ONGC eyes $2.9B net in FY-07

By agencies   |   Tuesday, 11 April 2006, 07:00 Hrs
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NEW DELHI: Oil and Natural Gas Corp. Ltd. forecast a net profit of $2.9 billion for the financial year March 2007.

ONGC expects gross revenue in 2006/07 to rise to $10.45 billion, 26 percent more than the target for the last fiscal year, according to an annual document, which lists performance targets agreed between the firm and the government.

The company expects crude output to rise to 27.35 million tones, or about 547,000 barrels per day (bpd), about 9 percent more than the output in 2005/06. Last year's production was hit by a fire in an offshore platform in Mumbai High, India's largest oilfield.

ONGC, India's oil major reported a net profit of $881 million in October-December, up 11 percent over the same period a year ago. Talking to media person the ONGC Chairman Subir Raha told reporters he was "satisfied" with the targets set for the company.

Last year, the oil ministry and the company could not agree on performance targets for months. Raha said he sought the oil ministry's support in changing the system of subsidising refining firms, which are making losses because of state controls on fuel price.

Every quarter, the government directs ONGC to offer discounts to refiners to help them sell oil products at state-administered prices, which are below international crude oil rates.

He said, “He wanted the government to levy a tax on crude oil and use it to directly subsidize the loss-making refiners. The current system hurts our topline.”

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