Indian explorer’s profit slumps on oil price crash

Bloomberg

Oil & Natural Gas Corp (ONGC) posted a 92% plunge in profit after crude prices crashed, production declined and demand for natural gas took a hit from a nationwide lockdown.
Net income was 4.96 billion rupees ($68 million) in the three months ended in June, compared with 59.8 billion rupees a year ago, according to a company filing. Revenue contracted 51% to 130.1 billion rupees.
India’s biggest explorer benchmarks its oil to Brent crude, which plunged more than 51% year-on-year during the quarter.
Prices for its natural gas, decided by the Indian government, dropped 35%.
A lockdown to combat the spread of the coronavirus, imposed at the end of March, pushed gas production down by 13% from a year earlier during the quarter, while demand slumped as consumers stayed home.
Shrinking profits reduce the company’s investment capability in new projects as it
struggles to maintain production from older fields and widen its energy portfolio beyond hydrocarbons.
The company, which used to be India’s most profitable enterprise until a few years ago, plans to invest more than 860 billion rupees in 27 projects.
In June, it said it would review its expenditure plans in view of the coronavirus outbreak.