Oil India Limited (OIL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to All India Q1 FY27 earnings call. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kishan Mundra from Dam Capital. Thank you, and over to you, sir.

Hi. Thanks, Atarva. Good afternoon, everyone, and a warm welcome to the Q1FI 27 Earnings Call of Oil India. And to discuss the results, we have the management with us, which is represented by Mr. Abhijit Majumdar, who is the Director of Finance, Mr. Saloma Yomdo, Director of Exploration and Development, Mr. Tralukia Burgohen, Director of Operations, Mr. Bhaskar Jyoti Fukun, MDNRL, Mr. Ajay Kumar Sahu, ED Company Secretary, Mr. Raghunath Nishra, ED Business Development, and Mr. Abhijit Das, CGM Finance and Account. At this point, I will hand over the floor to the management for their opening remarks, post which we will open the floor for the Q&A. With that, over to you, sir.

Thank you, Mr. Kishan. Good afternoon, ladies and gentlemen. I would like to thank Dan Capital for hosting today's investor and analyst con call for Oil India Limited. I'm Abhijit Majumdar, Director of Finance of your company. I am happy to inform the investor community that I am joined by my colleagues on the board. Mr. Salama Iomdo, Director of Exploration and Development, Oil India Limited. Mr. Trilofko Pura Gohani, Director of Operations, Oil. Mr. Bhaskar Jaki Fookan, MDNRL. Mr. Ajay Kumar Sahu, ED Company Secretary, Oil. Mr. Raghunath Mishra, ED Business Development, and Mr. Abhijit Daj, CGM F&A, and Ciro. On behalf of the management, I welcome you to our Q1 2627 earnings call, covering the period April 26th to 30th of June 26th. The financial results were approved by the board and duly published on 7th August 2026. Based on statutory requirements. It gives me great pleasure to welcome our esteemed shareholders and members of the analyst community. I am very pleased to inform you all that this quarter has been a great quarter. As far as the company is concerned, the company has achieved. Stupendous milestones on several parameters, which all will be covered in the presentation that will follow. Your continued support, engagement, and valuable insights inspire us to pursue excellence in execution, uphold the highest standards of accountability, and create enduring value through sustainable growth. During the first quarter of 2026-27, our performance reflects the strength of our operation and foundation. We maintain steady progress across all core business activities, advanced our drilling and development programs, and continue to uphold the disciplined approach to financial management. These efforts underscore our commitment to delivering consistent growth while creating enduring value for all stakeholders. So I will now hand over to Chief Industrial Relations Officer, Mr. Abhijit Das, who will provide an overview of the first quarter performance. Thank you.

Thank you, dear. Good afternoon, ladies and gentlemen, who have joined us on this call. I take this opportunity to share Oil India's operational and financial highlight and the performance of our material subsidiary, NRL. From operational point of view, we have achieved 1.707 billion oil and oil equivalent of production during this quarter. The crude oil production for the quarter was 0.95 mmT. It has increased by 11 plus percent. Daily crude oil production has ramped up to 10,921 empty per day on 27th of June, 2026. The company has drilled 17 new wells during the quarter of Per share stood at 17.65 per share. Thank you. The company has reported the operating revenue of 12,886 crore and registered... Fundamentals. This is an unlocking long term. This is my remark.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch room telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Probal Sen from ICICI Securities. Please go ahead.

Thank you for the opportunity, sir. Very good afternoon, and congratulations on a good set of numbers. Firstly, just a clarification when you mentioned about the production reaching 10,921 tons of oil per day on the 27th June. Just wanted to understand what is the run rate right now for the second quarter as such? I mean, can we expect it to sort of ramp up and maintain at this level, or, you know, because basically we just want to get some understanding.

So, this is... Thank you for the question. I am requesting Director Operations to respond to the question.

So, this is Tariqo Bornava, Director Operations. As you have seen, we are ramping up our production. This quarter, one of the finest production we got, but as of now also, we are increasing our production. Because we are doing well in all the three forms. You can see that the first one is the well intervention and workover activities. Earlier days, we didn't get such good workover results, and we have done many systemic improvements in terms of workover. Like, we have now have a good practice in place, which is called HW High-Level Workover Program Committee, Planning Committee. So, this is called Planning Board Meeting, HWPMB. Now, what we do is that myself, along with Director of Expression and Development also sits together, and do it very, very in an integrated manner, the selection of the world, everything. Also, on the other hand, we have one particular aspect called, that is done by Director of Exploration and Development, but where I am also in my team, that is called EDPNB, Exploration and Development Portfolio Management Board, similar to workover and production area, we do for new ones. So, where I am also an inventor. So, now the things are a little bit different. It is not done in earlier days. We are doing it in a very, very integrated manner, along with expression and development. So, you can see that we are doing very well in all the three parts, including workover, well intervention, and also, well, optimization and drilling. So, at present, we are on a path where we can see that we are closing, going to achieve close to 1 mmC each quarter, this year. The rest of the quarter, we are having 1 mmC. Now, you are getting 0.950, 0.950 mmC. We are going to achieve, most probably, by this quarter, we should achieve, if everything remains, you call, Saturday's 40 bucks. Then, given everything going good and nothing adverse happens in the field, we expect that we will be reaching 1 MMT every quarter from now onwards. So, let's see, we are keeping our fingers crossed. This is what I can tell you, and as of now, After death, production, we have mentioned 10,921. For the last quarter, we have increased into 11,017. We want to increase our production, that's what I can tell as of today. And maybe it led to an explosion development also.

Thank you, sir. The second question was with respect to gas production. Now, I do understand that there are still some monetization challenges. If you can update us a little bit in terms of the progress of the monetization downstream pipelines that are under different stages of implementation, and when can we expect maybe a ramp-up back to the 0.85, 0.86 BCM levels, you know, or rather 0.8, 0.83 BCM levels that we were doing earlier. That will be very helpful.

Actually, there are many hiccups that have happened because of the shutdown of the downstream industries. This is because of the BCPL took shutdown and at some point of time, maybe, it means this is a yearly shutdown they take. The other thing is that seasonal variation will also come now because from October 1st, they will take a little bit of less than what we are doing as of now. So, on an average, what we are expecting is that if this pipeline comes, then we will have the evacuation bottleneck run out of this whole story. So, by next year, we are expecting that all the facilities will be done. And if we talk about gas by 2028, We will be having all the pipeline averaging ready, and it will go to the rest of India, whatever guests we have. We have additional guests. We are planning to send our additional guests, whatever, 3.5 to 4 mm SCMD, we will be able to market from that area. So, that is, we are planning, we are thinking that it will be by around December 2027, it will happen. Also, DSPR also, one small thing is there, around 200 meters of lines actually is required to be laid inside an NRL. Now, you know, DSPR has got a new mandate from the government, PNGR has given them, and a common carrier. Now, what will happen? When NRL, if there is less insect in NRL, then we can put it into the main line and put it into the IgGL. And when an IgGL can distribute it in the rest of it, places they are doing, like to any IgGL and also for the varipayl in lower assam. So, this is going on. This will take a few months, two or three months, maybe, maximum. Once it is done, Then, we will have more evacuation of gas from the present capacity also.

Got it, sir. So, what I understand is FI 20 would like to...

In fact, in the past as well, we have transported gas beyond energy. Formalizing.

So, if I understand correctly, FI27 and maybe H1, FI28 may see slightly flattish or slower improvement, and then a big jump can be expected maybe by the third or fourth quarter of FI28 in terms of achieving our long-term target of getting to 5 BCM.

20th, first quarter.

Got it.

Big jump happens in 20th, first quarter.

Last question, if I may.

No, I said 20 and 29 were made.

We'll have an additional 1.5 MMSTMD by virtue of NRL coming up. This will be in this financial year.

So that? That augmentation already run.

Thank you. Thank you. One MMSCD to two MMSCD to immediately, and thereafter up to 2.5. So they were requesting for a shutdown because of the geopolitical thing, because it was also, it would have resulted also in a shutdown of the Nomoliga refinery, and we needed diesel and petrol badly because of the geopolitical situation. We were not being allowed to give the shutdown to them. Now that the things have used and we can do away with the shutdown because we can operate. This is 200-meter connectivity, which is going to come in 2-3 months' time. Let's turn down to DNPL. Good morning, bye. The NRL can also be given to the national grid. I will get perhaps in the last second or third quarter of next financial year, but before that also, this 1.5 MMSTD can find their way to national grid. That is the limited point that I wanted to make.

I understood, sir. If I can just sum it up, I don't have any other questions. So, if I look at 1.5 MMSEMB, that translates to maybe about 0.5 BCM coming through gradually over calendar year 2027 as NRL's commissioning is done and the 200-meter connectivity is done. And then when all the other pipelines are in place, another 2.5 to 3 MMSEMB or 2 MMSEMB can come through, which is essentially another that 1.5 BCM. That is how we go from currently 2.93 BCM to somewhere around 5 BCM by FI 29. Is that the proper way to sum it up?

Yes. I think that's the correct understanding.

All right. Perfect. Thank you so much. I'll come back if I have no questions. Then all the best.

Thank you. The next question comes from the line of Vivekananda from Ambit Capital. Please go ahead.

Yeah. Hello. Thank you for the opportunity. So, Dr. Ranjit, two questions. So, the recent regulatory changes that have...

Our CMD, sir, is not attending this con call.

I see, I see. Okay. Apologies.

The rest of the board is on here.

So, yes, yes. Mr. Abhijit, yes, my question to you is on the recent regulatory changes and budgetary support that has been given to the upstream sector. How should one look at this in the context of your CAPEX program for the next couple of years? Because my understanding is that you have drilled around 25 exploratory wells last year. Just to help us understand how your exploration program will look like in FY27 and FY28, both in terms of wells drilled as well as in terms of capital outlay. Considering the reimbursement that the government is giving, that is question one. The second question, I see that NRL has reported an exceptionally high GRM, and this, I believe, would include some inventory gains. Could you help us understand the normalized GRM that NRL reported this quarter? Because we understand 1QFI26 had refining losses, and this quarter is likely to have had refining, sorry, inventory gains. Thank you very much.

I am requesting UG, sir, to take.

27-28, and how we are going to support. Yes. Whatever wells that we are drilling primarily in onshore is from our own resources, but you see that the current acreage holding that we have, about 55% of them are in offshore, and the chunk of them are in deep offshore and after deep offshore. So with the new PNG rules, which have been... For example, The block is extending beyond your... which has been announced. Thank you very much. And so with this, especially for deep water and outer deep water, we have already worked out and chalked out a plan where we have identified how many wells will be drilling in the deep water and outer deep water in the next couple of years, especially since we have already acquired the vintage 2D and 3D data, and they are currently being processed and interpreted. In the deep waters and other deep waters of Mahanagi and Kegi, we have already acquired, completed 4,200 land kilometers and 5,300 square kilometers of 3D data within a year of the PL being awarded to us. So by January, we'll be finishing the seismic equation processing interpretation of the Mahanagi and Kegi basins, which is roughly about 40,000 square kilometers. As of now, we have already identified possible prospects to be drilled, and that is the reason why we have already gended out the rig requirements. So the first rig is going to come in June, July 27, and the second rig is going to come by March 28. And that will kick-start our deepwater exploration campaign. And... One well we are also going to drill next year in Mahanadi, but that is also going to be sponsored by the government. 800 crores will be sponsored as part of the stratigraphic well campaign. And then the other wells we are going to take up through the Samudra Mantan. Well, they'll be supporting us with the funds. And most importantly, we are also de-risking these prospects to be drilled because apart from our in-house and external consultants, Total is also looking at this data in each and every detail and advising us. And now Petrobras have also come on board. They will also be doing an independent interpretation of this data. So that they will also come up with their own independent interpretation. So this is in broad, what is the outlet that we have for us in the next coming years? Dr. Razaj, question?

Yes, just about small follow-ups. So one is how much APEX did you incur in 1Q? And if you can give a bit more details about the... Wells drilled, how many were exploratory last year? My understanding is around 24. How many exploratory wells are you planning to drill this year? And if you can give a break up of onshore versus offshore, that will be great. Thank you.

So for the capex, we have asked the question for how much we have actually spent for Q127. The total amount spent is around 3,050 crore. For survey, it is 450. For exploratory drilling, it is 1,230 crore. Development drilling, we have spent Our equipment and our projects, we have already spent. Thank you.

FY25, we drill the 22 exploratory and 35 development wells. FY26, we drill the 22 exploratory and 35 development wells. Thanks for a treat. On July 27, we are targeting 42 exploratory.

Thank you. Can you answer my question on NRM now? Thanks a lot.

So, yes, Phukal, sir.

Yes, see, I heard that question on the DRM. See, I think the DRM reported was 35. That accounts for around two floor that we have gained in terms of inventory gain. If you back that out, it will be 33, four DRM. This GRM increase is basically because of the difference between diesel and crude prices, MSN diesel and crude prices. So those rates were extremely high. In fact, this is after backing out the discount that we had to give to OMC to keep the prices stable. As a understanding. So, therefore, this is the DRM that we have. So, generally, our DRM hovers around $7 to $8 that you may have observed in last annual reports and all. So, now, we are clocking in the past quarter around $35. That includes two-floor as inventory gain. If you back it out, it will be $33. So, did I answer your question? Yes. Thank you very much.

Thank you. The next question comes from the line of Somaya V from Avengers Park. Please go ahead.

Yeah, hi, sir. Thanks for the opportunity. So my first question is on NRL expansion. Could you provide us an update in terms of the commissioning? So earlier, I believe DTU units were expected to get started. So where are we and what is our expectations in terms of output for this year and also in Si20?

I think I can answer this question. So, as we had in the last interaction, we indicated that in the first quarter, we will be commissioning our CDU video. We have mechanically completed that unit. We have subjecting it to inspection by OISD followed by PESO. These are statutory inspections that are required to be carried out before we do a startup activity. Otherwise, we are ready for startup. ESGT unit is ready. The SRU unit, which is required prior to commissioning of DSDT unit, is almost getting completed, maybe another couple of months' time. We should be able to start the DSDT along with SRU. So these three units will be commissioned by, say, October or November at best, and the rest of the unit, we are still taking a target of commissioning by 31st March 2027. So, having done that, our actual production in a graded manner will start from next financial year. Gradually, we will hit up to around 75% of the total capacity utilization by end of year 27-28. So, at Q4, I think we will hit around 75% of our rated capacity of 9 million tons. So, that is what our plan is.

Understood, sir, and also on the related infrastructure there, in terms of the Paradi to Numalikar pipeline, so there was a few kilometers that was pending. So any update there, when is that expected?

Yes, actually, there have been very good progress over there also. The entire stretch of ROU, barring only 8 km, stands acquired as of now. So, we are in a good shape there. We are getting good traction, good support from the governments associated with ROU because we are traveling to four states. So, all of them are supporting us. By December, we will commission the pipeline, yes. October, we are taking a target for mechanical completion. Understood sir.

But also in terms of. Sorry to interrupt sir.

May I request you to please rejoin the queue. Okay.

It's okay. Can I just ask one clarification.

Hello.

Yes, you can go ahead. Yeah, yeah, thanks. So just on the CAPEX part on NRL, so also if you could just help with what is the net data NRL of the 35 to 40,000 crores of expansion CAPEX, how much have we spent so far, and what is the plan for the next couple of years?

We have invested around 30,000 crores so far. So, we should be completing the refinery projects around 34,000 to 35,000 crores, and we should also be completing the PPU project by spending another 7,200 or 7,300 crores. So, that is the outlook of APEX that we have.

The current net data at NRL, and what is the actual cash APEX that we have spent?

30,000 figure that I spoke is a total spin that we have made. Out of that, around 26 will be, around 19 will be the borrowings that we have done.

Okay. So the eighth component is 19,000 borrow? Yes.

Yeah. So this is at NRL level? Yes, yes. Absolutely NRL level. And at the control level including upstream and international.

From a standalone point of view, for foreign investment, we are having $1.4 million loan, so far, oil is concerned, which is only for our Mozambique project, and in consolidated table, another bond we have from our foreign subsidiary in Singapore, which is $550 million of bond. Which is to be repaid in the next year, 27 May. From the total point of view, as I already told, it is 19,000 plus crores. So this is in a group level, if you see some of these three figures, this will be our debt, total debt in the group level, which is around 37,233 crores is our total debt.

Thank you. Ladies and gentlemen, you are requested to restrict your questions to two questions per participant. I repeat, you are requested to restrict your questions to two questions per participant. We have the next question from the line of Yogesh Patil from Dalat Capital. Please go ahead.

Thanks for taking my question, sir, and congratulations for the good set of numbers. Question pertains to gas discovery in Vijayakuram, Andaman. What are the upcoming steps or the procedure plan for this field to help us gauge volume reserves and that can be produced commercially? If there is any new exploratory well plan for Dandaman, what would be the timeline for this completion? And when can we anticipate the results? This is my first question.

Well, as you're aware, we have And the first well, we drilled, and we went to the second well because the sand that we encountered was tight, and with the current testing system, we couldn't test the well. So we decided that we would come back prepared for testing the first well. So we went to the second well where the gas was reported. Then in the second well, but it was flowing very intermittently. But in the third well, which we drilled, the gas was flowing continuous. So that was a technical discovery, which we have also intimated to the BGH, which is a statutory authority. So in the first well, we are now going back. And even as we speak, we are preparing to test the sand there using hydrofrac, for which a separate contract has been mobilized. And the Hydrofrag is a well-stimulation mechanism which can help you to test tight sands so the fluid or gas can come out easily. So this will take about a month in Vijaypuram 1 for the testing to be complete. And then we will demobilize this current rig, semi-subversible rig that we have because it has completed its contractual tenure. So the fourth well, we are going to go in Andaman with a jack-up rig, and this we are going to be drilling by December this year. And the fourth well is further up north in the Andaman block at a water depth of about 90 meters. So this rig is actually currently drilling in our KG offshore DSF block. So once we complete this well in KG offshore, which in a few days we will be testing in KG, then we will mobilize this rig to Andaman and drill the fourth well. In the meantime, based on the discoveries in Vijayapuram II and III, we have secured additional 3D seismic data, because the discoveries which were made were based on 2D data and 2D data interpretation. So we thought we will have an opportunity to map the subsurface better using 3D seismic. So in and around Vijayapuram II, we took 300 square kilometers of 3D. And in and around Vijaypuram III, also, we took around 300 square kilometers of additional 3D. So this 600 square kilometers of 3D data is currently being processed by Shlambhajai, which is going to be completed by October. So that by January, we have completed the interpretation, and then after going through our normal assessment and QC, especially leveraging on the partnership, The technical services agreement that we have with Total and Petrobras, so after having a detailed discussions with our technical service providers, based on the new 3D data, we will take the next course of action to undertake the campaign in Andaman in and around Vijaypuram 2 and 3, for which most probably we'll be drilling appraisal wells, and that will help us to We did it at the reservoir further. And also with the more conclusive testing coming up, we will be able to come up with some numbers regarding the size of the structure or the fluid in place.

Any possible timeline that you declared or shared the results in terms of the gas reserves into that field in the next six months, nine months, down the line, after doing all these exercises?

Yeah, so the fourth well, we are going to drill by December, so in about three to three and a half months, say, by March, we will be able to have some assessment of the fourth well, which is, again, a pure exploratory venture. Then the appraisal wells that we are going to drill in Vijayapuram year, Vijayapuram 2 and 3, that will depend on the interpretation that we complete by January. And by February, we should be able to take a call, like how many additional wells will be required to be.

Sir, my second question related to 8% why why decrease in gas production. How long will the petrochemical and power plants continue to use the less gas? Because we have been seeing this issue of a shutdown or less gas consumption from the petrochemical side. The question here is that could you throw some light on the challenges the BCPL is encountering?

Actually, we supply, suppose, as for power consumption, we supply... So, NIPCO, what happens? Is that NIPCO? I'd like to leave for you. They are having hydral power at the same time, and they are having the gas-based power project. Now, with the increasing gas price, they are not actually able to match the price of hydro. So, in that case, what they do? They little bit of kind of try to consume less, and they try to increase the hydroelectricity. So, this is what they do. Thank you very much. A kind of what you can call as a subsidy. I'm part of the players. The economy goes, maybe, they are not... I think that is their issue. But once we have this connectivity, then we'll definitely have Another thing, there is some upside is there, because the government of Assam is also taking interest in increasing the domestic supply of gas, CGD. So we still have some upside, and we are in talks with our Assam gas company, so that they increase their intake, because there are a lot of areas for it. Gas consumption can increase if some gas company increases their consumption. Otherwise, this situation continues. I cannot tell you this. But the only thing is that since Numoligo is coming up, and we are like already told that we will be supplying a total of 2.5 to Numoligo, or maybe close to 3, to Numoligo Refinery Limited once they start wrapping up their production. So, as you already told, it is coming up. So, I'll ask...

Ladies and gentlemen, the line for the management is disconnected. Please stay connected while we reconnect. We have the management's line connected with us, and you may proceed.

Hokon, sir, you are also joined in this call now?

Yes, sir.

Yes, sir. Okay.

So, shall I complete my... The other thing is that we have a DFL, the liaison feeder line, that is being done by IJGL. Endogenous gas is limited. So once that is connected, we have the gas, immediately we can evacuate. That should not be an issue. One good thing about that line is that most of the places we have the ROU. We have our own ROU. They will pass through in some parts, except some 30-40 km. Rest of the places, we have the ROU, one of BCPL. The other one is, I think, ONGC. And so there should not be any much issue in laying the pipeline. This is already under, going to be constructed very soon.

Sir, BCPL consumption has improved after the maintenance shutdown is over, or still the BCPL consumption levels for the gas are still lower in the current quarter Q2 also?

BCPL is stable, no? BCPL takes...

BCPL is more or less, it has picked up and it's currently stable.

So they take net around 1.25, 1.25 to 1.35, they take. Okay, so, and 6.0, so then risk. 5.225, it returns back. 4 is returned to us, and then 4 is, PNGS is back here.

If we look at DCPL, we are basically taking a very narrow view. Why we are focusing on BFL, DMPL, these are all long-term things which will help us kind of transport the gas to other parts of the country. Merely relying on BCPL or NIPCO and few other customers in the North piece, we all know that that will not help us evaluate the potential that we have. So BCPL, little up, down, this will not really change the scenario drastically. For us to really have a head start, big head start, this GFL has to...

Thank you, sir, and all the best.

Thank you. The next question comes from the line of Vartarajan Sivasankaran from Antique Limited. Please go ahead.

Thank you for the opportunity. On the feeder line, has the tendering been done or construction as it started?

Yes, sir. So, on the feeder line, there is already a progress of around 20% of the project, and the PMC has already been engaged. Work is progressing. As per plan.

Secondary technology is a small clarification on this issue. Once the 200 meter is completed, irrespective of how the mammalian ramps up, we are still in a position to put it in IGGI. So, the commentary is already in place. So, you are not dependent entirely on MIMALIGAR for the traditional 100.000, right?

You are correct, actually. Once this 200 meter is there, and DNPL being a common case here, so even if NRL doesn't consume, it can travel to IGZL and eventually to the National Gas Free.

And this, you think, will be ready in the next 2-3 months?

Ah, yeah, 2-3 months, it should be ready, yes.

Great, sir. Thank you.

Thank you. We have the next question from the line of Sabri Hazarika from MK Global Financial Services. Please go ahead.

Yeah, so two small questions. Firstly, you mentioned in NRL that you gave some discounts. Was this like the windfall tax related discount? How much was the quantum? And if not for the discounts, then what could have been the GRMs?

The DRM should have been much higher because we have been giving some discount to OMCs. And the first quarter, it was around, we started off with a very high number of 13 rupees per liter for petrol, and which eventually came down to 3 rupees per liter by the end of this. And then for diesel, it started with 10 rupees per liter, and eventually it was nil by the quarter end. So they kept calibrating based on the international price of diesel. So, our DRM would have been much higher. So, that is what I could have, I can confirm, actually. Yes.

30 rupees per litre to 3 rupees per litre in petrol, and 10 rupees per litre to...

13 to 3, 13 to 3, and 10 to nil. Those were the kind of discounts that we were required to give to OMC. Yes.

So, right now also we are at zero, or right now again it has come back?

Right now, it hasn't again reappeared, so we are giving now. But it gets calibrated month-on-month to reflect the delta between crude and product prices.

Is it connected to the SAED or it is like independent of the SAED?

It is exactly as per SAED.

As per SAED, right. Okay, sir. And fair enough. Thank you. And second question is... Um... On this oil production, so now if we are at 1 million ton every quarter, so technically we have hit this 4 million ton target of that Mission 4 Plus which we had. So is there any revision in guidance for oil production next year or are we looking to maintain it at this level for FY28, FY29 or going ahead?

Yes, Mr. Savvy. You see, we are ramping up the production by doing all whatever can be done. But to increase to the next level, other things like near-field exploration. At the same time, we are doing Welcome to the call. And we are increasing with it, getting whatever to get, good technologies we can include in hydrofrac, you can say, radial drilling. We have some thoughts in mind. 29 kind of target. We are targeting up to around 4.2. Maybe it goes beyond that, but that will also depend on little bit of kind of our own near-field exploration. That is one important aspect.

Okay, so 4.2 from the main producing area. This doesn't include any deep water or nothing of that.

Mainly main producing areas. And also we are ramping up production in Ravosan.

Okay, and just one last small question. Any impact of the recent floods on your operations?

No. In our areas, there was no impact. We have, for instance, in Shipsaga and also in Sarajevo, but these are in the western part of the eastern part of Shipsaga and Sarajevo. So our place, like, not much of flood, but definitely the nearby areas got some mud and all those things.

Got it. Thank you so much and all the best.

Thank you.

Thank you. The next question comes from the line of Mayank Maheshwari from Morgan Stanley. Please go ahead.

Thank you for the call, sir. So, with all these pipelines that you're kind of thinking about completing and the 200-meters pipeline for NRL, what do you think will be your target F-28 production for natural gas next year? And also, if you can just help us understand what percentage of the gas is coming as new well gas pricing or you're not being able to get that yet?

You see, I will not talk about the new oil price. Whatever incremental production will happen, will be all new oil price. Because the APM part will be over by this time, because whatever new gas will be doing, will be extending our preparation. We will be having more testing, and already... Some areas we have already discovered, we have tested those areas, and we know that we have the gas, and we will open up those. So, these will be all new gas. There will be no kind of old gas kind of situation. So, these will be all new gas. Number two is that you are talking about numbers in terms of total production in custom days. Once we get DFL connected, we are into five. That's the bottom line. We are five BCM from the very first day.

We have always maintained that ramping up the production by itself is not a challenge. Absence of the network is a challenge, which we are kind of trying to address, and once the network is laid, is ready for evacuation, ramping up production will definitely happen.

I think, yeah, that's very clear. I was just thinking that NRN is getting completed and ramping up second half of next year, and you have this pipeline as well done. Maybe I think the ramp up for next year, if you have some numbers around that, that will be interesting to get for natural gas.

Yeah, next year will be 3.8 vision. So now, we are shutting down some wells. At least 30 wells, we are always shutting down. When will we be opening all those wells? Both consumption will start in up to 60 wells. So, the situation is like this. So, it becomes an issue. So, these wells are already there. So, it will automatically pick up.

Yeah, that's fair. And my second question was more related to NRL. Was there any benefits on excise duty you were able to get this quarter, or it's very small a number?

You have seen that excise duty was calibrated to keep the retail prices down. So obviously, there will be a squeeze on the excise benefit that we gave. So to that extent, yes, our excise duty benefit realization has come down. So it was not a big number, but it was a sizable number.

Sorry to interrupt, sir.

May I request you to please rejoin the queue for any follow-up questions. Thank you. The next question comes from the line of Nitin Tiwari from Philip Capital India Limited. Please go ahead.

Good afternoon and thanks for the opportunity. Actually, some calificatory questions. So, continuing on the line of questioning on the GRM bit, I mean, if you could just for our understanding and first understand that the $35 GRM that we have reported, does that include the impact of both SAED and the excise benefit that you get or the excise benefit is not included in this? So, and subsequent to that, if excise benefit gets included, then what could be the GRM?

The excise, when we report GRM, generally it is devoid of excise benefits, and it only includes the inventory loss and gain. So that's what I clarified. And also it is netted of the discount that we are providing due to the SAED. So, does it answer the question? Otherwise, you know what is the excise duties of petrol and diesel. You can quickly calculate the impact of those products, those benefits into our DRM. So, whatever DRM that is visible, $35, is not considering the excise duty benefit that we are getting.

Yes, the reason I ask is because the SAED is also a special exercise duty. I mean, so I was wondering if, like, you know, both impacts are knitted off and then you report to the GI. But thanks for the clarification. Secondly, on, like, you know, your operating costs. So you basically spoke about an increased pace of activity, but the contract costs have come off as compared to previous quarter and so on, so other expenses. So, what are the key reasons for that, and how should we look at these costs going ahead down the year?

See, since we are in the expansion mode, some plants are getting commissioned, so those actually are accounted as an expense as of now, but as we stabilize, it will be absorbed into overall OPEX budget, and with commensurate revenue coming, we will be having similar sort of and much more lower per barrel operating costs. Our per-parallel operating cost covers around $4.5 to $5 today. It will come down to a level of $3.5. That's what our expectation is because we will be rationalizing on the facilities and our throughput will be high. Therefore, the operating cost will come to around $3.5.

Thanks for answering that. With respect to another, I suppose, as you mentioned, I'm talking from the perspective of Oil India, where contract costs and other expenses have come down. On a sequential basis. So what are the key reasons for that? And how should we look at these costs? Going ahead in the year. Yeah, that is correct. The contract costs are lower sequentially and other expenses are also lower. Sorry, sir, your voice is not very clear. Can you please come again?

See, the contract cost of around 146 crores, which has gone up during the current quarter as compared to the previous quarter,

So, I was not very clear, but like, you know, from what I understood that on a YOY business, you mentioned that some hundred crores of extra cost has come. Otherwise, everything else is in mind. That was the right understanding.

It has several components.

Last please, sir, if I may, like, you know, just one more clarification question, if for anybody's benefit, if you can give your target for production, sir, I would, I just wanted the production targets for this year and next year, I mean, that's all for my, if that can be given.

You see, we are already told that quarter and quarter, we are almost close to one MMT. So you can say that it will be around minimum 3.9. We'll be our production this year. So you can, that's what I can tell as of now.

Got it, sir. Thank you.

It's possible that we touch more VCR itself.

Thank you. The next question comes from the line of Amit Murarka from Axis Capital. Please go ahead.

Hi, thanks for the opportunity. So just on Andaman, so if I remember right, you had We're taking a write-down of the Vijayanagar Vijayapuram 2 well, whereas the 1 and 3, I think, are still as of now in your assets. So, we just wanted to get a clarity like now, is it fair to say that given that it's been like now 2-3 quarters since the well was drilled, it's no longer going to come up for, let's say, a review or a write-down of the expense done on those two wells?

Actually, we just completed the testing sequence in July. And we will be undertaking and exploring. And so, once we have the interpretation and the prospect generation done by April, Program one, we had to hold on because we didn't have the proper testing facilities at that point of time.

Would you be able to share what has been the spend on Vijayaburam 1 and Vijayaburam 3?

The testing results. Vijaypuram-3, I've already told you that we'll be drilling an appraisal well in that area. And if, based on a 3D seismic campaign, we see that Vijaypuram-3 maybe was not in a proper structural position, then we can always examine the feasibility of utilizing this same well to sidetrack and go to a desired position, which we can go up to 1,000 or 2,000 meters. Laterally, horizontally. And Vijaypuram 1 will take a call after the testing results, which will be concluded this month.

No, I got that. I just wanted to know what are the... Sorry to interrupt, sir.

May I request you to please rejoin the queue from...

No, no, it's a question which couldn't get answered properly. So I'm saying that what was the spend which was made on Vijaypuram 1 is what I was asking.

Vijaypuram 1, our spending has been roughly 1,000 crore.

1,000 to 1.

Yeah, it will be 1,000 to 1,050.

Okay. Got it. That's all for me. Thank you.

Thank you very much. We have the last question from the line of Beneath from Nomura. Please go ahead.

Thank you for the opportunity. Just one, a couple of questions, basically, on GSP and royalty. I think there was a BAC filing. So, can you tell us what is the total amount due on this GSP and royalty? How much was provisioned? How much was paid? And what could be the impact in the second quarter on the TNL as a tax flow? And similarly, on the land tax, I think the government has withdrawn the case. So I believe India has already not paid anything. So is there any impact on that also on your financial statement? Thank you.

Let's take up the land question first. So, in the recent that the representative, the senior counsel of the government of Assam, he gave an undertaking to the Honourable Court that this particular law will be withdrawn. So, it will be deliberated in the state legislature and following the due process. The act will be repealed. So far, whatever we have shown in our financials, we have shown them as contingent liability. So it has not impacted our financials at all. And in the days ahead, as long as, I mean, we'll have to wait till it is withdrawn by the state. Once it is withdrawn, we will also kind of remove it from our books. So that is the position on Assam land taxation. And now, as regards the GHC on royalty, we have all this while been providing for it, so it is again not going to impact our financials, because every quarter we were providing for it since this new thing was introduced. In 2017, right? From 1st of July 2017. So, without interest, it would be to the tune of 2,500 crores. Without interest.

Yes, sir.

So, without interest, it would be roughly about 2,500 crores. So, our undertaking to the court was that the court has given us six weeks' time to settle this, and we are trying to kind of make this payment as quickly as possible. At this point in time, I can tell you this much.

So, sir, within the next six months, the interest component doesn't have to be paid. Only the 2,500 principal component.

Yes, absolutely.

Okay, thanks.

If there is no interest, we will only be paying the liability as it arises.

And this will be put in the second quarter result.

Sorry?

This will come up in the second quarter financial, the 2,500 crores.

Yes. Second quarter financials, I mean, financials as such is not going to be impacted because we want to be provided for it. So, but then, we will definitely make a disclosure saying that this much amount has been released on account of GST on ROID.

Thank you. We'll take that as the last question, and I would now like to hand the conference over to management for closing comments. Thank you, and over to you.

Thank you very much for your participation in Oil India's Q1-27 earnings call. A big thanks to Dan Capital for helping us to organize today's session smoothly. We trust that we have satisfactorily addressed your queries and provided meaningful insights into our quarterly performance and ongoing initiatives. Should you require any additional information or further clarification, please do not hesitate to contact our investors' relation cell. The relevant contact details are available. Thank you for your time.

Thank you. On behalf of Dam Capital Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.