music
  • New York
  • Opinion
  • Politics
  • press release
  • Real Estate
  • Review
  • Science & Space
  • Sports
  • Sunday Book Review
  • Tax News
  • Technology
  • Television
  • Tennis
  • Theater
  • Top Movie Reviews
  • Top Stories
  • Travel
  • Uncategorized
  • Web Series
  • World

Site Navigation

  • Home
  • Advertisement
  • Contact Us
  • Privacy & Policy
  • Other Links

We bring you the Breaking News,Latest Stories,World News, Business News, Political News, Technology News, Science News, Entertainment News, Sports News, Opinion News and much more from all over the world

©Copyright DailyExpertNews 2022

No Result
View All Result
  • Contact Us
  • Home
  • Top Stories
  • World
  • Economy
  • Business
  • Opinion
  • Markets
  • India
  • Education & Career
  • Arts
  • Advertisement
  • Tax News
  • Markets

©Copyright DailyExpertNews 2022

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.