Oil India Ltd, the nation’s second-largest state-run oil and gas producer, has logged its second quarterly loss in history in the June quarter of 2020 after crude oil prices slumped to a level lower than the cost of production.
OIL has suffered a net loss of Rs 249 crore in the first quarter of 2020-21 compared with a net profit of Rs 625 crore in the same period of the previous financial year.
“This is the second quarterly loss in OIL history. We had a quarterly loss in 2018-19,” OIL director-finance Harish Madhav said on Saturday.
The price realised for the oil the company has produced dropped to $30.43 per barrel in the June quarter compared with $66.33 a barrel realised a year back, he said.“Our cost of production is around $32-33 per barrel and a drop in price was the primary reason for the loss in the first quarter,” he said.
OIL produced 0.75 million tonnes of crude oil in April-June, down marginally from 0.81 million tonnes a year back. Natural gas output too was marginally lower at 0.68 billion cubic metres (bcm) from 0.71 bcm in the first quarter of 2019-20.
He said natural gas price realisation during the reporting quarter reduced to $2.39 per metric million British thermal unit (mmBtu) from $3.23 in the previous quarter. OIL’s cost of production for natural gas is around $2.3 per mmBtu.
“Gas price realisation was fine but it was the substantial drop in oil prices that resulted in loss in the first quarter,” he said.Turnover in April-June reduced to Rs 1,874.48 crore from Rs 3,496.10 crore in the same period last year.
Additionally, outlook on Oil India’s production growth remains lukewarm. For the June quarter, the company’s oil and gas production had declined 7.5% and 4%, respectively.
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