India’s ONGC, the biggest oil and gas company in the country, reported a 35% drop in profits for the fourth-quarter of its financial year, citing higher exploration costs. Profits for the full year to March 2025 also fell but more modestly, by 15%.
The company attributed the lower results to exploratory oil well drilling cost writeoffs. The average realized price for the oil it sold during the fourth quarter was $73.72 per barrel, which was down by 9% from a year earlier, the Economic Times reported.
ONGC accounts for as much as 70% of India’s oil and gas production. However, in a recent acknowledgment of the volatile nature of oil prices, the company announced plans to diversify in refining, petrochemicals, LNG trading, and renewable energy as it expects lower oil prices amid a looming crude supply glut.
“Globally, we are heading to a glut in oil supplies which means prices will reduce,” Arunangshu Sarkar, director for strategy at ONGC, told Bloomberg in March. “It will be difficult for a company like ONGC to survive in a low oil-price regime and the new businesses provide a hedge for such a scenario,” Sarkar added.
Also earlier this year, as part of these diversification efforts, ONGC said it would invest a generous $11.5 billion in wind and solar, aiming for a portfolio of 10 GW by 2030. Investments in green energy for the current fiscal year are planned at $115 million. So the 2030 target would mean scaling up these investments 100 times over. In addition to wind and solar, ONGC will seek expansion in hydropower, biogas, and green hydrogen.
Meanwhile, it is not neglecting its core business, either. The company recently held talks with Exxon, Shell, and BP for a potential partnership in the development of a deepwater block off India’s eastern cost. The cost for developing the project has been estimated at $5 billion. Current production in the block stands at 33,000 barrels of oil and 2.5 million cu m of natural gas daily.
By Irina Slav for Oilprice.com
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