Oil & Natural Gas Corp. Ltd. · NSE:ONGC
Oil & Natural Gas — FY2008 Earnings Presentation
40 slides from Oil & Natural Gas's earnings presentation, June 2008
Slide 1: Annual Results
sitvorstten fader Ce ONGC VIDESH
Slide 2: Contents
Contents Financial Results 6 ONGC 6 ONGC Videsh Ltd 6 Mangalore Refinery and Petrochemicals Ltd 6 ONGC Group - consolidated
Slide 3: ONGC
ONGC
Slide 4: ONGC: Gross Income
ONGC: Gross Income Rs. in Billion 651.48 611.29 505.56 65.11 Trade Purchases 59.40 50.11 34.34 42.25 Other Income 23.55 129.97 122.64 99.74 Levies Op. Revenue net of 347.93 387.00 406.29 Levies FY'06 FY'07 FY'08 4
Slide 5: ONGC: Cash Profit
ONGC: Cash Profit Rs. in Billion 352.39 335.03 306.28 PAT 167.02 144.31 156.43 Provisions & 2.07 3.34 3.34 Write offs 80.27 85.33 74.06 Provision for Tax 84.57 94.99 97.97 DDA FY'06 FY'07 FY'08 5
Slide 6: ONGC: Production Performance
ONGC: Production Performance Product Unit FY’06 FY’ 07 FY’08 Crude Oil MMT 26.11 27.94 27.93 Gas BCM 25.00 24.91 25.12 LPG ‘000 MT 1,094 1,023 1,034 Naphtha ‘000 MT 1,557 1,450 1,469 C2-C3 ‘000 MT 535 549 520 SKO ‘000 MT 178 155 167 6
Slide 7: ONGC: Production Performance
ONGC: Production Performance Particulars FY’06 FY’07 FY’08 - Crude - MMT - Offshore 16.32 18.03 18.05 - Onshore 8.08 8.02 7.90 - Joint Venture 1.71 1.89 1.98 Total – Crude (MMT) 26.11 27.94 27.93 - Gas – MMTOE - Offshore 16.96 16.59 16.48 - Onshore 5.61 5.85 5.85 - Joint Venture 2.43 2.47 2.79 Total
Slide 8: ONGC: Financial Performance
ONGC: Financial Performance Rs. in Billion FY’06 FY’07 FY’08 Sales Turnover 482.01 569.04 601.37 Less: Trade Purchase 34.34 59.40 65.11 Less: Statutory Levies 99.74 122.64 129.97 Op. Revenue net of Levies 347.93 387.00 406.29 Add: Other Income 23.55 42.25 50.11 Less: Operating Expenses 76.59 101.89
Slide 9: ONGC: Financial Performance
ONGC: Financial Performance Rs. in Billion FY’06 FY’07 FY’08 PBDIT 297.01 327.16 350.91 DD&A 84.57 94.99 97.97 Interest 0.47 0.22 0.59 Add: Excess of Insurance Claim over book value 6.40 4.75 - Profit Before Tax 218.37 236.70 252.35 Provision for Tax 73.52 79.74 84.73 Fringe Benefit Tax 0.54 0.53 0.
Slide 10: ONGC: Sales Revenue
ONGC: Sales Revenue Rs. in Billion Variation – FY’08 over FY’ 06 FY’ 07 FY’ 08 FY’07 Qty. Price Total Crude Oil 328.92 384.59 401.16 (4.96) 21.53 16.57 Natural Gas 68.19 73.04 73.39 1.75 (1.40) 0.35 LPG 16.28 14.87 20.17 0.06 5.24 5.30 Naphtha 35.68 37.91 43.85 (0.01) 5.95 5.94 C2-C3 7.40 9.09 9.29
Slide 11: ONGC: Interest, Dividend and other Income
ONGC: Interest, Dividend and other Income Rs. in Billion Particulars FY'06 FY'07 FY'08 Bank Deposits 4.67 9.76 16.97 Oil Bonds 0.95 1.21 1.21 Site Restoration Fund Deposit 2.35 3.77 4.93 Loans to Subsidiaries 0.90 1.20 8.43 Employee Loans 0.34 0.34 0.31 Dividend Income 3.93 3.26 2.88 Others 10.41 22
Slide 12: ONGC: Statutory Levies
ONGC: Statutory Levies Rs. in Billion Particulars FY’06 FY’07 FY’08 Royalty 46.20 53.35 60.69 Cess 40.79 59.26 58.21 NCC Duty 1.05 1.15 1.13 Excise Duty 2.69 2.77 2.89 Education Cess 0.87 1.30 1.86 Sales Tax 5.74 1.38 0.77 Service Tax -- 0.12 0.20 Octroi & BPT 2.45 3.23 4.20 Prior Period Levies (0.0
Slide 13: ONGC: Statutory Levies (Royalty)
ONGC: Statutory Levies …. Rs. in Billion Particulars FY’06 FY’07 FY’08 Royalty - Crude - Offshore 16.47 20.62 23.26 - Onshore 21.82 23.96 28.61 - Joint Venture 1.30 1.62 1.81 Total – Crude 39.59 46.20 53.68 - Gas - Offshore 3.96 4.13 3.88 - Onshore 1.30 1.49 1.47 - Joint Venture 1.35 1.53 1.66 Total
Slide 14: ONGC: DD&A Cost
ONGC: DD&A Cost Rs. in Billion Particulars FY’06 FY’07 FY’08 Depletion 29.68 33.87 36.78 Depreciation 22.23 16.09 13.98 Dry Wells 15.58 21.93 22.11 Survey 15.86 21.12 25.76 Impairment Loss (0.33) 1.65 (0.44) Prior Period 1.55 0.33 (0.22) Total 84.57 94.99 97.97 14
Slide 15: Subsidy Discount to OMCs and Impact on PAT
ONGC: Subsidy Discount to OMCs Rs. in Billion 220.01 19.42 170.24 14.48 68.18 119.56 Statutory Levies 52.43 10.89 Corp Tax 36.57 Impact on PAT 132.41 103.33 72.10 FY'06 FY'07 FY'08 15
Slide 16: Crude Oil Prices
ONGC: Crude Oil Prices US$ per Barrel (Rs. per Barrel) 85.54 (3,443.84) 66.33 59.66 (3,001.43) (2,641.74) Discount 32.64 (1,314.09) 17.32 22.11 Post Discount Rate (766.92) (1,000.48) 42.34 44.22 52.90 (1,874.82) (2,000.95) (2,129.75) FY'06 FY'07 FY'08 16
Slide 17: FY'08 Change in Accounting Policy: Allocation of Employee Benefits
ONGC: FY’08 - Change in Accounting Policy 1. Allocation of Employee Benefits 6 Till 2006-07, ONGC had been charging certain employee benefits (CPF, Gratuity, Leave Encashment, Annual Incentive, Additional Annual Incentive and Post Retirement Death in Service Benefit Scheme expenses and Post Retireme
Slide 18: FY'08 Change in Accounting Policy: Abandonment Cost Estimates
ONGC: FY’08 - Change in Accounting Policy … 2. Abandonment Cost Estimates 6 Estimated liability towards costs of dismantling, abandoning and restoring Offshore Well Sites/facilities reviewed and revised based on the advice of the outside consultant. 6 Consultant has suggested cost effective rigless
Slide 19: FY'08 Change in Accounting Policy: KG DWN 98/2
ONGC: FY’08 - Change in Accounting Policy … 3. KG DWN 98/2 6 ONGC acquired 90% P.I. in Exploration Block KG DWN 98/2 from Cairn Energy, in 2004-05 for Rs.3.71 Billion. This was capitalized under Exploratory wells in Progress as per ONGC’s Accounting Policy. 6 Subsequently drilling of three wells com
Slide 20: FY'08 Change in Accounting Policy: Pay Revision Provision
ONGC: FY’08 - Change in Accounting Policy … 4. Pay Revision Provision 6 Pay Revision of Employees is due w.e.f. 1.1.2007. 6 Pending finalization, a sum of Rs.10.50 Billion, as estimated by ONGC has been provided in the accounts. 6 This has been allocated to activities as per ONGC’s Accounting Policy
Slide 21: FY'08 Change in Accounting Policy: Employee Benefits as per AS-15
ONGC: FY’08 - Change in Accounting Policy … 5. Employee Benefits as per AS-15 (Rev.) 6 The Actuarial Valuation of Employee Benefits as on 31.03.2008 has been carried out after considering: An increase of 50% in Basic Pay + DA w.e.f 01.01.2007 Gratuity Ceiling of Rs. 1 Million (as per 6th pay commiss
Slide 22: Issue of Oil Bonds for Rs. 1.97 Billion to ONGC
ONGC: FY’08 - Change in Accounting Policy … 6. Issue of Oil Bonds for Rs. 1.97 Billion to ONGC 6 Claim for compensation towards payment by ONGC to Mumbai Port Trust (MPT) for way leave fees and loss of revenue to MPT due to laying of crude pipelines by ONGC during 1978 to 2002 accepted by MoP&NG. 6
Slide 23: ONGC Videsh Limited
ONGC Videsh Limited Consolidated
Slide 24: OVL: Production in MMT – O+OEG
OVL: Production in MMT – O+OEG 8.802 7.952 Gas 1.962 6.339 2.148 0.029 Condensate 0.030 1.755 0.036 6.811 Crude Oil 5.774 4.548 FY'06 FY'07 FY'08 24
Slide 25: OVL: Net Profit
OVL: Net Profit Rs. in Billion 23.97 16.63 9.01 FY'06 FY'07 FY'08 25
Slide 26: OVL: Financial Performance
OVL: Financial Performance Rs. in Billion FY’06 FY’07 FY’08 Sales Turnover 77.92 115.54 167.41 Add: Other Income 3.77 3.07 2.13 Gross Revenue 81.69 118.61 169.54 Less: Operating Expenses 50.04 66.45 80.43 (Incl provisions & Write off) Variation in Stock 0.01 0.40 (0.20) Less: Financing Costs (0.97)
Slide 27: OVL: Revenue – Sales
OVL: Revenue – Sales Rs. in Billion FY’06 FY’07 FY’08 Crude Oil 64.42 102.43 155.43 Natural Gas 6.67 8.00 6.78 Condensate 1.46 1.84 2.08 Others 5.37 3.27 3.12 (Processing/Transportation/Drilling) TOTAL 77.92 115.54 167.41 27
Slide 28: OVL: Expenditure
OVL: Expenditure Rs. in Billion FY’06 FY’07 FY’08 A. Operating Expenses Operating Costs 9.66 12.53 13.77 Statutory Levies 39.99 52.51 61.06 Provisions & Write Offs 0.39 1.41 5.60 TOTAL – (A) 50.04 66.45 80.43 B. DD & A Depreciation 1.17 2.68 9.89 Depletion 4.62 12.59 11.78 Survey 1.01 2.62 5.29 Dry
Slide 29: OVL: FY'08 Extra-ordinary Items
OVL: FY’08 Extra-ordinary Items 1. Impact of Change in Depreciation rate for Pipelines and onshore Flowlines from 27.82% to 100% Rs. 5.36 Billion 2. Increase in rate of Interest from 0.10% to 6% p.a. on Loan from ONGC wef 1st April 2007 Rs. 7.26 Billion 29 29
Slide 30: Mangalore Refinery and Petrochemicals Ltd.
Mangalore Refinery and Petrochemicals Ltd.
Slide 31: MRPL: Thruput & Capacity Utilisation
MRPL: Thruput & Capacity Utilisation MMT 125 % 129 % 130 % 12.12 12.55 12.54 FY'06 FY'07 FY'08 31
Slide 32: MRPL: Turnover
MRPL: Turnover Rs. in Billion 373.39 322.08 282.43 FY'06 FY'07 FY'08 32
Slide 33: MRPL: Financial Performance
MRPL: Financial Performance Rs. in Billion FY’06 FY’07 FY’08 Sales Turnover 249.68 286.33 325.75 Add: Other Income 0.77 0.74 2.12 Gross Revenue 250.45 287.07 327.87 Variation in Stock (2.93) 7.98 0.96 Raw Materials consumed 228.31 271.07 300.80 Operating & Other expenses 7.60 7.40 5.44 Interest & Fi
Slide 34: MRPL: Financial Performance
MRPL: Financial Performance Rs. in Billion FY’06 FY’07 FY’08 Sales Turnover 282.43 323.77 373.39 Less: Excise Duty 32.75 37.44 47.64 Gross Revenue 249.68 286.33 325.75 Interest Income 0.17 0.21 0.51 Miscellaneous Income 0.15 0.18 0.22 Provision Write Back 0.45 0.02 0.01 Exchange difference -- 0.33 1
Slide 35: MRPL: Margin & Expenses – $/bbl
MRPL: Margin & Expenses – $/bbl FY’06 FY’07 FY’08 Gross Margin 3.66 4.79 6.93 Other Income 0.08 0.10 0.20 Exchange Difference 0.01 0.02 0.03 Other Expenditure - Operating Expenses 0.47 0.44 0.75 - Irrecoverable Tax 0.23 0.25 0.22 - Exports & Coastal Marketing 0.08 0.11 0.07 - Marketing Expenses 0.08
Slide 36: MRPL: FY'08 Change in Accounting Policy
MRPL: FY’08 - Change in Accounting Policy … • Investments: Amended to include current investments are valued lower of cost or Fair value. •Inventories: Amended to include other trading goods on – weighted average cost basis. •Leases: Amended to include operating leases – Assets acquired on lease whe
Slide 37: MRPL: FY'08 Change in Accounting Policy
MRPL: FY’08 - Change in Accounting Policy … •Sales: To fall in line with the Guidance note on accounting of State-level VAT issued by the Institute of Chartered Accountants of India, the policy is amended – Sale of Products in inclusive of all statutory levies except Value Added Tax (VAT) and is net
Slide 38: ONGC Group
ONGC Group
Slide 39: ONGC Group: Financial Highlights
ONGC Group: Financial Highlights Rs. in Billion FY’06 FY’07 FY’08 A. Sales Turnover as per Audited Accounts a) ONGC 494.90 568.05 601.37 b) OVL (including its 74.72 112.27 163.61 subsidiaries) c) MRPL 282.43 323.77 373.39 d) PLL 4.79 6.81 8.19 e) PMHBL - - 0.16 Less Inter-Company (101.12) (148.23) (
Slide 40: ONGC Group: Financial Highlights
ONGC Group: Financial Highlights Rs. in Billion FY’06 FY’07 FY’08 B. Net Profit as per Audited Accounts a) ONGC 144.31 156.43 167.02 b) OVL (including its subsidiaries) 8.70 16.63 23.97 c) MRPL 3.72 5.26 12.72 d) PLL 0.24 0.39 0.59 e) PMHBL - - - Total 156.97 178.71 204.30 C. Add: Share of Profit/ (