Oil & Natural Gas Corporation Limited (ONGC) Q1 2027 Earnings Call Transcript

Good afternoon, ladies and gentlemen. I am Adri, moderator for the conference call. Welcome to ONGC's Earnings Conference Call for quarter ended 30th June 2026. We have with us today, Sri Anupam Agarwal, Director of Finance and team who will interact with investors and analysts to discuss earnings for Q1 of financial year 2026 to 2027. As a reminder, all participants 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 the conference call, please signal an operator by pressing star and then zero on your touch-tone telephone. Please note, this conference is recorded. I would now like to hand out the floor to Mr. Sri Anupam Agarwal for his opening remarks.

Good afternoon, ladies and gentlemen. I am Anpam Agarwal, Director of Finance, ONGC. I welcome you all to ONGC's Earning Conference Call for the first quarter of FY26-27. Thank you all for joining us today. I am joined here by my colleagues from ONGC, Mr. Ajay Kumar Singh, President Planning and Transformation, Mr. Satish Kumar Divedi, Chief JVNBD, Mr. Yogesh Nayak, Chief Corporate Finance, Dr. Ravindra Singh Nagy, Chief Treasury and Investor Relations, Mr. Sanjay Kumar Sharma and Mr. Prakash Joshi from Investor Relation Self, Mr. Akhilesh Tiwari, Head Corporate Accounts, and Mr. Manish Kumar from Exploration Team. Mr. Mukul Bhatnaagar and Mr. D.K. Agrawal have joined from ONGC Videsh Limited. ONGC's financial results for the quarter and 30th June 2026 were approved by the Board on 4th August 2026 and have already been disseminated through the stock exchanges along with our press release. This has also been sent to the analysts who are there on our mailing list. The first quarter has been the strong one for ONGC. We reported stand-alone growth of 46,460 crores, an increase of over 45% over the corresponding quarter of the last year. Stand-alone profit after tax stood at 17,034 crores, registering a robust growth of over 112% year-on-year. This quarter also witnessed the highest-ever stand-alone quarterly powerful tax of 22,088 crores. Our average good price realization has been 99.45 crores. Despite inflationary pressures and adverse exchange rate movements, NGC maintained operating expenditure broadly at the same level as the corresponding quarter of the previous year. This reflects the impact of sustained operational action initiatives and a continued focus on optimizing controllable operating costs across the organization. On a consolidated basis, the NGC group reported a profit after tax of 6,554 crores during the first quarter of FY27. While the group's consolidated performance was impacted by HPCL's net loss of 12,265 crore, primarily due to under-recoveries of petroleum products, following the sharp increase in crude oil prices during the West Asia crisis, this was substantially cushioned by the robust performance of other subsidiaries, particularly ONGC VDESH and MRPL, underscoring the resilience and diversification of ONGC Group. The quarter reflects continued progress across three important transformations that are shaping the industry's future. Transforming our gas portfolio, transforming our mature offshore assets, and transforming India's deep water exploration landscape. The first transformation is unfolding through the growing contribution of new well gas. During the quarter, revenue from new well gas reached nearly 4,000 crores, generating an incremental realization of about 1,900 crores over the administrative pricing mechanism. New well gas now contributes approximately 38% of revenue from our nomination gas portfolio, demonstrating the steady migration towards a more remunerating gas basket. The contribution of gas to ONGC stand-alone revenue has also increased from around 25% in FY25 to 28% in FY26, and as the share of new oil gas continues to expand. On the production front, overall oil and gas production during the quarter remained broadly stable. The year-on-year variation was primarily attributable to temporary operational factors including reservoir complexities in KG Deepwater 98 by 2, pre-commissioning activities associated with major offshore projects, pipeline replacement activities in western offshore, and lower gas offtake from certain isolated fields due to customer site disruptions. Most of these are execution-related challenges rather than structural concerns regarding our asset base. With the progressive commissioning of strategic projects such as the Daman Upside Development Project expansion of TSP program and monetization of DSF, we expect the production trend to progressively improve in the coming quarters. Our second transformation is centered on renewed trust in Western offshore, under which ONGC is implementing one of the largest capital investment programs in the history of its Western offshore operations with projects exceeding $40,000 crores under various stages of execution. DGN compass pipeline replacement, reservoir and pressure management, enhanced water injection, production system upgrades, and several field development initiatives being undertaken. In collaboration with our technical service partner, BP. Encouraged by the positive outcome, under the first phase of the partnership in Mumbai High, we have now expanded this model across the entire western offshore portfolio. During the quarter, Mumbai High TSP continued showing encouraging results, with oil production reaching around 107% of contextual baseline production, and gas production around 113% of the contextual baseline. The third transformation relates to deepwater exploration, which we believe represents the next major frontier for India's upstream sector. Recent approval by the government of Samudra Mamdhan, the National Offshore Exploration Scheme with a total outplay of $84,084 crore is a landmark initiative that reflects a decisive national commitment towards unlocking India's deepwater hydrocarbon potential and creating a favorable investment environment for offshore As India's flagship E&P company, ONGC will play a central role in this national mission, during the quarter, we achieved an important milestone by commencing dealing of our first deep water expertise well in the Mahanadi offshore basin under the Samadramanthan program. We continue to make steady progress in strengthening our green energy portfolio. Through OGL, our renewable energy portfolio has now reached 2.853 GW, supported by both organic expansion and strategic operations. ONGC awarded a 300 MW ISTS-connected solar power project for capital consumption last year, and corresponding 250 MW wind power project has been awarded in June 26. To conclude, our immediate focus is on the successful execution of major production projects, timely monetization of new developments, and accelerated offshore exploration. With that, I conclude my opening remarks. Thank you.

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and 1 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 1 again. Participants are kindly requested to restrict with one question in the initial round and join back the queue for more questions. The first question comes from Yogesh Patel from Dolat Capital. Please go ahead.

Thanks for taking my question, sir. On oil production side, if we look at the oil production on sequential basis, nominated field oil production has increased 1% Q&Q, while the ONGC-operated block NELP is indicating a sharp decline of 8%. So, just wanted to understand the nominated field oil production growth is backed by the TSP program at Western Offshore or is there any reason? That's one. And secondly, you wanted to understand on KG 98 by 2 production, what is the current rate of production there and how it has declined over the last three months? That would be helpful.

Yes, Yogesh, you are correct. Actually, we have been able to maintain the production. This is last year Q4 production versus the first quarter production. It is almost flat. There has been some decline versus Q1 of the last year. As I brought out various factors. Regarding the increase, you are talking about the nomination field. Yes, TFP is one of the major factors. Mumbai high is there, and there we have already reached about 107% of our baseline production. Regarding this 98 by 2, there has been some challenges we have been seeing, and the production of oil is currently around 21,000 barrels per day, and gas is around,

Okay, sir, just wanted to continue on the same question. As you have arrested on the nominated field side, kind of a production decline, natural production decline. So, how one should look into the FY27 and FY28, nominated field oil production guidance, if you could give us, it would be helpful for us?

I would like to give the total stand-alone production of ONGC for the next year. I see last year, our oil plus gas stand-alone production, excluding JDSR, was in the range of 38.87 mmT. So, this year, we expect to reach about 39 MMT, oil plus gas. The upside will come mainly from gas, because many of the projects like DUDP, which is already progressing, and by December, we'll be reaching it to MMSCMD gas. Yes, the CPP commissioning in the 1.3 MMS CMD will come, and TAPTI and Daman Wells, another 0.5 MMS CMD will come. There will be further upside coming from TSP 1 and 2, both are in place now. Some initial gains we will see on that side also. Lastly, sir, if you...

Yogan, just to add, as I was saying, these two MMSCMD would be over and above one which we are currently producing from DUTP. That means, by

third quarter, it would be three MMSCMD. Okay. So, we see about one BCM gas per year from the new developments which I am talking about. That is for the current year. And next year, another overall, almost one NMT OE of oil and gas gain will be there for 27-28.

Okay, sir. Lastly, just to break it down in a simpler fashion, can you give us a guidance for oil production for FI 27 and 28 and gas production for FI 27 and 28 if you have any numbers?

You see, I had told about 39 MMT for the current year and 40 MMT for the next year, oil and gas taken together. So, backup will be about… So, I think it would be 50-50 in next year. Oil and gas, both.

Oh, yes, sir. That's really helpful. Thanks. I will come back and thank you. Yes, sir.

Thank you, sir. The next question comes from Nithin Tiwari from Philip Capital. Please go ahead.

Hi, sir. Good evening. Thanks for the opportunity. Congratulations on a very good set of numbers in this quarter. Sir, my question actually was related to one of the items which were mentioned in the notes for your accounts and this is related to the arbitration which is going on. So, apparently the liability which is sitting in your contingent liability is a significant one about 15 plus to 16,000 crores which is almost like you know I mean could be considered to be a quarter of your operating profit as well. So, my question with respect to that is that was the communication which was sent by ministry, was that taken as a binding directive or I mean the decision was also evaluated on this law of independent legal advice that ONGC is not going to participate in this arbitration and given that you have not participated as a claimant, have you like in a way tacitly We accepted the demand which is made by government, and in that backdrop, I mean, you know, I'm just, what I'm trying to get at is that how have you ensured that your own economic interests are protected and also that of your minority shareholders' economic interests are protected, given that you are not participating in this arbitration?

Good. This is a good question. You know, this is an arm of government of India. So we go by the government directive, but at the same time, we try to ensure our economic interests are protected. So in this case, what government has given directive? The government, when we discuss with the government, there is no formal directive. It is a kind of understanding that we should not be going for this arbitration against the government. Two arms of government fighting with each other, it is not good. So what was decided in that discussion was that let the other party continue to be in this case, and what's the decision will be there, that will be applicable for ONGC. So our interest is also protected, and we are not in dispute with the government in the call. So that is the way. So I don't see there is any loss to the interest of any shareholder. What's the decision will be there, that will be applicable to us.

But sir, this is an outcome of your discussion with government or what was this an outcome of your basically discussion with the courts because court tomorrow might decide something as that only arbitrated parties will get the benefit and the party which has not arbitrated has accepted the demand and therefore is not liable to get any benefits out of this arbitration. I mean, that's the route courts could also take, right? I mean, given this is your own internal understanding. Is that is that the right read over here?

No, I will just like to say it is a joint venture case where both parties are the partners. So, it is not one party case versus other party. It is the joint venture versus the government. One party of the joint venture has gone in the court. Once a decision will be there, that will be applicable across. That is the understanding and that is the understanding of the government also.

Okay. So, basically, the outcome would be applicable to the JV consortium and not only to the parties arbitrating.

Yes. That is the normal principles of JV operations.

Got it. Okay. Thank you, sir.

Thank you, sir. The next question comes from Mayank Maheshwari from Morgan Stanley. Please go ahead, sir.

Now, sir, I had a question around what you talked about around the upside risk on exploration because of the government incentives that are being given around this Samujamantin program. Can you kind of talk us through in terms of the role ONGC will play in this? Because in the past five to seven years, you're not really seeing too much of high-risk ultra-deep water exploration drilling coming through on ONGC. And a connected question around that is the challenges that you started to face on KG. What are they and how are you kind of thinking about it in terms of resolving it as well?

Mayankji, it is a very good question. And obviously, it is anticipated also somebody talking about Sabutu Mankham. So being a national oil company, we will be playing the major role in this project. So your question is, last four or five years, we have not done some major deep water exploration activities. So, it is not correct. We have been continuously carrying out exploration about 100 wells we do, and last year also we drilled about four deep water exporter wells. This year also one static graphic well we have already drilled, another well we have spread. And this is basically recognition by the government as well as by ONGC, post-Hormuz, the kind of need of energy security for the country. So government is very conscious that energy security is very, very important, and for that, what is required to be done, that will be done. You would have also seen many of the initiatives which government has taken in the recent years, like fiscal stability they have given, the kind of new benefits they have given in the Oil and Gas Act, and new gas pricing, all that incentives have made a lot of difference in the process. With the kind of prices we are seeing, before Hormuz, the general consensus was coming that oil prices will settle down around 65. But now with this Hormuz crisis, there is a security layer which is coming on the baseline, and we believe it will be $75 plus in the long run. So that is our expectation. With that, many of the fields, which we thought might not be viable, are working out in the range where they are viable, and we will like to develop them for the energy security for the country. Same is the case for deep water, because at $65 or $60, if you see many of the deep water is a high risk, high reward game, and the size of reservoir, the economics has to be good to develop that. So, maybe some of the fields might not have been good at $60, $65 to explore, but at $75 plus kind of thing, it will be continuing to be very, very lucrative also and important for energy security. So, we are committed for this deep water mission of the government of India, and this is the first time in the history of oil and gas that government has allocated 84,000 crore fund from its own kitty for this new oil exploration, new oil and gas exploration. So, as national oil company, we remain committed, we will do. And because a major part of this is being funded by the government of India, so it does not have any major financial impact for the company, but at the same time, it gives an upside in terms of a new results we find and new oil and gas development activities we undertake. I hope I could clarify you.

Yes, I think just a follow-up around this was how does this incentives of close to around $9 billion that the government has given help you lower your breakeven costs to kind of develop any project on the ultra-deepwater or deepwater side? And if you can also give us a bit of a sense of which are the more prospective basins apart from Andaman, obviously, which I think you've been drilling, I think you can see in the country where you see prospects for ultra-deepwater and deepwater come through.

Again, you see this deepwater mission the government has announced is the first phase of that, which is applicable up to 2031. And that is mainly the exploratory phase. The next phase will develop beyond 31, once this phase results will be known. We, you know, each deep water well cost about 1000 crores. We do not know how much government of India will fund on that and how it will fund those details are still being worked out and will be shared in due course. But what's where the support will be coming, it will be reducing our cost of exploration, and obviously with that, the economics of the project will be better. If the export cost is lower, my economics will be better, and we will see how it will help us in economics at the feasibility stage when the substantial amount of oil and gas reserves are found. And regarding the area basin, Andaman, you are already told, Mahanadi is one where we have already spread it well, and this is the same basin where we had made earlier discoveries, Konark, and one more we had made. So that is one. And then we are also working in Kaveri. Kaveri is also one area where we will be doing something. And we are also going to participate in OLAP-10 in a big way, and a lot of blocks are on offer in deep water, and we will decide which areas in those basins we will drill. And will it be in partnership with global majors,

or you want to kind of do it standalone?

You see, deep water is a high risk, high reward. Our internal preference is wherever international partners want to come and join with us, they are welcome. We keep on inviting them, discussing with them. And we believe with this, the kind of incentives which government of India has given, and their major concern was fiscal stability. So that is already assured by the government of India. So some of the global measures will come. In the past, also, in one of the block, we had bid with DP and Reliance together. In the next round, also, wherever we find the global partners are interested, we will take them along for this deepwater mission of the Government of India.

Thank you.

Thank you, Sam. The next question comes from Vivekanen from Ambit Capital. Please go ahead.

Yeah, thank you for the opportunity. I have two questions. So, the first one is on the operational challenges that you are facing, which has led to production issues. So, thanks for the opening address. Just if you could elaborate on the execution milestones that you have now to improve or, let's say, de-bottleneck these fields so that the operational issues are resolved, let's say, by 3Q. That would be great. And secondly, did I hear it correctly that the TSP, results of the first TSP are that you are 7% higher than the baseline production? So, on an absolute sense, if you could help us understand the results of the TSP-1 areas that you covered with VP, if you can give us a sense of what the production was before the partnership and what is it right now, maybe if you give the absolute numbers, it will be more helpful. Thank you very much.

I will take the second question first regarding the TSP. Yes, TSP one was from Mumbai high field. So Mumbai high, when we talk about the gain is against the baseline. So, you know, general oil and gas sector, the fields have a natural decline rate, and that is about five to six percent. Over that, we see the increase. So, seven percent is coming over the natural decline rate of six to seven percent. So, overall, absolute term, the increase will be about 1% to 2% for Mumbai high. Gas is about 12% to 13%. So, there it is about 5% to 6%. And there, you would have heard in the last investor call by our CMD, he mentioned one thing, that is, ONGC is gradually moving from an oil-based to a gas-based. So, and that is the story. What had happened in the past, because the gas prices were not remunerative, many of the fields which were discovered, they were not remunerative. We were not able to develop. The prices we are having today, the new gas prices, many of those fields have become commercially feasible, and we are developing them, and that is how we are seeing that 40,000 crore worth of the projects are already under execution in restaurant offshore, and many more projects we are, Those are under discussion at the board level, and you will get to know in days to come. Regarding operational challenges, when you talk 98.2, it is more than operational. It is basically some reservoir-related challenges we have seen, certain surprises are there. We are getting it studied from the technical experts, and based on that, we will be taking further decision. But as far as Western offshore is concerned, that continues to be the flagship for ONGC Group. And there are many projects we have brought in. Last quarter, operational challenge was mainly pre-monsoon swell that impacted some of the offshore installation of platforms. And also, a lot of activities were going on. So during that process, you have to close certain well because you cannot continue with the production from the brownfield development projects. When we are doing the job on the same platform. So, those challenges are there, but we believe post-monsoon, we will be able to make up all that. And by the end of the year, we will see that production of oil will be almost the level of the last year, and gas will be higher by about 1 BCM.

Okay, that's very helpful. Just two follow-ups. So, how many wells are currently operational in KGDWN 98 by 2 for oil and for gas? That's one follow-up. And the second one is the rest of Western offshore, the new TSP contract that you have signed. Are you saying that because you have now transitioned to a new TSP contract, the wells that were closed will be reopened and the production recovery hinges on your work with BP in the western of the region?

I will take the second question first, and the first question I will hand over to our president planning. So, regarding the closure of well-doing execution of the projects, that is a normal phenomenon. It doesn't have to do anything with TSP or anything. It is a normal phenomenon. When you go install a new platform, you connect those platforms, some of the activity has to be temporarily stopped. So, that is a natural phenomenon. It will clear on its own. Yes, TSP is helping us in finding out how to develop some of the projects. They are trying to help us to decide the extraction strategy, what kind of platforms we should produce, how to optimize the surface facilities, so all those benefits we are taking. I will now hand over to Mr. Ajay Kumar Singh to give answer to your first question.

Yeah, good afternoon, I am Ajay Singh, President Planning and Transformations. The question related to 98 by 2, oil, how many oil wells we have opened. We have opened all the 13 wells, and it is being produced. And gas wells out of 7 wells, 4 already being produced, and 3 is yet to be opened. Once the CPP is commissioned, which is in progress, and we are planning to connect with the subsea wells and control system is going to be commissioned shortly, Lastly, we will start production from gas wells also. That is likely to start somewhere in the month of 2 by November. Hope I answered your questions.

Sure. Lastly, if you could help us with your peak production guidance for KGDWN 98 by 2, if possible to share on the gas side. Oil, I understand your challenges.

Gas, presently, we are producing near about 1.5 to 1.7 million meter cube per day, and with opening of balanced three wells, we expect additional 1.5 mm SCMD. So, all put together, it will be 3 million plus gas will be produced.

Right, and by when do you reach this peak, 3 million?

By Q4.

Okay, thank you very much, and all the very best.

Thank you, Tom. Participants have already requested to receive one question in the initial round and joined by the queue for more questions. The next question comes from Sabri Hazarika from MK Global. Please go ahead.

Yeah, good afternoon and congratulations on good numbers. So I have two questions but relating to OVL. The first question is, I just wanted to round up on the status of various assets of OVL, including Mozambique, the status of Sakhalin, Venezuela, and Brazil. So, round up on that, then I'll come to the next question.

Sanjid, I think OVL, you know, was passing through a rough patch for the last four years, post-Ukraine crisis. And the succulent asset, which was the most important asset of Opel Group, was not with us for about four years, because the government of Russia had taken over the asset and converted into an incorporated entity. Earlier, it was an unincorporated entity. Last year, sometime in November, December, we were able to take it back after meeting certain condition precedents. I hope you are aware. So I will not go into details for that. So that is one thing. And with cycling back in our portfolio, the OVL is back in the robust profit scenario. So last quarter, again, about 1,000 crore. They made this quarter again 1,000 crore. So you see the OVL, which was giving annually about 500 to 600 crores per annum. Now it is 1,000 crores per quarter, which is coming from cyclin mainly. And some flip coming from the higher prices. Then Mozambique again is a positive. It was in force measure last year, about August or September, this force measure was lifted. The activities are going on in full swing. And now we expect sometime in end of 28 or beginning of 29, the production will start from the Mojambik project. This is, again, a very important project from the national security perspective also. And GAS, we will have a share of about 3 MMT from that project. And that is just the initial phase. There are additional phases will surely be coming under this Mojambik project. Rajil BM Seal 4 project is there, where we are partnered with Petrobras, and that project is also going on well, and the work for FPSO has already been awarded, and we expect the first oil starting from 2030. So Venezuela is another evolving story, and you might be aware That we recently managed to get OFAC license. So now we have full freedom to work on Venezuela project because earlier we were restricting our operations there because of the sanction related risk. So those risks are behind us. The government of Venezuela has already enacted the new petroleum law in that they are giving some additional fiscal incentives for development of the resources. ONGC team is already in touch with the Venezuelan authorities in association with our JV partners. We are there in two projects, And Venezuela, you know, is the place where largest oil and gas results are found. It is the number one in terms of results, not the Saudi Arabia. So it is a focus area for ONGC. All these projects are shallow depth onshore projects, where ONGC has full expertise, the kind of projects we produce from in Mahsana and Ahmedabad, that kind of place is there. So we are very good for Venezuela, and we believe very soon we will see some positive development, the new agreement signed, and we are taking over the operatorship for some of those projects from BDVSA.

Got it, sir. Thank you so much for the explanation. Just a small follow-up. So your OVL bet, excluding impairment, was 2260 crore in Q4. Now it has come down to 1140 crore despite oil prices going up. So I've seen the revenue has gone up, but I think equity profit share, that number has gone down. So can you just give us some clarity on how the accounting is happening here and why we are not seeing the benefit of oil prices and when exactly was Sakhalin accounted back into the accounts?

OVL is not one single project, single field. It is a mix of multiple fields in multiple countries. Each country has its own fiscal. And each fiscal country has its own geopolitical situation. So, first, you talked about SACLIN. SACLIN, we could get back in December, and we started accounting for in our profit and loss from January 2026. So, that is the first. The second thing is, this quarter, there was some surprise you are talking about is mainly our realization from Russian assets were not as good as they should have been. So, you know, because of The kind of geopolitical situation is happening. So, Russian assets, the realization, it was not at the same level because of the price cap related concern. But otherwise, OVL has done well both in succulent as well as in other assets. And in OVL being in international market, most of the products we get international prices.

Got it, sir. Understood. Thanks a lot and all the best. Thank you.

Thank you, Sam. The next question comes from Vikash Dain from CLSA India. Please go ahead.

Thanks for taking my questions. Yeah, thanks for taking my questions. Am I audible?

Yeah, you're welcome.

Yeah, yeah. So just a couple of clarifications. Firstly is peak production of the KG asset. What is it likely to be for gas, and by when are we going to reach that peak production?

Okay.

I'll answer the query. We, with commissioning of CPP, and again, we have some plan to reactivate and enhance the production from 98 by 2 gas wells. We are expecting more gases, and it will be in the 6 to 7 million. It will be somewhere, not in Q4, because we have to reenter into gas, that EU field gas, once we have to reenter and we have to start production from there. So somewhere, you can say that Q4 of 27, 28, we will be reaching this year.

So, we are right now at one and a half. You say that we will be about three plus in this October, December, and that three will then go to about seven MMS CMD in another three, four quarters. Is that how one should think about it? Yeah. And the other thing that you also mentioned was in the October-December quarter, there could be another two MMS CMD incrementally coming from Daman upside, plus this one and a half, and there was another half that you mentioned from the Takti project, right? So there is going to be an incremental 4mm SCMD, which on your base is roughly equal to 7-8% increase in production in the October to December quarter. Is that roughly how I should be looking at?

That's correct. You are correct, but it is not October to December. Some part of that will be spilling over to January to March.

Okay, the exit for December quarter is how we should think about it, not the average for the quarter.

Thank you very much.

P-grade. How should I think of the timelines around that, and what are you thinking of handling these challenges?

Yeah, this is a clarification for 98 by 2 oil wells. We are facing the problem of complexity in reservoirs, interconnection between one reservoir to other reservoir, And that study is in progress with world-renowned geological study center, and they are providing input also. And based on their input, we will be reworking out, and wherever required, we will be re-entering the wells. And then we work out the strategy and plan how to do it, because each well, whenever we are going to enter, this costs more than 500 crews. So each, it is unlike shallow water where we can go and it is cheaper one, but deep water has the costly one. So we have to work out in totality cost related to re-entry on the wells, vis-a-vis economics, how much oil we are expected to gain from there. So, study is in way. So, we will be coming out shortly with the development of strategy.

So, at this juncture, there are no pressure decline or water ingress challenges. It's just the contiguity that we are talking about, right?

That's correct.

So, then, Ari, you have to re-strategize accordingly. Final thing on Samudra Manthan, you mentioned that you've drilled one well for, you know, So, this latest well will be under Samudra Mantan. So, would this be considered to be one of, this is not an exploration well, right? So, this is something which will be part of you getting more, I mean, how will this feature and would you get some reimbursement from the government? How does it really work?

You see, this part is still under the box. We are also privy to the same information which you are, which we got from the press release from Government of India. Details are still being worked out. But yes, once the government has decided, they will fund that project. So all the wealth which will be approved, which will be the part of the Samadhi Mantan, a part of that will be reimbursed by the Government of India. So that is the way it is expected to be.

So the expectation would be that you would possibly approach the government that this is where we would like to drill, and they will approve a particular number linked to that well. Anything incremental will have to come from your pocket, and the remaining will be reimbursed. I mean, the amount the government has agreed on will come from the government. Is that how one should think about it from the very basic preliminary understanding that we have?

Details are not yet available, but what we see, it is not going to be some surprise incremental cost which will be funded by government or ONGC. It will be whatsoever will be the total cost. Part of that will be borne by the company. I think part of that will be made by the government. So it is basically to take a part of the risk of exploration from the oil explorer, and that is the mission government is looking into to ensure energy security of the country.

Okay, and if there is a discovery, that discovery belongs to ONGC, or will you have to get in another partner or anything like that? I mean, that reserve, the development production will come for ONGC.

Discovery will definitely belong to the owner of that block who has been awarded that license. So, the blocks where we are going alone will be the owner of that discovery. In the blocks we are going with our partners, it will be the joint venture who will be the owner of that discovery.

Okay. And any guidance on new well gas, how that is going to, that is increased to what numbers? You said that at the start of your, in the initial comments, what percentage of gas is new well gas, and where do you think this is going to be, say, 12 months out?

You see, as far as in volume terms, this quarter, it has already reached 19%, and we expect it will continue to grow up as we develop more and more gas withdraws, more and more new wells we drill. It will continue to grow up, and in revenue term, this quarter, it was 38%. So, because we got good price this quarter,

and in sales quantity term, it is around 24%. From last year, 17%.

Okay. Thank you, Anupamji. Thank you, Prakash. Thank you.

Thank you, sir. The next question comes from Varadarajan from Antics Talk Broking. Please go ahead.

Thank you for the opportunity. Sir, one is about the Opal, if you can provide us the details about the EBITDA fact and the operating rate.

Okay, thank you, Patrajanji. Opal, you know, last quarter, it could not do as good as we expected. There are kind of transformative steps we have taken for Opal in terms of infusing equity capital, taking up security in terms of corporate guarantee from the From parent company, ONTC, reduce their financial burden. Other steps we had taken regarding this exit from SEJet. So all these things had made a major impact on Opal workings. And last, this Q4 of April 26 was very good, you would have seen. This quarter, you know, ultimately, their feedstock is linked with international prices of gas and nafta. With the Hormuz crisis happening, our calculations had gone wrong. And because of that, the first quarter of FY27, EBITDA, we were 57 negative, whereas FY26 EBITDA was 1207 crore. And positive. So, that is how OPAL is, but we believe going forward, OPAL will be doing much better because of two, three factors which you are also aware. We have decided to exit from C2, C3 also from the SEJet, and that will bring about 1,000 crore in EBITDA term for OPAL. The other thing What is going to happen? We have already entered into MOU with Mitri, and we are building up ethane carriers. We'll be bringing ethane from international market, and with that, our feedstock cost will come down. So, present challenge is basically relating to the feedstock. As soon as the feedstock-related challenges are over, Opal will be in much better financial health.

It's okay. Just because of the harvest crisis, the plant runs on two feeds. Gaseous feed and NAFTA. NAFTA prices went up from $600 to $1000, and gaseous feed has stopped. As in when gaseous feed starts, the plant will be normalized.

These are abnormal times and different parts of industry are impacted differently. So you would have seen how the marketing companies have been impacted, how the PEDCAM companies have been impacted, how the upstream companies have been impacted.

Yes, sir.

So, in the context of the Samudra Mantan, do we see a change in the CAPEX program? Can I see the overall CAPEX budget go up, down for the next two years?

You see, we have been traditionally spending about $3.5 to $4 billion on CAPEX, and that number remains. So, that is the same situation. So, we will see some upside in exploration Thank you, sir.

The next question comes from Amit Murakal from Access Capital. Please go ahead.

Good evening, and thanks for the opportunity. Firstly, on the survey expenses, usually pre-monsoon quarter, the survey expenses are pretty high, but this time I see that not much expenditure has been I just wanted to understand the reasons for that.

Yes, Amit Jai. Survey, we had faced some challenges in contact finalization because the kind of rates we got in our tenders, they were not workable. So we had to take a step back and go for re-tender. Now, the major survey contracts have already been awarded, and you will – this October onward, post-monsoon, you will be seeing a big activity coming in the survey part.

Okay. So, fair to say that it will catch up for the, let's say, the lower activity in Q1 in second half then?

Yeah, it will catch up. It will – more than catch up. More than catch-up, because we have lined up a big exploration program, and for that, a lot of survey activities will be happening, both to support Samudur Manthan and otherwise also.

Right, right. So, that expenditure line item then will go up basically in the second half. Yes, in it is. Right. And just secondly, on the crude realization, I see that this quarter was about $3 broadly on an average above Brent. So was that, like, because of, I know that, like, benchmarks, product cracks, everything were all over the place. So just could you explain that? Why did you get this premium versus usually you get a, maybe a flag to a marginal discount to Brent?

This quarter, our realization, we reported about $99 per barrel, and Brent average is also around $97-$98 per barrel. Yeah, it's $97. So, we are in the same range.

Yeah, I know, it's broadly the same range, but like usually, like at least the data that I see back to 2-3 years, like on a quarterly basis, usually it's like 0 to minus $1 versus Brent. And this time it's about close to two and a half, three dollars actually above Brent. So I know there's a lot of volatility in the quarter. Is it purely that or like there was some formula-driven increase which could continue maybe due to also?

There is no formula-driven increase. This is a volatility which has happened in this quarter. Otherwise, in general, if you see the kind of arrangement we have with our oil marketing companies is that Brent is the base. And Brent plus 1%. But when we account for the VED is about 5%. So, 4% comes to our kitty. So, that is how the net realization we report in our box.

Got it. So, purely the volatility. Fine. Fine. Yeah. Just wanted to understand those two things. Thank you very much. Thank you, sir.

The next question comes from Hardik Solanki from ICSA Securities. Please go ahead.

Thanks for the opportunity, sir. So, two questions. One of the candidates, you know, guidance on what is the client capex for the Ma and Adhi well, and, you know, when the result is expected from this, that's number one. And secondly, what is the full year guidance for 27 and 28?

What is the second question?

And what is the full year capex for, you know, 27 and 28?

Full-year capex, I already told it will be $3.5 to $4 billion range. So it depends on how our project progresses. That is the range we will maintain for the full year. And regarding Mahanadi capex, well, it takes about three months to delay deep water exploration well. So we spread it around 25th of July. So you can expect the result sometimes in September end. And it is about each deepwater well-being in the range of 800 to 1,000 crores, about $100 million for well.

Perfect. Thank you.

The next question comes from Yogesh Patel from Dolat Capital. Please go ahead.

Thanks for an opportunity again, sir. The sales to production ratio has sharply declined in case of gas from nominated as well as gas from the JV fields. Any particular reason? Earlier, it remains in the range of 79. It has declined in the range of 75-76 in this quarter.

I think, yes, Yogesh, you are aware that we talked about in some isolated areas, the customers could not take that gas because of pricing challenges or some operational challenges. Because of that, our sale could not keep pace with the production. So, that is the major reason.

Okay, and the second question, sir, LPG production segment and the sales segment. If we back calculate the LPG price realization based upon the data provided by the company, the realization comes around $896 per ton, which is much, much higher than the Saudi LPG benchmark price. And this premium is much higher. I mean, $120, $130 per ton higher than the LPG benchmark price. Any reason, sir, a higher realization on the LPG side?

You see, these were volatile times. Because of post-hormos, the market behavior was not normal. So, it is basically because of those volatilities, we could get a higher realization during that period.

But our LPG price realization is marked to Saudi CP or something else, sir? Just wanted to, on understanding that.

That detail, I will not be able to, I am not having immediately with me.

Yeah, Yogesh Chai, I will share those with you.

Our IRC will get in touch with you and give you any clarification further if you require on that.

Sure, sir. Thanks. Thanks a lot and all the best. Thank you.

Thank you, sir. Now I hand over the floor to Mr. R.S. Nagy for closing comments.

Thank you, Madam. Good afternoon. We hope we have answered all the queries raised by the participants. In case if any further queries are there, they can reach out to our investor relationships itself. I thank the Director of Finance, the ONGC for addressing the participants and answering all the queries for the participants. I also thank all my senior colleagues for participating and also all the participants for participating in this conversation. Thank you very much. Thank you.

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 evening.

Thank you.