Metrics raised 1
- Long-run crude oil price assumption raised to $75+ per barrel (from ~$65 pre-Hormuz)
Metrics cut 1
- KG 98/2 gas peak production timeline delayed (now expected 6-7 MMSCMD by Q4 FY28, vs original schedule earlier)
Wednesday, August 5, 2026 3:30 PM IST
Event Participants
Executives
5 Anupam Agarwal, Ajay Kumar Singh, Dr. Ravindra Singh Negi, Satish Kumar Dwivedi, Yogesh Nayak
Analysts
5 Amit Murarka, Bharath Rajan, Hardik Solanki, Mayank Maheshwari, Nitin Tiwari, Sabri Hazarika, Vikas Jain, Vivek Subbaraman, Yogesh Patil
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Standalone Gross Revenue | ₹56,450 crores | +45% YoY, driven by higher crude realizations ($99.45/bbl avg) |
| Standalone PAT | ₹17,034 crores | +112% YoY, robust growth from strong crude prices |
| Standalone PBT | ₹22,848 crores | Highest ever quarterly standalone PBT |
| Consolidated Group PAT | ₹6,554 crores | Impacted by HPCL net loss of ₹12,265 crores due to under-recoveries; cushioned by OVL and MRPL performance |
| Crude Price Realization | $99.45/bbl | Slightly above Brent avg ($97-98/bbl) due to Q1 volatility |
| Oil Production (98/2) | ~21,000 bbl/day | Reservoir complexity challenges; 13 of 13 wells open |
| Gas Production (98/2) | ~1.5-1.7 MMSCMD | Expected to reach 3+ MMSCMD post-CPP commissioning (Oct-Nov) |
| New Well Gas Revenue Share | 38% of nomination gas revenue | Incremental realization of ~₹1,900 crores over APM pricing |
| New Well Gas Volume Share | ~19-24% of gas sales | Up from 17% last year; volume growth continues with new developments |
| Gas Revenue Contribution | 28% of standalone revenue | Up from 25% in FY25; secular shift toward gas |
| Total Standalone Production | 38.87 MMTOE (FY26) | FY27 target: 39 MMTOE; FY28 target: 40 MMTOE |
Geographic & Segment Commentary
Western Offshore / Mumbai High: Mumbai High TSF (Phase 1 with BP) producing ~107% of contractual baseline oil and ~113% of gas. TSP model expanded across entire Western Offshore portfolio. INR 40,000+ crores capex underway covering pipeline replacement, water injection, production system upgrades, and field developments. Pre-monsoon swell temporarily impacted installations; management expects oil production to recover to last year levels by year-end with gas +1 BCM.
KG Basin 98/2: Oil production ~21,000 bbl/day from all 13 wells; gas ~1.5-1.7 MMSCMD from 2 of 7 wells. Reservoir interconnection complexities identified; study underway with world-renowned geological center. Gas production expected to reach 3+ MMSCMD after CPP commissioning (Oct-Nov 2026) and 6-7 MMSCMD by Q4 FY28.
New Well Gas Portfolio: Revenue reached nearly ₹4,000 crores in Q1, with incremental realization of ~₹1,900 crores over APM pricing. Steady migration toward more remunerative gas basket; new well gas now ~38% of nomination gas revenue (19-24% of volume).
OVL International Assets: Sakhalin restored to portfolio (December 2025), now contributing ₹1,000+ crores per quarter (vs ₹500-600 crores annually previously). Mozambique force majeure lifted; production expected late 2028/early 2029 (~3 MMT share). Brazil BM-C-30 first oil targeted 2030. Venezuela: OFAC license obtained, full operational freedom restored; pursuing new agreements with PDVSA.
OPaL: Q1 FY27 EBITDA negative ₹57 crores vs positive ₹1,207 crore FY26 due to Hormuz-related feedstock cost surge (naphtha from $600 to $1,000/ton, gaseous feed stopped). SEZ exit expected to add ~₹1,000 crores EBITDA; ethane import via Mitsui O.S.K. Lines MOU to reduce feedstock costs.
Green Energy (OGL): Renewable portfolio reached 2.853 GW. Awarded 300 MW ISTS-connected solar (last year) and 250 MW wind project (June 2026) for captive consumption.
Company-Specific & Strategic Commentary
Samudra Manthan Deepwater Mission: Government-approved national offshore exploration scheme with ₹84,084 crores outlay (first phase to 2031). ONGC playing central role; first Mahanadi deepwater exploratory well spudded July 25, 2026 (results expected end-September). Each deepwater well costs ₹800-1,000 crores; funding details still being worked out but government reimbursement expected to reduce exploration cost burden. ONGC also targeting OALP 10 blocks and evaluating partnerships with global majors (BP, Reliance JV experience cited).
Western Offshore Transformation via TSP Partnership: BP technical services partnership expanded from Mumbai High (TSP-1) to entire Western Offshore portfolio. The 7% oil/13% gas gains are over and above natural decline rate (~6-7%); absolute gain ~1-2% for oil, 5-6% for gas. New INR 40,000+ crore project pipeline under execution.
Production Growth Projects: DUDP (Daman) reaching 2 MMSCMD by December, +1.3 MMSCMD from East Coast CPP, +0.5 MMSCMD from Tapti/Daman wells. Expected ~1 BCM incremental gas this fiscal and ~1 MMTOE additional oil+gas next year.
OPaL Restructuring: SEZ exit completed; ONGC corporate guarantee and equity infusion reducing financial burden; ethane carrier program with Mitsui O.S.K. Lines to secure cheaper feedstock.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Standalone Production | 39 MMTOE FY27; 40 MMTOE FY28 | Upside from gas projects (DUDP, CPP, TSP); oil production to remain at FY26 levels |
| Oil/Gas Split | ~50/50 by FY28 | Gas share rising due to new developments |
| KG 98/2 Gas Peak | 3+ MMSCMD by Q4 FY27; 6-7 MMSCMD by Q4 FY28 | Post-CPP commissioning and re-entry into E-field gas |
| DUDP Gas | +2 MMSCMD by December 2026 (3 MMSCMD total) | Incremental to current production |
| Capex | $3.5-4.0 billion FY27 | Project-dependent, maintained to current range |
| Crude Oil Production (FY27) | Flat YoY | Recovering from pre-monsoon challenges; post-monsoon catch-up expected |
| Gas Production (FY27) | +1 BCM vs FY26 | New field monetization (DUDP, CPP, Tapti/Daman) |
| OPaL | Recovery expected | Normalization once gaseous feedstock resumes and ethane imports begin |
| Brazil BM-C-30 | First oil 2030 | FPSO work awarded; project on track |
| Mozambique | Production late 2028/early 2029 | Force majeure lifted; activities in full swing |
Risks & Constraints
| Risk | Context |
|---|---|
| KG 98/2 Reservoir Complexity | Interconnection between reservoirs requires possible well re-entry costing ₹500+ crores per well; study ongoing. Management framing as addressable but timelines uncertain; peak production delayed from original schedule |
| West Asia/Hormuz Geopolitical Crisis | Caused crude price spike ($99+), but severely impacted HPCL (₹12,265 cr loss) and OPaL (feedstock cost surge); Group earnings volatility heightened; OVL Russian asset realizations constrained by price cap |
| Panna Mukta Tapti (PMT) Arbitration | Contingent liability ₹15,000-16,000 crores; ONGC not participating as claimant per government understanding; outcome of JV arbitration will be binding |
| Gas Off-take / Customer Disruptions | Lower sales-to-production ratio (79% to 75-76%) due to customer-side issues in isolated fields; impacts revenue realization |
| OPaL Financial Distress | EBITDA swung from +₹1,207 cr (FY26) to -₹57 cr (Q1 FY27); feedstock economics remain volatile; restructuring measures (SEZ exit, ethane carriers) expected to provide ₹1,000+ cr EBITDA improvement |
| Exploration Risk | Deepwater drilling costs ₹800-1,000 crores per well; Samudra Manthan reimbursement details not yet finalized; high-risk/high-reward nature of deepwater plays |
| Crude Realization Volatility | Q1 premium over Brent (~$2-3) was volatility-driven per management; formula-based realization is Brent + 1% (net ~Brent minus spread); over-forex impact noted |
Q&A Highlights
Production Guidance & KG 98/2 Status
- Question: Sequential oil production in nominated fields +1% but NELP block -8%; KG status and FY27-28 production guidance? (Yogesh Patil)
- Answer: TSP in Mumbai High is supporting nominated field production (107% of baseline). KG 98/2 oil at ~21,000 bbl/day; gas ~1.5 MMSCMD. FY27 standalone production guidance: ~39 MMTOE; FY28: ~40 MMTOE with ~50/50 oil/gas split. Upside primarily from gas (DUDP +2 MMSCMD by December, CPP +1.3 MMSCMD, Tapti/Daman +0.5 MMSCMD). (Anupam Agarwal, Ajay Kumar Singh)
PMT Arbitration Contingency
- Question: Given ₹15-16K crore contingent liability, has non-participation in arbitration tacitly accepted government's demand? (Nitin Tiwari)
- Answer: No formal directive—mutual understanding with government to avoid two state arms fighting in court. The case is JV vs government (not ONGC vs government); outcome will be applicable to all JV partners. ONGC's interests and minority shareholder interests are protected as normal JV principle. (Anupam Agarwal)
Samudra Manthan Details and Strategy
- Question: What role will ONGC play in Samudra Manthan? How does government funding help economics? Which basins are most prospective? Will global majors partner? (Mayank Maheshwari)
- Answer: ONGC to play major role as national champion; government funding primarily first phase exploration until 2031; each deepwater well ₹1,000 crore (government will reimburse partially—details being finalized). Mahanadi (well spudded July 25), Kaveri, and OALP 10 blocks targeted. Break-even economics improve with lower exploration costs; long-run oil price expectation now $75+ (vs $65 pre-Hormuz) making more fields viable. ONGC open to global partner participation (BP-Reliance JV precedent) and actively inviting international majors. (Anupam Agarwal)
TSP Performance and Operational Challenges
- Question: Can you quantify TSP results and outline milestones to resolve operational issues? (Vivek Subbaraman)
- Answer: Mumbai High TSP: 107% oil and 113% gas vs baseline—this is over natural decline rate of 6-7%, so absolute gain ~1-2% oil and 5-6% gas. Operational issues are execution-related (pre-monsoon swell, well closure during platform installation on brownfield projects) and will clear post-monsoon. KG 98/2 is reservoir-related (interconnection complexity) — study with international experts ongoing; well re-entry decisions pending given ₹500+ crore cost per well. (Anupam Agarwal, Ajay Kumar Singh)
OVL Asset Portfolio Status
- Question: Update on Mozambique, Sakhalin, Venezuela, Brazil assets; why did OVL PAT drop from ₹2,260 cr (Q4) to ₹1,140 cr despite higher oil prices? (Sabri Hazarika)
- Answer: Sakhalin restored November-December 2025, contributing ~₹1,000+ crore per quarter; Mozambique force majeure lifted, production expected end-2028/early-2029 with ~3 MMT share; Brazil BM-C-30 first oil 2030; Venezuela—OFAC license obtained, new petroleum law offers fiscal incentives, ONGC targeting operatorship. Q4 vs Q1 drop due to Russian price-cap related realizations (geopolitical discount) not being at full international price parity. (Anupam Agarwal)
KG 98/2 Gas Peak Production
- Question: What is peak gas production for KG asset and timeline? (Vikas Jain)
- Answer: Current ~1.5 MMSCMD. Post-CPP commissioning (October-November 2026), additional ~1.5 MMSCMD from opening remaining 5 gas wells (reaching ~3 MMSCMD). Further expansion to 6-7 MMSCMD after E-field re-entry—expected by Q4 FY28. Reservoir complexity study will inform strategy for both oil re-entry and gas development. (Ajay Kumar Singh, Anupam Agarwal)
OPaL EBITDA and Feedstock Issues
- Question: What's driving OPaL's EBITDA swing and operating rate? (Bharath Rajan)
- Answer: OPaL Q1 FY27 EBITDA: -₹57 crores vs +₹1,207 crores FY26. Hormuz crisis caused naphtha prices to surge from $600 to $1,000/ton while gaseous feedstock stopped. Transformative steps (SEZ exit worth ~₹1,000 crores EBITDA, ONGC guarantee, ethane carriers with Mitsui O.S.K.) to structurally improve feedstock economics. Normalization expected once gaseous feed resumes and ethane imports begin. (Anupam Agarwal, Divvedi)
Survey Expenses & Q1 Exploration Lag
- Question: Why are survey expenses lower in pre-monsoon quarter than usual? (Amit Murarka)
- Answer: Contract finalization delays—tender rates from bids were not workable, so re-tendering required. Major survey contracts now awarded; October onward will see significant catch-up activity supporting both Samudra Manthan and regular exploration programs. Exploration spend will exceed normal Q1 levels in H2. (Anupam Agarwal)
Crude Realization Premium to Brent
- Question: Why is realization $2.5-3 above Brent when historical is 0 to -$1? (Amit Murarka)
- Answer: Purely Q1 volatility due to Hormuz crisis market dislocation—no formula change. ONGC's arrangement: Brent + 1% with ~5% being marketing companies' share, netting roughly Brent parity for ONGC. Expect normalization in coming quarters. (Anupam Agarwal)
LPG Realization Above Saudi CP
- Question: Why is LPG realization ($896/ton) $120-130 higher than Saudi benchmark? (Yogesh Patil)
- Answer: Market volatility post-Hormuz; abnormal market conditions drove higher realizations. IR team would provide detailed clarification if needed. (Anupam Agarwal)
Key Takeaway
ONGC delivered a record standalone quarter—gross revenue of ₹56,450 crores (+45% YoY) and PAT of ₹17,034 crores (+112% YoY)—driven by strong crude realizations of $99.45/bbl amid the Hormuz crisis, though consolidated PAT of ₹6,554 crores was heavily impacted by HPCL's ₹12,265 crore loss. The company's strategic focus centers on three transformations: migration to a remunerative gas portfolio (new well gas now 38% of nomination gas revenue), Western Offshore revitalization via BP partnership (Mumbai High at 107% oil/113% gas of baseline), and deepwater exploration under the government's ₹84,084 crore Samudra Manthan mission—with the first Mahanadi well spudded in July. Production guidance of 39 MMTOE (FY27) and 40 MMTOE (FY28) rests on gas-led growth from DUDP, CPP, and TSP projects, though KG 98/2 reservoir complexity and OPaL feedstock challenges remain key execution risks. With crude prices expected to sustain $75+ long-term and government-funded exploration reducing cost burden, management remains confident in the production recovery trajectory through FY28.