ONGC expects oil prices at $60–$65/bbl over next three years, Q2 production rise

State-run oil explorer Oil and Natural Gas Corporation Ltd (ONGC) on Monday (October 13) said it expects oil prices to remain between $60 and $65 per barrel over the next three years and does not foresee

prices falling below $60/bbl in the near term.

The company reported an increase in oil production in Q2, reversing the previous trend of output decline. ONGC management stated that cost reduction efforts have been ongoing for over a year.

The company also plans to implement a hub-and-spoke model in collaboration with BP, having identified six hubs for strategic operations.

First Quarter Results

ONGC reported a 9% decline in its overall topline on a quarter-on-quarter basis to ₹32,002 crore, which is higher than the CNBC-TV18 poll of ₹31,289 crore.

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The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter declined by 2% from last year to ₹18,657 crore, which also turned out to be higher than the CNBC-TV18 poll estimate of ₹17,001 crore.

Net profit for the period increased by 24% from the March quarter to ₹8,024 crore, higher than the poll estimate of ₹7,851 crore. Crude production during the quarter remained flat both when compared to last year and the previous quarter at 5.24 million metric tonnes. The figure was in line with expectations.

Average daily production for ONGC stood at 4.22 lakh barrels per day, which is down 1% from the March quarter, adjusting for one extra day during the quarter. This decline comes after production increased for two quarters in a row.

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Shares of Oil and Natural Gas Corporation Ltd ended at ₹244.00, down by ₹2.34, or 0.95%, on the BSE.