ONGC hits profit, mega merger planned

ONGC nearly tripled its net profit for the third quarter of financial year 2016/17 (April-March), India’s largest NOC announced on Tuesday.

Profit for the quarter was recorded at USD 642 million (INR 43.5 billion), up from USD 216 million (INR 14.7 million) in the third quarter of 2015/16. However, the company did not hit expected profits due to a doubling of exploration costs. Additionally, net sales rose 8.9% year-on-year basis to USD 2.95 billion (INR 200 billion).

The announcement comes as interest in merging India’s various NOCs was rekindled by government officials.

“We propose to create an integrated public sector oil major, which will be able to match the performance of international and domestic private sector oil and gas companies,” Arun Jaitley, India’s finance minister, said in his budget speech on Wednesday.

The country’s many NOCs include ONGC, Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation.

Along with announcing plans for the merger, Jaitley also cut the import tax for LNG from 5% to 2.5% in order to increase inflow of the much-needed energy source into the country.