ONGC posts record Rs 50 billion profit in 2000-01
By Harish Rao
India's oil exploration and production behemoth, ONGC, has created a record of sorts. It is the first Indian company to have posted a profit of over Rs 50 billion for the year ending March 2001. The profit for the year would have been still higher, by as much as Rs 4 billion, but for the company changing its policy on accounting of exploratory wells. Firm trend in the international crude oil market enabled the oil major to gilt-plate its bottom line.
Production of crude has remained virtually unchanged over the last three years. The company has embarked on a series of measures including accelerating exploration in the deep-sea beds for improving its performance. The removal of the administered price mechanism is expected to help the company even more as it will be getting full benefit of the prevailing international price.
With a cash generation of over Rs 11,000 crore during the last two years the company should not find any difficulty in funding its capital expenditure which is pegged at Rs 20,000 crore during the next five years.
Incidentally, the company has given up its earlier plan to diversify into downstream projects like petroleum refining and concentrate solely on exploration and production especially deep-sea exploration. Recently, the company along with its partners bagged 16 of the 23 oil blocks under NELP-II.