Oil & Natural Gas Corporation Limited (ONGC) Q4 2026 Earnings Call Transcript

Good morning, ladies and gentlemen. I am Madhuri, moderator for the conference call. Welcome to ONGC's earnings conference call for quarter and year ended on 31st March, 2026. We have with us today, Shri Arun Kumar Singh, Chairman and CEO, ONGC Group of Companies, Shri Rajashi Gupta, MD, ONGC Videsh, Shri Manish Patil, Director, HR Having Additional Charge Director, Finance, ONGC. Dr. Anupam Agarwal, Director of Finance, ONGC Videsh, and team who will interact with investors and analysts to discuss Q4 earnings. As a reminder, all participants will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on a touch-tone telephone. Please note, this conference is recorded. I would now like to hand out the floor to Shlomi Manish Patil for this opening remarks.

Good morning, ladies and gentlemen. I am Manish Patil, Director HR-OMGC, having additional charge of Director of Finance. I welcome you all to this OMGC earnings call for Q4 and Financial Year Ended 2026. Thank you all for joining us on the call. As said earlier, we have with us Shri Arun Kumar Singh, Chairman and CEO ONGC, Shri Rajarshi Gupta, MD ONGC Videsh, Shri Anupa Maghrawal, Director of Finance ONGC Videsh. Also present are my colleagues from ONGC, Shri Yogesh Nayak, CFO, Shri Ajay Kumar Singh, President Planning and Transformation, Shri Satish Kumar Divedi, Chief BD and JV, Shri Ravinder Singh Nagy, Chief of Investor Relations, Shri Sanjay Kumar Sharma, Head Investor Relations, Shri Prakash Joshi from Investor Relations, and Shri Akhilesh Tiwari, Head Corporate Accounts. ONGC has compiled its financial results for the quarter and financial year index, 31st of March, 2026, which has been audited by the statutory auditors. The financial results have already been released on 26th May, 2026 through a press note and sent to the stock exchanges. This has also been sent to the analysts who are there on our mailing list. Here is a brief synopsis of the results. The company at the consolidated level has earned profit after tax of Rs. 13,678 crores during Q4 FY26 against Rs. 8,965 during Q4 FY25, which is up by 53%. There is also an increase of 30% in consolidated annual PAC, which is Rs. 49,793 crores during F-526, as against Rs. 38,329 crores during financial year 2025. This increase, its consolidated PAC, is mainly supported by performance of our sub-categories HPCL, MRPL, OVL, and OVAL. Now coming to standalone financials, there is an uptick of 3% in fact on quarter-on-quarter basis on account of improved crude realization and rupee depreciation. Company has earned profit after tax amounting to rupee 6650 crore for Q4 FY26 against rupee 6448 crore earning The annual pack for FY2026 stood at Rs. 32894 crore against part of Rs. 35610 crore for FY25, impacted by lower per-viral realization of crude oil.

Thank

you. In other expenses, during financial year 2026, that is, Rs. 28,104 crore in FY2026 to Rs. 24,731 crore in FY2026. This is on account of increase in provisions and write-offs by Rs. 1142 crore and increase in exchange loss by Rs. 1932 crore. Provisions and write-offs have increased mainly on account of one-off provisions in Q4 FY2026. It includes provision of GST and royalty of Rs. 235 crore, expenditure of Rs. 262 crore related to KG 98 bar 2, umbilical return-offs as per opinion of ICAI, which was previously capitalized, provisions for old outstanding receivables of Rs. 257 crore, provision for store-in-space of Rs. 280 crore. There is an increase in exchange loss by mainly on account of depreciation of INR versus U.S. dollar by rupees 9 per U.S. dollar, that is 11%, and financial at 2025 versus financial at 2026, and upward revaluation of foreign exchange liabilities. ONGC declared three hydrocarbon discoveries during financial year 2026 in its operated shortages. All the discoveries are in shallow water region of Mumbai offshore. Two are new prospects and one is new pool discovery. The standalone crude oil production was 18.355 million metric tons during FY26 as against 18.558 million metric tons in FY2025 Thank you. Partnerships for overall production growth, entering into new business verticals, expanding renewable footprint, and as a strategic enabler for strengthening our subsidiaries. The board has recommended final dividend of 20%, that is, rupees 1 per share, with dividend payout ratio of 51%. The total dividend for financial year 2526 would be 265%, that is, rupees 13.25 per share of the The face value, rupees 5 each, with the highest ever total payout of rupees 16,669 crore. Then, with this, I finish my briefing of the results of the fourth quarter and financial year 25-26. Now, I will request Sri Arun Kumar Singh, Chairman and CEO of ONGC, to address the attendees, to give you a detailed overview of the performance and future roadmap. Thank you.

So, good morning, ladies and gentlemen. So, it is a great pleasure for me to interact with you. First, I'll give you broad, you know, 30,000 feet view, and then we can take questions. First and foremost, if you take ENP side of ONGC, ONGC now is two-third ENP and one-third non-ENP at a group level. So two-third, if you see, ENP, which continues to be the main thrust. First, the two, three macro trends, if you see, is basically the first one is that you might have heard that there is a great push towards exploration, and government is seriously considering to fund particularly deep water exploration, which we were doing so far at our cost, but of course size was small. So now, deep water exploration is coming in focus from government side. Second, if you see at policy level, which is a macro level, if you can read the pattern of time, government removed the ground, reduced royalty from our onshore productions, and basically these all royalty, post-wellhead, all that are in the direction of promoting ENP in the country. In fact, taking a hit on government-owned revenue and literally giving that money to you for increasing production or doing more exploration. So that intent, plus also you must have noticed that unlike previous decade, this time when the oil hit $150, the steel SAED did not come. So we thank government for that, because whatever market price is there, ONGC is able to realize that. So in fact, ONGC now is a, as you can say safely, that other than the APM gas, government is not controlling any of our, you know, revenue stream. It is purely left to ONGC to manage this revenue stream, be it production or be it the price. The only area where government is involved today is APM gas. First and foremost, we want you to know that ONGC produces today and sells more gas than oil. In fact, gas is now a little more than oil. And gas side, if you see now, we are in new well gas, which was last year, say last year was around, volume-wise it was 17, and revenue-wise 21. This year, you can safely, you can do your old number crunching. This is a big jump in new well gas. Already from 1st April, it is 9 mmHCM+. You can expect another 3 very easily because our new project is new well gas only. So it becomes 12. 12 out of, say, whatever we sell, so 25% of our gas has become new well gas. New well gas, if you notice, we get 12% of crude. So virtually, this is an international price. In fact, world over, local market, I don't think there is any market in the world which pays more than 12% of, you know, well twice. LNG is different because LNG liquefaction and all that costs. But probably India is the highest paying, you know, for new wealth. India is the highest paying market in any onshore thing. That also goes to prove that government intention is to leave more money with EMP operators to do further production and exploration. Now, bigger story, therefore, in our basket today is that gas, new well gas will be always on rise. Now, from 17 percent, this is already jumped. I think it will be at 30 percent, time will tell. But ultimately, because there is some margin we have to take for what happens, but literally it will be between 25 to 30 percent anywhere this year. And next year it will be again 30, 30 to 35, 34 percent, 36 percent. Every year, because as you know why I'll explain you this, why new well gas is on rise. That doesn't mean that gas production is on, in the same ratio rise. Yes, because it is gas is shifting because our old wells are dying and nearby will build new wells to produce same gas or more gas. And therefore, the $7 gas is gradually getting replaced by 12 percent gas. So that is only a matter of time before four, five, six years max, even if the government policy doesn't change. It's the same policy continues, when almost 80-90% of NGC gas will be new well gas. So this is something that you can factor in in your calculation, that new well gas, what price, you know, at crude price of, say, $90, we get 10.8. 10.8 in the local market is, we value it more than oil, to be very frank with you, because for different reasons that we cannot share with you, but our gas, gas is not as cumbersome as oil. So that's it. So it leaves more money in our pocket. So that is, so for the gas part is concerned. The third part, India is – oil may be flat, but gas because – or unless we get some major discovery, gas will keep growing. Like, for example, this year itself, we have started opening the wells. Out of 15 wells, we have already opened four wells for a DODP project, which is supposed to be 4.89 mm SCM gas. Progressively, we do it because, you know, one by one, one by one, two balance the system. So if you take that quantity of, say, four, so four on total our gas sales is today, say, production is around 53, 54. So even production-wise, it is – and these are all neat sales gas. So what I'm trying to tell you that every year, 7% to 8% increase you should expect in gas because this year is UDP, next year is BSF. BSF is also again 425 MMSC in gas. Plus also we are hopeful to open complete 98.2 gas wells because wells are complete, now platforms are complete. Often we told you that that project was inordinately delayed for geopolitical and, you know, because all the vendors were foreign-based. Now we are hopeful that now last leg we are there, we are doing a piping connection, which is internal to our work. So July, August, we'll open those wells too. So you can safely assume that our gas production will be up compared to last year. And next year also gas production is up on account of – So it is not only for us. It could be true for other operators, too. So gas production, and gas is becoming more attractive because of the price that Indian market pays for gas. So this is something that I wanted to tell you. Then third thing that, fourth thing is important is that we roughly drill around 500 wells. 500 wells, 100 wells are exploratory wells, and around 400 are producing wells. This year also we are increasing a little more. 60 watts or a little more than that, we drill more. So for the reason to basically augment or support our production base. But at the same time, you should be mindful that in this business, whole field depletes, pressure goes down, and therefore every time we have to search for new. Fortunately for last year, our reserve replacement ratio in 25-26 is more than 1.1. It is 1.15 or something like that. 1.17. It means we found new oil and gas equal to what we sold. So it means R by P ratio almost remains at the same rate. Reserve to production ratio. 2P reserve is around 700 plus, which is almost 2-3, you know, million ton less or more, more compared to last year. So, futuristically, these are relevant for you. So, I thought I'll give that information to you. Now, coming to our bigger commitments. Bigger commitments are this year. One thing you must know that I want you to know that we are today executing almost around 33,000 floors of projects in Western offshore. That is currently working. Work is going on. That is total project values, 33,000 floors. So, these all are there to either sustain production or increase production. So, you can draw your own numbers that how much will contribute into increased production. So, that is something that we want you to know. Plus, also, we have this year also we are in the process of that we'll share with you at an opportune point in time that how much we are doing new projects. Basically, that part, and then one more thing we want you to know that global outlook, you observe better than us. Global outlook of oil price is certainly for next two years is better than what it was previous two years. So you have to draw your own inference to see that where ONGC will be. This is, by and large, I've shared the ONGC picture of the price. One thing which is, we really are very proud that for Western Offshore, which is roughly our 60% of oil and 70% of our gas, comes from Western Offshore. So, Western Offshore is our lifeline. You may be aware that we gave BP-TSP contract for Mumbai High. Mumbai High was only 38% of total Western Offshore. And yesterday, day for yesterday, we awarded TSP-2 for remaining 62% of Western Offshore. So now 100% of Western Offshore is with BP as TSP. So, and we had, we shared with you the number that, on the baseline number, BP showed a good result, although in our industry, even the, you know, leaf doesn't move for less than two years. Anything we do, it takes time in the ENP industry. But first year itself, they showed some operational changes here and there, and we could see some results. Now the big things are under execution. Big things means CapEx projects, mainly the water injection wells, producers, what was the group work, which our TSP team did. That work we are under execution. This year we'll execute 40%, and next year we'll execute the 60% of recommendation. And remaining, which we have just now awarded, I hope that next year will come for execution and for remaining 62% of the field. So, TSP, we are getting big on TSP with BP, and at least initial shoots proved, you know, line of thinking was right, because that too, in a very short span of time, last year, April, they came. So we are very hopeful about outcome from that. Now, one more thing we want to share with you is 98.2 I shared with you gas, but I'll be very honest to say that we had some geological surprises in production in 98.2 oil, but we have almost got full handle on it, and we know what to do now. So what to do now in terms of sustaining the production. So this is something that, you know, we should – we yesterday in our first release also been mentioned, but gas wells will open, and now we have best international experts to also to suggest us that what to do best in 98-BOD2. These are small, small interventions that we need to do, and that we will do in the short source of time. So, this is something about ENP. Now, coming to OVL, our subsidiaries, and our other activities, the primary, the first thing you may be aware, we are back in Sakhalin, and Sakhalin is full blast. Russia is producing almost what it was producing pre-Ukraine. Sakhalin is at the same level. So, you can draw your own inference, what kind of thing it will do to OngC group, because sakalin is our numero uno set in the cap of OVL. Second good news of company is that Mozambique project is progressing very fast. There are 6,000 persons on the site doing project. We hope that if everything goes well, the 28th end or something, we should have our LNG. So this is something that is happening good on the front of OVL. The rest, third thing, which is also important, is Venezuela. We are very hopeful that Venezuela, we are producing something currently, but now in the new regime of American new regime, We are hopeful that our, you know, production will go up substantively after we get the license in the new regime, that is the U.S. regime and all that. And hopefully Venezuela also will start showing a good number of production in years to come. This is something that on OVL side, Opal side, we have promised that we will turn it around. We almost turned it around because last year if we had some small issue, otherwise our EBITDA was 1,500 crore, but we achieved 1,200, 6 crore, but there was some last month mark issue came, and then we had to shut for the want of gas because gas got diverted, some gas got diverted to LPG and all that. So, otherwise, we were there, what we had promised, that 1,500 crore will be our EBITDA of local, and let's hope that next year, that is, this year, it achieves, again, our internal target is 1,500 to 2,000 crore. It achieves EBITDA of that 2,000 crore. Now, we want to share with you that something that is in the last four or five years, you must have observed us that we have been very bullish on OGL, ONGC Green Limited. ONGC Green Limited is having two, three mega, one is 100% subsidiary call, which we acquired from PTC, and the other one which we acquired with NTPC. So that, IANA is now 3,000 megawatt plus, and hopefully it will add another 1,000 megawatt in this year. So there, we are almost with our own production, what we had. So we have become now, we can say that now we are almost close to 3 gigawatt by next year in terms of our renewable portfolio. Thank you. And also, you know, it's turning out to be a good asset because it has old PPAs and all that, as you're aware. So, it is something that, you know, that renewable side, that is our flagship. Cost reduction side I want to talk about because cost reduction side we had promised 5,000 crores. We almost got 4,000 crores, but you'll say that where is that money gone? So money has gone in terms of GST went up in oil and gas for input 12 to 18%. That itself wiped out to 2,000 crores for us per year. I'm saying everything put together. And then second issue came with this dollar conversion, this, you know, rupee depreciation. So this ate away all that 5,000, 4,000 crore we saved. But we are on course to save 10,000 crore. I have told you that hopefully in another 3,000, 4,000 crore will come our kitty with host of effort, which is already in place. Now shipping side, as you are aware, we have formed a JV with Mitsui. We have ordered two ships for a very large thing carrier for our Opal. So, shipping side, that is something that is another activity. Now, PetCam, we have – that also we have shared with you in the stock exchange filings that we have approved the creation of a JV between MRPL and Opal to have better synergy in PetCam marketing. So these are two of our companies and two having independent everything. So we are basically amalgamating the marketing part so that there is one umbrella brand under which the product gets marketed. So this is something that the board has approved. It is now in the final stages of other statutory requirements. So hopefully there also some value should get created. Yesterday, in our board, we approved a port business. We are forming, we yesterday approved the formation of a new JV with the Gujarat Maritime Board to create a new port at the Hedge. I want you to know that the Hedge is the least, most, least distance port from northern denser population part of the country. So, naturally, anything to land at the hedge is cheapest for the country in terms of transportation, further transportation. But the hedge, we know that the hedge also is nearest for the LPG pipeline, that is 8 million ton Kandla-Gurakhpur pipeline, plus this port will serve our own interest of this Opal, plus LPG. So it is, from day one, it becomes, it should be a very, very highly financially viable and commercially profitable venture. The 50-50 JV between us and Gujarat Maritime Board. So this is something that, so if you notice, five, six new JVs have come in recent times. Basically, you know, increasing our chances of other revenue streams, and including renewable, including, but basically in the call-on-energy space. It is not that we are, and not integrated to our own line of business. Like shipping, what we did is for our own shipping and transportation from U.S. for our own plant. So, now, coming to, I think, I am done with most of the things, except unless you, did I miss anything? So, this is the macro picture. Now, we want you to know that gas is more lucrative for us today. In Indian context, gas is more lucrative. So, we should call ourselves gas and oil company, not oil and gas company. And also, no, whatever new gas comes, these are all, even from APM block, like DSF is free pricing. DSF, which will come next year, is market price. It is not even governed by 12% slope. So 12% slope is only for nomination field, and any well, like this project of DUDP is in the nomination block, and therefore entire production is going to the new well gas. New well gas is 12% of food price. So this you want you to be mindful, and therefore, ONGC gradually is becoming a more greener company through more gas. So, you know, so now that is also a strategic pitch for the world, that possibly only one oil and gas company in the world which produces little more gas than the oil. So this is something that, as you know, oil production of the world is around 4,000 million tons, 4,000, 4,400, and gas production is 2,500. But we are almost matching. Oil and gas is equal, and gas is a little more than that. So it is something, and gas is more valued fuel in the light of what goes on in fact. In fact, you will be very, you are doing the market. In India, gas demand is galloping. In Maruti alone is selling roughly 25% of its vehicle is a CNG vehicle, so car manufacturing. So, because CNG is a natural, and CNG demand is viable at 12% price. So, naturally, it is more greener, and it is also, gas, we can produce more and more, that confidence we have. So, oil, I'm not saying we can't produce, but oil growth, in our view, will be, unless we have some big discovery, will be muted. But gas growth will continue to be. So this impression that ONGC will not grow is not correct. So it will grow more on gas side. So that factor you should keep in mind. So with this, I am done. Now you can take questions.

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on a telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. The first question comes from Nitin Tiwari from Phillips Capital Limited. Please go ahead.

Thanks for having this call.

I really appreciate the elaborate initial brief that you gave, gives a very clear picture. So my question was with respect to gas production. The first question is with respect to gas production. So as you mentioned, I mean, like, you know, your incremental focus is on gas, and you spoke at some length about it. But, I mean, what I wanted to point out is that surprisingly, over the last five years, our gas production is on a continuous decline, Despite whatever investors that we have been doing and despite the guidance as well. So, if I remember right, our earlier guidance during this year was that by January, the technical partnership with BP would start from Shambizard and we'll also have incremental gas coming in from German offshore as well as like, you know, other fees in the western offshore which will contribute about 5 MMSEMD by end of March. So, I just want to understand what is the What is the status of these projects? Was there any incremental production that came in and the decline that we saw in this quarter was despite this production coming in? And in that backdrop, what is the guidance for FI-27 and FI-28 for gas production for us and also for the JV? So that would be my first question.

So BP in the MH field, that is Mumbai High, that is TSP1, there's oil on baseline target. Oil is 102%. We have disclosed that yesterday. And gas is around 108 or 109%. So gas for the BP has gone up. But as I told you, oil and gas production, there is some small operational part, and there is largely facility part. Facility part is coming up. So it is, first year itself, MH has shown, you know, a number. But first year was never supposed to be a great number because facility laying will take around a minimum of one and a half year to go. So, that is, but still, where BP is involved, the production is more compared to what we have targeted. Now, coming to DUDP, DUDP, yes, in March, with DUDP, we were targeting March, and March, we opened, we have started opening the wells. But try to understand that it is not like, you know, something that you start today, everything to open in one day. We have to go through a process. There are 15 wells, and all the platforms, all the four platforms are fully ready to receive gas. We are opening gas. Four we have opened, and we have to open, remaining 11 we have to open. So, whatever we had committed to you, we will start monetization from March. I think we have honored that, okay? Now, monetization commencement doesn't mean that full thing coming in one day. It is either a startup plan which takes around six to seven months, and that process we have to go through. So, in this monsoon, we hope to open at least another six to seven wells. So, now, monsoon is starting now. So, fifth well is under opening now. Then 6th will come, then 7th will come, 8th will come. There is a process and sequence to be followed for gas production, and because you have to synchronize with, you know, the pressure balancing you have to do, the well doesn't get overpressurized and all that. So there are technical issues there. So we are sticking to that plan that monetization commenced in March. Hopefully by September, October, we should have opened all the wells. But again, I just want to tell you, peak production doesn't mean that after you have opened all the wells that peak production happens. Peak production happens on the reservoir maturity. So after pushing some gas out and all that, then again interventions are made, and therefore peak production may be a little further away. But all the wells, we are hoping to open by just after monsoon. It should be completed after monsoon. That September, October, we should be through with all the wells opening. And opening should give us around 3 to 4 MMSCM per day. Did I answer your both questions?

Yes, I mean, you did answer to some extent. I also wanted to have the guidance for 27 and 28. And I do appreciate the complexities in these projects, sir, and really appreciate the good job that OMBC is doing. But I was only going by the guidance that you all gave, I mean, at the beginning of FY26.

I'll tell you, I'll tell you, we gave a hint in yesterday, before you gave, I read it, though I didn't write, but people have written it well. They have said very clearly that the Gulf War, March, many projects got delayed because of the Gulf War. One of our major pipeline replacement projects was by a Saudi or Dubai. So naturally, that project got kicked because of the Western Asia issue. In fact, geopolitical issues, then similarly, there are some projects which got linked to material availability and all that, That was also because somebody is not getting energy, so everybody asked for deferment of time. But still, you should appreciate that fortunately, the UDP were chasing very badly, so we got on time. But other projects, little delay here and there, and also you should be mindful. Then we connect the new projects with the old wells. We have to, there is a process to be followed in which the certain portion of time, the production suffers. Because it is a partial shutoff or major full shutoff, so that, you know, we can do the activity. So some part you can attribute to that. But if you see, last year, ONGC is standalone gas production. It is almost flat. It is not 0.6% negative only, if I remember correctly. If you are hinting at our JV partner, that is Vedanta and all that, that figure I can't talk. But ONGC is standalone, pure standalone, means ONGC operated block, not ONGC. Jointly on box operated by someone else. We are almost, oil may be at minus 1% and gas we are 0.6%. So, almost we are flat level. And DODP number was supposed to come from April only. Yeah?

Sir, I was referring to average production as well as the quarterly production. So, in this quarter, if we look at it, our gas production is down by 2.5%.

I gave you the reason. Our projects are under commissioning. Many things, as I told you, wells are under, you know, opening and all that. So we have to shut other wells to gradually open these wells. Anyway, these are technical things which may not, you know, worry. But whenever you commission something new, there will be temporary blitz. So this is something this quarter is primarily attributable to that blitz, 2% minus.

Sir, pardon me if, I mean, like, you know, if, like, you know, I can, you know, crosshack somewhat, like, you know, I don't know, but I'm trying to put it as mildly as possible, but if you look at, I mean, even KG 98 by 2, the project is not delayed, I mean, it's severely delayed, I mean, we have been abiding in almost every quarter.

First of all, we gave you a hint that we had a geological production. Gas wells are yet to be opened because gas wells could not open because platform was not ready. So, platform got ready, and platform got ready, and then now connections are going on. So, hopefully, we are hoping that July, August, we will open those wells.

Yes, sir. I mean, I just wanted to have the guidance, therefore, for 27 and 28, I mean, in light of what you spoke about opening up wells in...

We can't give you exact numbers, okay, that you have to... We can't give you... Unfortunately, we give you a number, and then you can cling on, and then, you know, you ultimately blame us. We are in ENP. It is called Exploration and Production. It is always...

No, sir, we are not going to hold you on to any specific number. If you can help us with some broad guidance, that will be helpful, sir.

Broad guidance I gave you. It will grow.

Gas will grow. Nitinji, let us now ask some other questions to come up. Sure. Second question is a bookkeeping one, sir. You can join the queue later.

Yeah.

Okay, Nitinji. Thank you. Thank you, sir.

Participants are requested to ask two questions in the initial round and may join the queue for more questions. The next question comes from Pranita Shetty from Morgan Stanley. Please go ahead. Hello, sir.

Can you hear me? Thank you for this opportunity. Really appreciate the detailed brief you gave earlier. It adds a lot of light to what we're trying to understand about the company. Sir, I had two questions. The first one is relating to discoveries. Please. Could you throw some additional light on the discoveries what you mentioned earlier, the three discoveries in the brief what you had mentioned? Could you just add more clarity in terms of what is the production, that potential production you are seeing there, and what could be the capex for these assets?

So, these are under appraisal, okay? All I can say that the Wells Discovery flow rate was, to my mind, for Western offshore was fantastic, because the three discovery that we have quoted you yesterday, two in Western offshore and one in Assam, both the discovery is a fantastic flow rate it has shown. Only thing is, unless we put some more wells nearby and assess the reserve size, we can't give you a definitive figure how much we will produce. But we are now very bullish on these two discoveries because it is completely a different area. It is, we, we, and frankly, we were not expecting this flow rate. So naturally, but we can't tell you the quantity because unless we have one, one or two more exploratory well, appraisal wells. In our industry, we appraise, discovery is made. Then after discovery, then you appraise by drilling some more wells to delineate the area. And then you assess the quantity. Once you assess the quantity, then you develop the field development plan. So then you decide the capex. But all I can say at this point in time, by Western offshore standards, it looks very, very promising. But quantity I will stay away from because, you know, because that is not correct on my part to say without appraiser.

So, sir, then you'll be adding, let's say, another three exploratory wells there and then giving us a more detail.

Number, I will give you then. We are sure that it is worth developing. They can make that statement. But what is the reserve size and what will be the facility size, we'll come to know only once we have the appraisal done. Appraisal done means one or two more wells. And that is already under plan. So, it must be happening now.

Okay, sir. Thank you, ma'am. The next question comes from Randy Law from Goldman Sachs. Please go ahead.

Am I audible? Is your audible? Yeah.

Yeah, yeah. Okay. Yeah, thanks for taking my questions. I have two questions today. So for my first question, could you share some thoughts on why the government has not implemented any windfall taxes recently in fire oil prices, and whether there's any expectations of such going forward?

This is my first question.

Yes, they should ask government, not me. But see, we are damned either side. Then also you are damned. Last time SAD government applied, everybody said the government is interfering too much. This time government has not applied, then also you are not happy. But it is good for ONGC because even when the crude price went up to 140, what you can infer from here, I think I would imply to infer you that way, that government doesn't want to interfere with E&P sector. It wants to give full freedom to whatever, because you know our report dependence. They want every drop to come out, and whatever they can do, they have done. In fact, that not as I was saying because the government has appointed me, but because I'm saying because they didn't apply SAID despite so much of crisis and so much of loss to OINC's. Otherwise, we were the first small guy to compensate partly by, you know, giving SAID either through exposure or even earlier times we have given discount up to 2 lakh crores in the previous time when 13-14. That, you know, government didn't collect, but we directly gave the discount to our crude purchasers in India. So, this time nothing like that happened. We got flat Brent, even when it was $140, we also got $140. So you should be happy, no, as a ONGC investor. Thank you, Prabh. So, for my second question, what is the latest latest of the proposed ATN gets by

deregulation from January 2027?

Pricing regulation as of now I can't say about government. Government for this year, because it is supposed to be reviewed this year, because it is Tarek committee had asked for review in 27. But in a way, whether that review is required or not, that is a million dollar question because we have already reached $7. And $7 gas is our kitty next year will be, you know, out of total gas will not be more than $50. So, if they review well and good, if they don't review also, we have new well gas. The new well gas will keep replacing old well gas. And so, therefore, this journey of 10 to 12 percent migration each year will happen. So, I think if we can revise it right now, we'll be more than happy, but actually, directionally, it is clear that government wants to compensate very handsomely to gas producers.

Thank you, sir. The next question comes from Varadarajan Shivashankaran from Antic Stock Broking. Please go ahead.

Thanks for the opportunity, sir. You're all quite enthused by the government's support in the form of a relief on the royalty fund.

Is there also a plan from our side in terms of increasing exploration as well as development capex, given this backdrop? So, that is a little premature, but intention, at least what we understand from various sources, that intention, of course, it is for government to take a call finally, that how much does support, but it looks like there is a big support for, you know, exploration and collection coming from union budget. Are we looking at increasing our CAPEX? Thank you. That depends on what contribution gets announced from there. We'll adjust our figure accordingly so that we continue to give you handsome dividend.

Very nice. Secondly, in the case of discoveries and new reserve replacement ensure you're given the 2P reserves,

unfortunately, we don't have the baseline 2P reserves for the entire country to compare ourselves with. So, if you can provide that, that's the use of the oil and gas. So, that will give. Subsequently, we'll give you. Subsequently, after this call, we'll share with you. Sure. Thank you. Because that baseline last year addition is 44. In fact, this year addition, 25-26 addition is 44 million ton. We produced roughly 40 million ton of oil and gas. So, 4 is additional. So, you should be happy about last year's performance. This year will be the previous year's performance, so God has not given us eyes in the back.

Thank you, sir.

We will share with you. This nonetheless will share with you.

The next question comes from Amit Muraka from MOSF Financial Services. Please go ahead.

Yeah, this is Amit from ISIS Capital. On CAPEX, like, could you give a number as to what can we expect for FI27?

See, it remains generally 30 bound, because now 33, some will spill over, but it should be anywhere. 32, 32, something like that. But if more CAPEX will bring, more production comes, we will be happier to spend more. I am talking about ENP capex. Non-ENP capex is separate because now one-third ENP capex goes in non-ENP side. We are not going in that ratio, but this we talked about ENP capex.

Sure. So ballpark we see 33 ENP and then another 10-11 non-ENP.

Yeah, if the good opportunity comes, then you can take it. Because we have currently no plan, but if some new business opportunity comes, we'll invest there 8 to 10.

And what can you provide a KGD6 oil and gas run rate right now? Sorry, KG982 oil and gas run rate.

So, how much is...

You have numbers? 90 by 2.

90 by 2.

So, it's...

Yeah, currently it is 2.3. In the software.

So 2.3 gas, and once we open the well, it will be 4, 4 or 5, but it could be, it could be, he's asking about the current production, so 2.3 gas and around 25, 24, 25, 24, 24, 24, 24, 24, 24, 24, 24, yeah.

So I see that both have actually been dropped quite substantially from where we were earlier in the year.

No, in fact, we had, I told you that we had surprises. In fact, it is compartments, but we have got a solution now in hand. So, we have to implement it. So, it should be back, because the reservoir proved to be different from what we thought. So, what is the run that you are targeting now? It should come back to the same level, but it will take around a year or so, minimum, because we have to drill some wells.

Thank you, sir. The next question comes from Raj Gandhi from SBA Mutual Funds. Please go ahead.

Hi, thanks for taking the question. Sir, just again trying to get some headway on the CAPEX side. As you mentioned, you drilled 500 wells out of which 100 was exploratory. So, what should be that annual run rate next two, three years, given the impetus on exploration that we are trying?

It depends on what government support comes.

Okay. But outside of deep water, how should we think about it? Maybe deep water is contingent on that.

Outside of deep water will continue to be today. Today, see, roughly we, last year we drilled how many, eight hills, seven hills of deep water? Eight wells. So, no, no, eight wells. Deep water, four wells. Four wells. But deep water, one well is equal to 100 wells of onshore.

Right, right.

I hope you got my tip. Thank you. 30,000 crore, we can't make it 75,000 crore. Got it, got it. India possibly can upload it. I won't comment on that.

Sure, sure. So, you know, which is where we are trying to guess that, you know, where will ONGC end up with on a run rate basis, given the impetus on exploration?

ONGC, ONGC's own budget will remain almost, you know, 31, 32. Okay, depending on if external support comes, then that much extra will do. Internal support, say, we'll do around, capex will be around 30-31,000.

Okay.

Thank you, sir. The next question comes from Vikash James from CLSA India. Please go ahead.

Thanks for taking my questions. I have a few of them. Firstly, on drywall write-offs, this was possibly your biggest quarterly write-off. Are there elements of some one or two really large wells, and, you know, in terms of your overall exploration spend of the 33,000 crore, how is that likely to be in FY27 versus how it was in FY26?

So our exploration expense is typically 8 to 10,000 crores per year. And I told you that is likely to, just one sec. So one answer is that we'll keep at same level, but this year, in your last quarter write-off, it is not, this abnormality has come from a very, very paper process. Because we had a write-off, we had a block, and which government took it away, and where we had DSF-4. So we had drilled something, some well, and since we did not develop, because there was a commerciality issue, so government took it back. So in fact, we had to write it off, because the asset itself went off. So therefore, we had no choice but to. That was around 1,500 crores. 1,800 crores. So, our normal, whatever was there is normal. This one exceptional item came. I'm not saying exceptional item in two sense. One-off. One-off item came.

Not normal.

Otherwise, you can be rest assured that you are in safe hands.

Of course, sir. Just, you know, I fully appreciate the challenges and uncertainty that exploration brings in and ENT brings in. But nonetheless, with our best understanding and best guesses, from whatever you've said, just to kind of build on to that, you said by September, October, all wells of Daman project will open up. And then soon after is when we will get to peak production. Should we take that as by December is a good guess on when you should get to about, what is the peak production? 5 of MSCMD, right?

No, no. Peak production typically is one year away, one, two year away, correct? Minimum two year away because the reservoir takes time to mature because of the flow and all that. So, typically, different fields have different timelines, but definitely you can expect that, you know, good quantity will start flowing by then. Okay. So, I mean… But peak will be still away. But peak to average will be how much? That is geologists and reservoir guys to answer.

The peak production is still more a 20, 27 story or 28, is it? 27 for Daman.

27, 27 you can take it. But peak is, again, a statistical number. 0.08 changing is also peak changing. So peak, peak is, when peak will come, it is normally, normally oil field has, a gas field has a 15-year profile, suppose it has. So third, fourth year, it will peak, then remain plateau for seven, eight years, and then it will decline. So this is a typical, you know, growth, death cycle of a well.

And the expected peak here is about 5 mm SCMD, is that roughly the number that we are looking at?

Yeah, roughly, roughly, roughly. Because this project has some, you know, additional facilities. which creates, you know, more production from existing wells, other project wells too, because of the suction that it creates, well, it's a purely technical issue. So, but you can, you can, from this project, you can expect five, 4.89 to be precise.

Thank you, sir. The next question comes from Gagan Dixit from Elara Securities. Please go ahead.

Thanks for taking my question, and also thanks for giving the very elaborate description about the recent developments in the oil decision. So, my question is about the CAPEX outlook, sir. Now, sir, given that government is giving lots of incentives to the upstream companies, so do we see the possibility that at least the exploration CAPEX will meaningfully increase Okay, okay.

So, first of all, it never said 20 weeks over, So, it can be 20 years, one rig, one year each, one rig each year. Okay. So, second, I don't know from where they picked up that news, but I will not comment on that. But I can certainly comment on two, three facts. That for next two years, we have to drill around 16, 4 plus 8, 12 plus 3. 15, 16, water wells. So I can give you two, three-year visibility, and those will be drilled from our conventional budget that every year we have been spending. Most likely, you know, big money from government will start flowing from 27, 28. 26, 27, I don't see any, you know, big spending coming on government head because, you know, we have to – you must have seen DGS has already – Government has already started picking up the bill, because government has already that has floated 10 percent. One is for entire eastern offshore 2D survey, which is also going to be thousands and thousands of crores. And second one is, yesterday, for yesterday, it came with 3D seismic reprocessing. So government has already started picking up seismic. And And well will not come next, this year, this I'm sure, because seismic will take some time. And based on seismic result only, government will decide what to assist, how much to give, in which well. So I'm sure that policy, let government document come out. Government is not yet official. All government is official about is they have floated two tenders from their kitty, from their office, Thank you very much. So, basically, you know that we have two-third, one-third there also. ONGC two-third is – in ONGC ENP, two-third is offshore and one-third is onshore. Production-wise. So, in fact, some numbers will come from Gujarat, because Gujarat, roughly, we produce 4.5 million tons, and some efforts are on for, you know, some – because every year we explore and some new wells are found, so that will get produced. And also, enhanced oil recovery of Gujarat assets are very high, because we expect there, but these are all, we can't quantify it, unfortunately, that how much and all that. But definitely, we will do everything possible to increase production, but how much and all that, we can't say. But two things I'll just reiterate, that we have great hopes from some of the, you know, particularly after this one last year discovery, that we'll try to develop as fast as possible.

And so my final question is about how much is the exploration that expected to be deployed this year as compared to the last year, especially in the offshore.

So, that question is very dangerous for us. Because what happens, the moment we answer, cartelization happens. I hope you should not ask this question because when supplier side gets all the information and then we end up paying more. And that certainly you would not like because you are also taking good share in your profit. So, please do not encourage this number of rigs and all that. We play the card to suit the market. So, we can't play off the market by, you know, disclosing our numbers. So, in fact, but one thing I can show you, Ongc is the first company in the world whose tenders say now that minimum one rig, maximum we will decide depending on price. I think whether you have seen this pattern or not, last three tenders of rig is mentioning this language. So, we are also becoming unpredictable.

Thank you for the opportunity, sir.

I hope I am audible.

Sir, my first question was most regarding Copan.

You mentioned that, you know, you're obviously on the way to the two VLEs. Can we get a little bit of granularity in terms of how much will the cost do once we have to start importing it? I mean, what I mean to ask is that if today, let's say, I'll answer you.

You'll get your answer very quickly. You know, in fact, imported E10 is $9, even today, okay, because $3 is Henry Hub, 1.15 you multiply, and then you have liquefaction and transportation. So, typically in $9, you are home. Against that, today, we are buying LNG from open market at $18, and new well gas at, if Opal was allowed to buy, at $14. Today, this month, new well gas is $13.91. So, you got your answer in this figure?

Sir, if I can ask a small follower, then what are the timelines we are looking at where we can... 28.

Our ship will be here in 28. Naturally, the moment we have ship, then we have, import will start. Then, quantity is not a problem in US. Only thing, ship is not there. Samsung is ordered on Samsung. Samsung delivery is December. December 28 is the delivery. So, December end May, then ship will come.

So, FY29. FY29 is, you can sort of start. Yeah, exactly. And the second question, if I may. Yeah, sorry. May I ask another question? Yeah, please, please, please. The other question was with respect to the Western offshore and the entire TST, if I can try to understand what was the decline rate for that entire region, even the range, before the TST, and what do you sort of expect it to be, let's say, by FY28, when you said that at least one to two years of work is required for meaningful results to start, you know, coming through. So now that the entire western offshore has been handed to or is going to be worked on by the TV, by FI28-29, you know, given that it is 60% of oil and 70% of gas, can we see a meaningful arresting of the entire decline rate for ONG? Is that a fair way to look at it? Yes.

Yes. Answer is decline rate, not decline rate, arrest and further growth. That is the commitment from next year. Okay. That is the commitment in the tender itself. The decline rate, decline stops compared to the last year base, and growth happens. We have been struggling with the decline for last 90. I'll give you some number, which will be of interest to you. And our ONGC peak production was in 95-96 in Western offshore, which was 39 mm TOE, oil plus gas. Last year, we have produced 26.18. It means roughly one-third of volume declined in the intervening period of 30 years. Okay. Now, this is likely to go up from next year. Okay. We speak on 31-32.

I hope I clarified.

Thank you, sir. The next question comes from Vikash Jain from CLSA India. Please go ahead.

Hi, let me just ask, sir, let me just ask the questions quickly, quickly, so that, you know, we have not cut off, because these are some very important questions. Firstly, is, we were talking about daman itself. So, your 3 MMS CMD additional that you asked for new, that you suggested in new oil gas going from 9 to 12. Should I assume that this is largely what Daman should possibly come, you know, although it will peak next year, but the 3mm SCMD roughly is what you hope will come.

Yes, yes.

Minimum 3. Minimum 3 will come. Minimum 3. Yeah. Sure. And on KG Basin, just to kind of, I know there's a lot of language, the one that was there in press release, something that you have kind of put in as well. Just to kind of understand that in a more clear way, the geological challenges that you faced or the surprise that you encountered was largely linked to the oil part or the liquid part of the production. The gas bit has just not started because of the delay in the platform. So the oil part is where you are going to handle that, and you've kind of figured out a solution. You'll have to possibly drill more wells, and maybe in about three, four quarters, you expect oil production to, again, go back to the kind of expected levels which it was. But the gas bit is only going to pick up from after July, August. Is that understanding correct?

Yes, 100%.

You are absolutely right. Sure. And so the current gas production, which is at 2.3 MMS CMD, that once more wells are added in July, August, how should I expect that to kind of ramp up? Should I expect that by the end of this calendar, this will go to 5 or so or even higher? And then when should I expect?

So, so, having, having experienced, you know, you know, 98 bar 2 is, predictability is low, so I, but definitely you can, it can, it can vary anywhere to anywhere, but I am saying minimum to max, so that number, I will leave it to you to guess, but definitely it will be at least, at least, at least the minimum size also should be handsome for you.

Okay.

So many numbers, no, boss.

Thank you, sir.

Because last time we gave you a number and then you were all, you know, exact number and all that. But you have to, you know, you have to, because exact number we can't give, but we have some view, but, you know, geology is geology. God has created geology, man has not created it. So we'll have to wait for July or August to see.

Thank you, sir. The next question comes from Shabri Hazarika from MK Global. Please go ahead.

Yeah, good afternoon. Two questions. Firstly, in terms of your production uptick, so possibly daman and kg 98 by 2 gas, so both of them will probably add up this year, and DSF 2 from next year onwards. So, against that, what could be the natural decline for the existing assets?

So, yes, what you said is correct. This year, basically three major things. DSF is next year, but 98 bar 2 gas this year, and this year. You are right. And plus, you should also, one or two mm SCM gas, there are multiple projects going on. So, those we don't count because that's not counted in what we have explained to you.

Right, sir. But this is against a natural decline of 7 to 8 percent. Is that right?

More or less, yes. Because our natural decline is 7 to 8, but we compensate 3 to 4 percent by interventions. So 2 to 3 percent, that number I gave you, that says it all. Because in almost 95 to 30 to 25, in 30 years, we lost one-third. So you can derive your own inference that how much we lose. Roughly 1 or 2 percent every year we lose. After setting off all the efforts of 7 to 8 percent natural decline, 5 to 6 percent we make up by all the means, and then 1 or 2 percent further falls, unless new field comes in. And new field came like DUDP is a new field, DSF is a new field. Next year will be a bigger field than this. So these all fields will, you know, add. But old fields with old interventions, with all the conventional interventions, it is very difficult to hold on to even the current level. So naturally, ONGC is one of the, you know, I should say that, you know, basically 7% to 8% decline is always kept at 1% to 2%. And that is something ONGC should be proud of.

Got it. And second question is on this Q4 results. So, C2, C3, C4 production as well as relations, earnings, that has fallen significantly. Was there anything exceptional during Q4?

So, you know the reason? Because of the three reasons. In fact, because of this March, we took a heavy, because every allocation got diverted towards something else. So, naturally, WAP got reduced because the gas got diverted for making more and more LPG. And LPG prices are lower than crude. Opal operated only at 60% in March. 60? Less than 60? Less than 60% in March.

So this will continue in Q1 also, till the time that entire allocation thing gets normalized.

Opal is now working at what level?

Right now, it's 60, but you are planning to start the operation by this month.

Right now, it's 60, but I'm told that it will be at 80-85 within 4-5 days, because something has been lined up.

And even the standalone C2, C3, C4 will recover, or that will remain at the Q4 levels only, or March level. Yeah, both the things are completely connected, that the entire C2, C3, C4 reported in the standalone business goes to Opal only.

We are not running on gas. He is asking about the wrap of the wrap. Some quantity got diverted because, you know, for LPG. That we do not know till the West Asia crisis is over.

Okay. Fair enough, got it. Thank you so much and all the best.

Next question comes from Vikas Jain. Please go ahead.

Sorry, I keep getting pushed out. One thing that you missed.

You chose to. You get pushed out or you chose to get, you know, some other call and therefore many times we also do this. The operators just shut me out. So, Brazil,

there's some update there as well in the Sargipayalagos thing. So, could you please share that bit as well? And also on this…

Great. Yes, now I'll ask MD, MD OVL. What is the question? No, Sargepe Alagoska. What is the question? Yeah, BM3L4, as you call it, it's in Sargepe Alagos Basin. We had an explosion for some time back, and now FID has been taken, SPS has been contracted, and we are going ahead with the development. So, we should get 1.3 million ton net to OVL additional production by 2030,

2030 and 2030, just oil in 2030 and gas in 2030.

1.3 million ton oil equivalent, you said, is the net share. That's for the 25%.

Yeah, per annum.

Yeah, that's the 25% for you, right? Yes, yes, please. Okay. And, sir, DSF, that you said could add another, you know, 4-5 MMS GMD to gas production, and that would be free pricing. So, that's roughly, when are you expecting that? Is it FI-28?

Yes, yes, FY28, it can't get delayed further. It has got delayed for different reasons, but definitely 28, yes.

This ramp-up is likely to be quicker because this is less complicated geologically. Yeah, it is.

It is a known field. See, the sun offshore is, you know, is many. So, it is less, it is more predictable. Sure. Yeah, that's what I meant. Okay. Okay, sir. Thank you.

Thank you, sir.

We're done with all the questions.

The next question comes from Nitin. Please go ahead.

Hi, sir. Thanks for the opportunity. Again, just a bookkeeping one from my end this time. So, our operating expenses are higher in this quarter and also for the year. You did mention the GST bit, but what is, are there any one-offs in this quarter particularly? I mean, as I guess our regular net of about 5,500 to 6,000 crores, we are at almost 9,000 crores of operating expenses.

For Q4, the GST on royalty, which already DHR additional charge, DF has already explained, that is around 235 crores, and 262 crores relating to CAG 98 bar 2, umbilical written off, as for the opinion of ITI, we have to make the provision for old house timing, recoverable also 257 crores, And one provision for stores and stores around the 280 crores. These are the exceptional items, one-off items, which resulted in Q4 operating expenses higher.

So, if all this has added up, it's just about 1,000-odd crores. I mean, but we are at, as I said, I mean, last quarter operating expenses were 6,500. Now we are at 9,200. So, is there anything else that we are missing over here?

I don't see the GST impact, as the chairman has already told, from 12% to 18% it has increased. And the other thing is exchange rate fluctuation, which rupee depreciated by 11%. So that has also impacted the offshore.

Great, sir. Thanks a lot. And lastly, before I let you all go, if I can give us a regional breakup of your CAPEX spend, if that's possible. How much are we going to spend onshore, and how much offshore, specifically in western offshore, and how much of this, you've given out the exploratory number, how much of this would be in development and IOR, EOR program, the 32,000 crore we spoke about?

70-30. 70-30 is offshore-onshore ratio.

Okay. Any number you can give me, sir, for western offshore?

Largely, 70% you can say that it is Western offshore only, because we have hardly one or two wells, maximum two, three wells in 98.2. So, most of the money will go to Western offshore only, because Western offshore is still more humidity and productive.

Sure, sir. Thank you so much, sir.

Next question comes from Mayank Maheshwari from Morgan Stanley. Please go ahead.

Hello, sir. Thanks for the call. I was just focusing on the cost side. You had a great reserve replacement ratio this year as well. Now, in terms of cost structure, if I was to kind of think about you've been highlighting of how you're focusing on reducing operating costs specifically and CapEx costs. In a dollop of BOE basis, can you just give us a sense of what was the region of, in terms of cost-saving initiatives that helped you in fiscal 26, and what are you thinking for fiscal 27? And specifically with the BP tie-up, is there any cost savings that we should be thinking about?

We had a 5,000 crore plan first phase. Then we have another 5,000 crore allowed to convert into per barrel. So, what, 500 million for 40 million tons? So, 500 million for? 40 million tons. So, 40 million tons, how much is it? 40 million tons, 10,000 per ton? 1.8 dollars, roughly. Thank you.

There has been a significant depreciation. So these numbers become different when you look at it. So that should be kept in mind.

That's why I was thinking about it more from a dollar per BOE basis rather than rupees or anything of that sort. So that on a per unit production perspective.

We'll have to discount the depreciation, dollar, rupee depreciation, no? Because we had from 5,000 crore is in Indian rupee, we had said. So most of it, we have realized almost 4,000 crore. But we got negated by two things, that is the dollar exchange rate and GST. GST, 12 became 18. But we are on course, but we will continue to do. We have another 5,000 crore lined up. So it will take around a year or so more to realize because the effort you make today, result will come later. So the cost side, we are now very comfortable.

Thank you, sir.

That would be the last question for the day. Now I hand out the floor to Sri Ogesh Nayak for closing comments.

Good afternoon. We hope you have answered all the queries from the participants. In case if any further queries are there, they can reach out to our investor relationship cell. I thank chairman and CEO for addressing the participants and answering all the queries of the participants. I also thank MDOVL, DFOVL, DHR and Additional Charge Finance, the ONVC, and all my senior colleagues for participating, and also all the participants for participating in this conversation. Thank you.

Thank you. Thank you. Have a great day. Thank you.

Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Doorsabha's conference call service. You may disconnect your lines now. Thank you and have a pleasant day.