MUMBAI (NewsRise) -- State-owned Oil & Natural Gas Corp. reported a better-than expected 65% jump in third-quarter net profit, as higher gas production helped India's biggest energy explorer offset the impact of weak oil prices.
The company's gas output hit a record high in the quarter on the back of a string of new projects and discoveries. The surge in output is in line with the government's move to increase the share of clean burning natural gas to 15% from 6% in a bid to cut down pollution. The gains in gas production also helped ONGC tide over a 40% slump in crude oil prices from their peak in October.
ONGC's profit for the quarter ended in December stood at 82.63 billion rupees ($1.16 billion), the company said in a statement. Analysts were expecting a net profit of 73.71 billion rupees, according to Refinitiv data. Revenue rose 20.4% to 276.94 billion rupees, while total expenses rose 7% to 178.56 billion rupees.
ONGC, which accounts for more than 60% of the domestic crude production, has been witnessing a slowdown over the past several months as key wells operated by the explorer failed to generate major output. Stiff competition from private players has also a cast a shadow over the company's efforts to bid for new domestic blocks. Of the 55 blocks that were auctioned by New Delhi under the first round of its new and liberalised regime - Open Acreage Licensing Policy - ONGC bid for 37 blocks but barely managed to win two.
The company faces aggressive competition from private player Vedanta which won 41 oil and gas blocks in the auction. Last month, Vedanta's billionaire chairman Anil Agarwal said his company will invest 600 billion rupees in India in the next three years. It is also planning to invest $3 billion in its oil and gas business.
ONGC said its proposed share buyback is likely to be completed in February. Its board proposed an interim dividend of 5.25 rupees a share.
Shares of ONGC closed 1.1% lower at 132.10 rupees in Mumbai trading on Thursday, while the benchmark S&P BSE Sensex closed 0.4% lower.