The Hindu : IOC Q3 net spurts

Online edition of India's National Newspaper
Sunday, Feb 01, 2004

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Business

IOC Q3 net spurts

By Our Special Correspondent

NEW DELHI, JAN. 31. India's largest energy company, the Indian Oil Corporation (IOC) recorded a 31.67 per cent rise in net profit at Rs. 5,155 crores during the first nine months of the current fiscal against Rs. 3,916 crores in the same period last year. The steep increase is largely due to spurt in net profit during the third quarter (October - December 2003) to Rs. 2,403 crores from Rs. 777 crores in the same period of the previous year.

Giving reasons for the buoyant results, IOC Chairman, M. S. Ramachandran, told newspersons after the company's board meeting today that this was mainly due to increase in average gross refining margins. The refining margins are the difference between prices of crude oil and petroleum product prices. As against an average refining margin of $2.79 a barrel in April-December 2002, the company achieved a margin of $3.99 a barrel in the first nine months of the current fiscal. He expected the year to end with an average refining margin of about $5 a barrel as compared to $4 barrel in the previous year.

In addition, he said the company was compensated for subsidy on kerosene and LPG under the new formula evolved by the government. As a result, IOC was paid Rs. 1,100 crores by the Oil and Natural Gas Corporation (ONGC) and the Gas Authority of India Limited (GAIL) during October-December period, leading to a huge rise in profitability for the third quarter. The total under-recoveries due to LPG and kerosene were estimated at Rs. 3,300 crores, of which two thirds were borne by IOC and the remainder by ONGC and GAIL.

Asked about imports from Iraq, he said India would be importing five million tonnes of Basra light crude from that country during 2003-04, though the initial contract is for six months.

In the current fiscal, IOC has already imported 1.19 million tonnes and another 1.25 million tonnes of crude will arrive till March, bringing the total to 2.44 million tonnes. As for exports, he said these were likely to touch 1.6 million tonnes of products during the current fiscal against one million tonnes last year. For the next year, IOC has set a target of two million tonnes of exports which will largely be to Sri Lanka.

The IOC chief said the board had also decided to buy 35 per cent equity stake from Premier Oil for the Cachar oil and gas exploration block in Assam at a cost of $3.5 million. Premier would retain 49 per cent equity stake and other partners in the venture include Essar with 16 per cent stake.

The block is estimated to have recoverable reserves of 3-5 trillion cubic feet of gas and 175 million barrels of oil, according to a foreign consultant.

According to the unaudited financial results, the company's gross turnover for the third quarter rose by 10 per cent to Rs. 33,550 crores from Rs. 30,625 crores during the same period in the last fiscal.

For the nine month period from April to December 2003-04, the turnover rose by 8 per cent to reach Rs. 94,156 crores from Rs. 87,288 crores.

IOC refineries also achieved a higher throughput of 27.26 million tonnes against 25.96 million tonnes in the first three quarters of the previous fiscal. Pipeline throughput also rose from 30.60 million tonnes to 33.31 million tonnes while it sold 35.58 million tonnes of petroleum products.

140 p.c. interim from ONGC

ONGC has announced an interim dividend of 140 per cent for the year ending March 31, 2004. The company has posted a net profit of Rs. 1,719 crores despite accounting for subsidies on LPG and SKO (superior kerosene oil) in the third quarter ended December 31, 2003. The turnover was Rs. 7,354 crores.

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