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Oil India Ltd
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Good morning, ladies and gentlemen. I am Momita, moderator for the conference call. Welcome to Q1 FY '22 Results Conference Call of Oil India Limited, hosted by Antique Stock Broking.[Operator Instructions] Please note that this conference is being recorded.I would now like to hand over the floor to [ Mr. Varatharajan Sivasankaran ]. Thank you.And over to you, sir.
Thank you, Momita. Good morning, everyone. I would like to extend a very warm welcome to the senior management of Oil India, represented by Mr. Harish Madhav, Director, Finance; Mr. P.K. Goswami, Director, Operations; and all the participants listening in the current quarter call.I'll request Mr. Harish Madhav to give a brief, and then we can move on to Q&A.Mr. Harish Madhav?
Yes. Good morning, ladies and gentlemen. I will request -- I think the results of -- we have already circulated to all the analysts yesterday. And they were posted on the stock exchanges also. I will request my Executive Director, Finance, Mr. Sanjay Choudhuri, to give a brief. And then we can open up for the question [indiscernible]. [ Sanjay, please ].
[indiscernible]. Good morning, dear friends.At the outset, I would like to thank Antique broking limited for [ running ] this call. We appreciate the interest shown by the analysts in the company. The financial results of Q1 '21 and '22 have been shared with all the analysts and posted on the website as well. I hope all of you have received the same. I'll briefly give some indications about the performance of the company in both physical and financial terms.To start with, at the group level, income of Oil for Q1 '21/'22 is INR 6,276 crores vis-a-vis INR 4,334 crores in Q1 '20/'21. The PBT in Q1 '21/'22 is INR 1,678 crores, against INR 526 crores in Q1 '20/'21. The profit after tax at the group level of the company for Q1 '20/'21 (sic) [ Q1 '21/'22 ] is INR 1,215 crores vis-a-vis INR 378 crores in Q1 '20/'21.Now coming to the stand-alone results, and we'll begin on the production front. The crude oil production for Q1 '20/'21 (sic) [ Q1 '21/'22 ] has marginally reduced [ to 0.748 MMT ], as compared to 0.752 MMT during the corresponding quarter last year. However, looking at it sequentially, from Q4 of '20/'21, there has been an increase of 4.32%. In case of natural gas, also the production in Q1 '21/'22 has increased to 711 MMSCM, as compared to 682 MMSCM. However, significantly, it has increased by 9.52% from Q4 of '20/'21.On the financials side, the company's profit after tax in Q1 '20/'21 -- has increased by INR 756 crores from loss of INR 248 crores in Q1 '20/'21 to profit of INR 507.94 crores in Q1 '21/'22. EBITDA during the similar period has increased by 295% to INR 1,296.92 crores due to better price realization.EPS has increased to INR 4.68 per share in Q1 '20/'21 (sic) [ Q1 '21/'22 ], as compared to negative INR 2.29 Q1 '20/'21.The crude oil price realization has increased to USD 67.15 barrels -- USD 67.15 per barrel from USD 30.42 per barrel in the corresponding quarter last year. The increase in price has led to an increase in turnover by INR 1,350 crores, and PAT by 675 crores during first quarter of '21/'22. The average natural gas price realization in the first quarter was USD 1.79 MMBtu, as compared to USD 2.39 MMBtu in the corresponding quarter last year. The decrease in price has led to decrease in turnover by 111 crores; and profitability, that is profit after tax, by [ 75 crores ] during the first quarter.The lower realization of natural gas has been a matter of concern since last year. In the current quarter, Oil has taken provision well -- write-off against wells to the tune of INR 6.22 crores, which is against 268 crores which was in the first quarter of last year.We -- Numaligarh being our [ material ] subsidiary, we would like to share some of the financial information relating to Numaligarh.The performance after tax of NRL in Q1 '21/'22 is 678 crores, against 423 crores in the corresponding quarter last year. NRL GRM has improved to $5.21 per barrel in Q1 '21/'22 from negative $3.15 per barrel in Q1 of last year. And EPS stood INR 9.22 per share from INR 5.75 per share in Q1 of the previous year.We're also happy to inform that, in the country's fight against COVID, the company is supporting the cause by providing PSA oxygen plants, oxygen concentrators and cylinders to various states. Additionally, the company has created a 100-bed COVID case center; and is undertaking widespread vaccination program in its operational areas, covering all stakeholders.In order to encourage excellence in sports, the company has decided to honor Ms. Lovlina Borgohain and Ms. Saikhom Mirabai Chanu with a cash reward of INR 25 lakhs each for their outstanding performance in individual events in the Tokyo Olympics.With this opening remarks on the performance of the company, it's over to you, and we open to the Q&A session.
[Operator Instructions] So our first question comes from Mr. Somaiah V. from Spark Capital.
Sir, my first questions. Can you please share the NRL numbers, what you gave for this quarter vis-a-vis the last year quarter? Can you please provide the numbers for the last quarter, as in 4Q '21, the GRM and PAT numbers, [ if possible ]?
[indiscernible]...
Somaiah V., last quarter GRM, readily -- I think it's not available. We can send you an e-mail. Or maybe [ we can later communicate that ]. Do you want Q4 GRM?
Yes, yes.
Okay, we'll communicate. Maybe during the call itself, we can communicate. Just give us some time.
Sure, sir. And also, this quarter, including excise duty benefit, what will be the numbers?
[indiscernible].
Can you speak, please, louder?
Yes...
This quarter, including excise duty benefit, what will be the GRM number?
Excise duty benefit. I think that is something very, very specific to the Northeast refineries. So we feel that it will not be a comparable number if we are comparing GRM or the performance of the refineries, which is reflected in the [indiscernible] of the refineries. And moreover, we do not have that number readily because NRL also doesn't [indiscernible] that number anywhere. So maybe we can -- if it is a specific request, we'll have to collect it from NRL and then come back to you.
Okay, sir. And can you just provide an update on the CapEx program both from stand-alone operations perspective as well as NRL perspective?
From a stand-alone perspective, this year, our program CapEx plan is around 4,100 crores. Last year, we had done about 4,600 crore total investment, plus 8,600 crores plus the NRL investment. This year, CapEx plan for Oil is 4,100. NRL, since it is just commencing on the refinery expansion plan this year plus the biorefinery projects, I think it is in the range of about 1,000 crores for '21/'22.
Okay, sir. And for FY '23 NRL because of this expansion program. I just wanted to get a number [indiscernible]...
[indiscernible] NRL CapEx will be certainly much, much higher because the refinery expansion will be going ahead. Only thing is that this is -- the CapEx for the new refinery or expanded capacity was initially 22,000 crores. It is now under approval for 28,000 crores, so the specific numbers may be available after some times when the revised numbers are approved by the government. So maybe, in the next call or 1 or 2 months later, we will be able to share those numbers, the exact [ spread ] of that capital allocation.
Got it, sir. And just on your volume outlook, production outlook both in terms of oil and gas. You've been giving this. So both for this year as well in the next 2, 3 years, your medium-term outlook, keeping in context of your new projects that's coming in.
In fact, we have a growth plan of production for the next few years up till '23/'24, '24/'25. And up till '25/'26, also we have a growth plan. And we are targeting a very aspirational target, but the -- inside, we are working on that. Once everything is finalized, then probably we'll be able to give the exact numbers.
Sir, your debt and cash numbers at end of this quarter, sir...
Cash is very minimal. It is maybe a few hundred, INR 300 crores, INR 400 crores only, not much, but we have the tax-free bonds of about [ 1,500 crores ] and the cash and mutual fund investments of about 400-odd crores.
Yes.
And debt is close to 9,000 crores in standalone -- one second. I'll just confirm the debt number.
On the debt too, debt, debt, debt; and borrowings.
[indiscernible] 100.
[indiscernible].
About 11,000.
[Operator Instructions] The next question comes from Mr. Probal Sen from Centrum Broking.
Sir, with respect to the production outlook, I got the point that you're working on a longer-term range. I had a specific question on the Baghjan field. You had mentioned last quarter, after all the, I think -- fire-related activities have now been completed. And prior to the incident, I believe this was one of the more promising regions in terms of exploration outlook and production growth that we have. I just wanted to understand. Now where do we stand in terms of the [ petroleum ] exploration activity on this asset? And do we still believe that this can add -- if I believe that number shared a couple of years ago was that this field and this asset alone can add 3 to 4 MMSCMD of gas production. Is that accurate? Or I just wanted to get your sense.
Yes. Thank you for the question. You are right there. Basically in Baghjan everything related to fire is now closed. And we have been working on the field right now. And the production from the field is, to the extent possible, now the [ maximum ] production we are getting from the field only. And most of the -- we have already started working on 2 -- or 3 rigs. That means we are working on 3 drilling operations in the site. And [ 4 ] [indiscernible] units are also placed in that area. So the exploration and production activity is going on at full steam in that place. And as you have rightly said, we have -- we earlier declared that this is one of the most promising fields. And the -- with the support from the present ministry also from -- in the state of Assam, we have been working in this field very, yes, nicely. There is no disturbance as of now and the production's figure from this field is going up from day to day. So we are very hopeful that this field will be giving [ outstanding ] results in the days to come.
Is it possible to share, what is the production level now, sir? And what do you expect it to be maybe by the end of the year or next year?
For the entire field. Or you are asking about the Baghjan field particularly.
No, the Baghjan area basically. I believe there are a number of smaller fields as well. I mean that asset in that block.
Exactly giving the figure for Baghjan, that is not readily available with me right now, so I'll have to find it out. And maybe during the course of this discussion, we can find it out for the Baghjan field separately.
Probal, you want the production of gas from Baghjan field separately.
Yes. I -- no. I just wanted to sort of get a sense that what is the recovery looking like. Because we had mentioned that this will be a primary driver for gas production growth for us before the incident happened. So that's the sense that I just wanted to get, sir. That's all.
The field is continuing. [ Look ], it is a most promising field and we have been working on that. In fact, we are working for infrastructure facility development in that area, which will be capable of handling 5 million gas. So we are targeting 1 million -- or 5 million [indiscernible]. So that is on the hand. The infrastructure development project is also going on, but if you ask me the -- exactly what is the total production, that I cannot be -- I will not be able to give you right now, but our target is 5 million from that area.
Probal, one more thing is there. Baghjan, [ we can see that ] one particular well which was producing around [ 18,000 ] MMSCMD per day. [ That well which -- is basically deployed ] where it happens. So that well [indiscernible]. I will say that, presently, the production [indiscernible] maybe from the other wells, we would have increased a little bit. That is, unless a new well or something is built there will start to augment [ further ] production, the production from that particular field will be more or less static as of now [indiscernible] have that augmented development plan for the Baghjan field. And with that and very soon, we will be starting production and all those things, if there are certain issues. So things are getting resolved...
The one thing I would just like to add. One rig -- one well was complete yesterday, so we have started producing from that well yesterday. So [indiscernible] from yesterday. So we have been getting gas from that [ field ].
So one, production is -- at that operation is still -- one well has come up -- new well has come up in production effectively yesterday only.
Got it. So basically, sir, about -- over the next few years, we would expect to see a gradual production uptick from this area, right?
Yes, yes, right. Yes, exactly.
Yes.
Yes. Great, sir. Sir, just a second question, if I may, on the [ 280 million ] of revised CapEx on NRL. You said it is still in the process of finalization, but roughly the funding of this will be in the 30-70 ratio. So 30% will be an additional equity contribution from Oil India.
No. That increase [ is in the ] capital costs from 22,000 crores to 28,000 crores. And now it is supposed to be funded 70% through debt and 30% through equity, but the equity, there -- probably there will not be any additional contribution, as per the anticipation. And others, internal resources will be sufficient to fund that additional 30% equity of [ 6,000 crore ] investment. So from the partners, shareholders, the equity contribution which was there at 22,000 crore investment level, the same level is anticipated as of now.
And the time line will be basically about 3 to 4 years, sir, for completion of this project from the time of final approval.
[ Yes. It is still ] -- yes, yes. Project is already -- [indiscernible] has already started on the project. So by '24 and -- '24/'25, the refinery expanded capacity should get commissioned.
The next question comes from Mr. Avishek Datta from Prabhudas Lilladher.
Sir, just carrying on from the previous question. Sir, like if you plan to ramp it up, gas volumes, to -- by 5 MMSCMD, does the region have the demand potential of that amount currently? Or how do we plan to do it? Can they export the same, or what?
Gas exports from India is not at all [indiscernible]. Oil -- crude oil and natural gas exports in any case is not [indiscernible]. The demand is also coming up. And our production ramp-up also will keep in line with the demand ramp-up which is coming up. BVFCL, they are coming up [ in Namrup 4 fertilizing ] plants. There is some more -- power plant also, capacity, [ is getting increased ]. Assam Petro-Chemicals Limited also is going to increase its [ base ] capacity. So apparently the demand will also increase over this next 2 to 3 years period, and our production growth also will be in line with that demand projection.
Sir, in your presentation you have mentioned that this expected production of 5 MMSCMD can happen by FY '24. Is it a realistic target? Or it can be delayed also, sir.
It should not get delayed. All efforts are being made to stick to that -- production targets. We have made commitments and agreements [indiscernible].
And sir -- and when you say another expansion will complete by '24, '25, you mean FY '24/'25. Or...
Yes, FY '24/'25.
Okay, sir. And sir [indiscernible] you said that like, last year, FY '21 -- what was the dividend which you received from Russia?
Russia...
[indiscernible] Russia dividend [ distribution ] is of calendar year basis. In fact, the first dividend we received from over the subsidiary in Russia, [ about ] 230 crores dividend, that is [indiscernible] limited, which is our wholly owned subsidiary. But they declared a dividend of about 230 crores, which Oil India received from Singapore. But total dividend received from Russia last year, we'll just give you the number.
So we have the next question from Sabri Hazarika from Emkay Global.
Congratulations on good numbers. So I have 2 questions, followed by a bookkeeping question. So the first question is how much crude Oil India is selling to NRL currently.
About 60% of our crude oil goes -- production goes to NRL. So say, out of 3 -- total approximate 3 million, 1.6 million, 1.7 million, 1.5 million tonnes goes to NRL.
Okay. And it is like a totally arm's length transaction, right? There is no synergies as such...
No. It's that's going to be on arm's length basis, on the same pricing structure on which we sell to other refineries.
Okay, so there is no specific synergies regarding NRL being in the subsidiary now.
No.
Okay. And...
No. There are certain limitations also with the [ related party transaction ]. We have to have transaction on arm's length basis. Otherwise, it requires AGM shareholders' approval, Board approval and all those things. So normal course, the business with the subsidiaries also have to have -- be on the arm's length basis. And even on the taxation perspective also, if we have a differential pricing or something, it will attract [ tougher ] pricing issues, et cetera, of course, for our business. It has to be on arm's length.
Allocation is presented [indiscernible]...
And the crude oil allocation in any case is done by the director of ministry.
Okay, sir, fair enough. Second question relates to status of this panel regarding gas pricing reforms. So I know that gas prices have gone up in the last few months. And probably, in the next 1 year, it may be higher than what was actually asked by the companies, but still is there any update on that panel regarding gas pricing reforms?
There is...
Yes. That panel has submitted its report in December itself, but so far as to now, it is still in the ministry under process, so nothing concrete has come out of that report. So 1 or 2 meetings also have happened, but I think it has not yet moved to the cabinet level. So there is a status quo, as far as the pricing structure is concerned.
Okay, sir. And the bookkeeping question: I just wanted to confirm or reconfirm again. So you said that your stand-alone debt is around 9,000 crore as on June end. That's right?
No. I think that number was not right. 11,400 crores. I corrected that. 11,400 crores was the long-term debt; and as of 30th June, the additional short-term debt which we have taken for NRL funding, 2,350 crores. So total debt, if you take, it is long term plus short term, it's about 14,000 crores, but out of 2,350 crores, 400 crores, we have repaid already post 30th June. So current debt is 11,400 plus say around [ 2,000 crores, 1,950 crores ], so about 13,400 crores.
And this is stand-alone debt.
And we expect to liquidate another about [ 1,200 crores ] within next 15 to 20 days.
Okay. And this is standalone you are talking about, right?
Standalone, yes.
Okay. And you said your cash is around INR 400 crore, and you mentioned also about short-term investment. What will be [indiscernible]?
Short-term investment, with the long-term investment in the tax-free bonds. We have about 1,400 crores tax-free bonds.
1,400 crore tax-free bonds and INR 400 crores of cash.
Okay, yes, yes.
Okay, okay, sir.
Somebody asked question about the Q4 GRM of NRL. It was $11.63 [indiscernible] -- it's on $11.63 per tonne.
So we have the next question from Mr. Nitin Tiwari from Yes Securities.
My first question is with respect to your operating expenses in this quarter. So there was a sharp decline vis-a-vis the March quarter, especially in the contract costs. So what is this related to, sir, if you can just throw some light on that?
The increase in the contract costs is basically on account of higher exploration activities, survey activities in the new oil field blocks that we have received.
[ Look, I think there's a ] decline in contract costs, right, vis-a-vis March, so what does that decline pertain to? And also other expenses are down, so...
Yes. The [indiscernible] in March quarter, there was an increase due to the oil field exploration, survey costs. That should -- higher contract costs in the last quarter last year, which is -- was more than the average costs of contract that we normally have.
All right. So sir, the contract costs that we've seen in this quarter will be a more ongoing run rate. Is that a correct [ position ]?
Right, right, exactly.
Yes. And sir, my second question is related to your crude production. So we've been like experiencing a decline, a continued decline, sort of in crude oil production. So what is the outlook? In case of natural gas, you did highlight that we are looking to increase production by about 5 MMSCMD over next couple of years, but what is the outlook on crude, if you can give us some sense over there? Are your message -- yes.
[ The expected ] production -- so if you compare to last quarter, Q4, it's continue increasing, but compared to last year, maybe you are saying that there is a slight increase in production. So slowly, we are going up. From the last quarter, we have increased by around 4%. Then we have the plan to go up. And new things are coming up, new wells, as I said a few minutes back also. New wells have started giving production. So production is going up. And we are looking -- and it was committed to ministry also that 5 -- [indiscernible] 5 million at one point of time '25 -- '24/'25. So we'll be able to achieve that. That is what we have now planned.
[indiscernible]...
Sorry. [ I missed the -- will the values ] [indiscernible]?
Sorry. Please repeat again.
Yes. I missed the MOU target that you spoke about that you promised to the [indiscernible].
No. MOU target is not yet final. It's still under discussion. I think the MOU target is something totally different what the company's actual performance can be. The MOU [indiscernible] [ and other factors ] now. Earlier, MOU target and company's production target used to be more or less in sync, but now things are going in a different manner or -- because MOU target is not at all [ concerted effort ]. MOU for '21/'22 is still under discussion. [indiscernible].
Right, Right. [indiscernible] more -- sir, more on a longer-term basis. I mean directionally on a long-term basis because looking at [indiscernible] if we look at the production 10 years back, it was about 3.5 million tonne. Now we are looking at more like a 3 million tonne. And there has been a [ continual ] decline that has been happening over a period of time. So are we going to continue to see this decline in crude oil production and -- because like [ law of natural decline in the oil fields ]? Or are we going to see like an annual rate of production actually looks up? So that's what [ is the next -- my question is what was there ].
Yes. In fact, Nitin, there is always a decline in production because, as you have said, these are all basically mature fields. And mature fields have a tendency to decline in production every year, but at the same time, if you look at our reserve replacement ratio, we have been going always in a positive direction. It is always plus more than 1. So that indicates that we have been able to compensate the decline through the creation of new reserves and new production. So we are very hopeful. We have now started working very aggressively in some particular [ 5 ] fields. So those are -- basically, compared to other fields, these are new fields. And we have an expectation that we'll be getting quantum-sampling production in the coming days.
[indiscernible] [ in regards to ] forecast or the estimate, what we gave for the natural gas production. We have a program for fast-track development of certain identified fields and mainly in Assam [indiscernible] fields and also in Rajasthan. So that should give us good production process in crude oil as well, but the numbers are a little uncertain, so unless we firm up the plans, it will be difficult for us to quote any number. But maybe after some time, we should be able to. Once the -- everything is confirmed, then we will be able to share some good numbers with you, but certainly there will be growth in crude oil production; significant growth, what we mean.
All right. Last [indiscernible], if I may push with one more. You also mentioned purchase of gas in a small quantity. What is that related to? The -- in your financial analysis, there was the small purchase of gas [ I see ]. What is that related to actually?
[ Purchase of gas ].
That purchase of gas.
Yes.
We have purchased. In fact, we have a joint venture block. It's a pre-NELP block. [ If it's -- so we see in ] Assam, [ below ]. So Oil India is having 44% stake in that block. And the other partners are [indiscernible] and Indian Oil Corporation. So whatever production from that gas, that [ goes ] around 1 MMSCMD currently. [indiscernible] entire gas. In fact, Oil India is marketing 100% of [ their own ] gas at present, but 44% of that, we show it as purchase of the -- sorry. 44% is accounted as our production, and balance 56% is shown as purchase of gas.
Okay, understood. So 44% belongs to you. That becomes a part of your own production. And next 56% is what you market as purchased gas.
Yes.
Yes, purchased and is accounted for in [ sales ops ].
Got it, understood, sir.
And before we proceed. There was one question about the dividends received from this Russian company. As I mentioned, the -- Singapore and Russia, this is -- accounting is on calendar year basis. So in calendar year 2020, from these Vankor and Taas [ 2 assets ], we received total dividend of about USD 393 million. And also, in current year 6 months, January to June, we have received dividend of $96 million, so far.
The next question, from Mr. Vidyadhar Ginde from ICICI Securities.
My first question is Numaligarh. Do you have EBITDA for the first quarter?
EBITDA...
Okay. The second part -- Vidyadhar, you can -- if you have [indiscernible]...
Yes. The other question was that in case of Numaligarh your stake, I think, at the beginning of the quarter was slightly over 80%. And then I think you have sold about 3 percentage points to the Assam government. So 2 questions related to that. One -- so how is your accounting in the first quarter? Is it pro rata part of the quarter at [ 80% and then at 77% ]? And the next related question is press reports were suggesting that, the balance stake sale, you will do to the Assam government by September so that their stake goes up to [ 26% ] and yours will come down to around 69%, 70%. So is that on track to happen in September?
Yes, that is on track. It was only waiting for the budget sanction from the government of Assam. I think in this assembly session their budget has already been presented. Once it is approved, we will get the money and the share transfer will happen. And that is expected to happen before September, certainly.
And what about the...
And post that, our share will be 69-point-something percent, close to 70%.
My first question was regarding -- so how is it accounted in first quarter? Is it pro rata part of the quarter at 80 and -- your share of profit? And part at...
No, no...
No. Those shares are being accounted for as assets held for sale and have not been taken into the account [ in initial capital ].
Well, so basically are you saying that in your first quarter profit you're only accounting what will be your eventual stake?
Yes.
Okay. So you are not accounting 80% of the profit, or 77%. You are accounting like 69-odd percent of the profit.
Consolidation is done based on the stake as on 30th of June, so which is around 77%...
70%, 7-0...
[ They're partly ] consolidated based on 80% holding...
Okay, okay. So it's based on actual holding.
Actual holding as on the date of balance sheet.
Okay, okay. And last question: Do you by -- plan to have any gas production in the near future in the next 1 or 2 years, where the development of the field is happening or something, where you will be entitled to deregulated gas pricing?
No. As of now, all production growth will come only from the nominated fields.
Okay, but even in nominated I think there was some provision that any [indiscernible] in Northeast after July 2018 or something will be entitled to deregulated pricing.
[ As well ], but what -- is there any field discovery? We are not having any new field discovery...
So it's not an existing field...
[ This will -- it will be augmenting ] production.
Okay, okay, okay. So anything of this sort is some time away.
Yes, yes. Unless we get some discovery in the oil fields and also something [indiscernible], then yes, [indiscernible]...
But that will also take some time.
Certainly, 3 to 4 years minimum actually. And as about -- Vidyadhar, you asked about the EBITDA of NRL. In Q1, it was 986 crores.
Okay. And what was in last year, first quarter?
635.
635, 6-3-5.
Yes.
635, okay.
The next question, from Mr. Vikash Jain from CLSA.
Sir, I just wanted to ask. For this quarter, is there any IOC dividend which is there? I mean I think the second interim dividend should have come in this quarter. Is that the case? And [indiscernible] [ didn't happen last quarter itself ].
Q1, no dividends...
No dividends, okay. So there's no big dividend which has come, except [indiscernible].
The next -- [indiscernible] dividend -- of course, interim dividend normally declares in Q1. And Q2 dividend also will be only the final dividends which have already been declared, which will be paid after their AGMs. So that is...
And sorry. Sir -- yes. So I just wanted to check. So IOCL dividend, was there a big IOCL dividend in last quarter?
Last quarter, yes. It was Q4.
Okay, perfect, sir. The other thing is in terms of the debt movement. Could you just give me a sense on how your [ DSOs ] are currently? You are saying that there is about [ 14,500 crores ], right, gross debt.
Yes.
[ 14,000 crores ] is what you said for cash and liquids, right?
11,400. Yes, that is about 14,000 crores. It's 13,800 crores as of 30th June, which today, debt concurrently about 13,400 crores because, 400 crores, we have repaid. And the cash is -- cash plus investments put together is about 1,800 crores -- 1,700 crores, 1,800 crores.
Okay. And so how do you see this debt kind of moving by the end of the year? And what is your cost of debt? So -- and I just want to understand how debt will move. How should -- what will be the interest costs, et cetera [ applicable ] last quarter?
Interest cost, I think we would have already mentioned...
No, no. I'm saying that -- how that would reduce. So broadly, how would debt reduce? Yes, yes, yes.
[ That was reduced ]. Okay, see, the rupee debt is taken from Numaligarh. It was total 6,300 crore we have borrowed, 2,000 crore for a long-term [ 3-year ] period and 4,300 crore short term. Out of the 4,300 crore, as of date, 1,950 crore is already repaid. 2,350 crores, close to 1,200 crore we expect to repay before September. So that will further reduce to around...
1,000 crores.
700 crores only. So 1,950 crores is remaining today. 1,200 crores, we'll pay. About 750 crores short-term loan only will remain after September, which also [ if those ] prices remain at the current level, remains $65 average, we should be able to pay. [ And if gas prices ] also improve, I think cash flow is going to improve in second half, so we should be able to liquidate the entire short-term loan by end of the year. So that will leave 2,000 crores for the long term, which depending on the circumstances, availability of funds, we will try to liquidate if possible even before that. Rest of the loan is all just long-term loans or foreign currency borrowings, around 11,400 crores, minus 2,000 crores. 9,400 crores. This is all overseas borrowing for Mozambique. So that will remain for some time. Earliest [indiscernible] 2024.
Okay. And lastly -- and for this long-term debt that you borrowed from -- for NRL, what is the rough cost of debt for that?
That is 4.5%.
And that is rupee long-term debt.
It's a rupee loan, yes.
The next question, from Mr. Vinit Joshi from Goldman Sachs.
I had a question on the gas production, that 5 MMSCMD growth that you have projected by FY '24. Can you give us a PAT in the sense that how much will it be over the next 1, 2, 3 and 4 years? And what is the CapEx that you are looking to spend on this growth? And finally, I think somebody else asked this as well: Like what would -- what will be the end demand sectors consuming this gas growth? Because the growth is quite substantial.
[indiscernible] is that we are working on that figure, that year-wise production, but as of now, our production from this entire Northeast is around 7 million. And from a particular field, we have been looking for a production of up to 5 million that you are mentioning. So in that field, presently we have production of 1.6 million to -- varies between 1.6 million to 1.8 million. So that is the present production trend right now. So end of this year, we'll be going to 2 million. And slowly, we'll be going to 5 million by next 3 years. That is the working plan we have been working. And accordingly, we have been stressing our drilling needs for that, and well, drilling activities are going on. As I have said a few minutes back, we have started producing one new well and which is giving a good result now. 0.2 million, we are expecting. As of now, it's 0.1-plus million. So in a day or 2, [indiscernible]. So we are expecting that. So this is the plan as of now.And the -- regarding the market. So maybe the -- Madhav, [ sir ], has already explained that the entire gas production is now [ being solely in ] the Northeast only, partly through Numaligarh refinery, partly; and mostly through BPCL, Brahmaputra crackers and polymers limited. And there are some fertilizer plants in this -- Namrup; and power generation -- for power generation in Namrup, so far, in government, though Assam is planning for one more additional plant in that -- the power generation unit. So that may give another requirement, and as of now, we have been also -- we are also in touch with those core markets. So there is no [ better ] market in the Northeast for gas production.
And what will be the CapEx for this growth, sir...
One is particular project of this field gathering station. It's around a 400 crores project, 300-plus crores project, but the procurements are going on. Once the every -- all procurements are finalized, [ they expect they will be paying less ], but the -- presently we are targeting [indiscernible] CapEx of around 400 crores.
So Vinit, it's -- what our Director, Operations just now mentioned, about the project. This is in respect of [ one capacity ] for the -- to take care of the increased gas productions. [ All ] production growth, certain additional wells and all those things also will happen. And that will get covered. It will be difficult to say that [ this will be gas. As well ], this is because of all common CapEx for the oil and gas infrastructure. So total CapEx, what I mentioned, current year, about 4,100 crores, which [indiscernible] it will be between this [indiscernible] on an annual basis. That will take care of all this infrastructure development.
Including the wells.
Including the wells, the facilities, everything.
And what is the reserve potential of this field, sir? I mean just trying to get a sense like for how long will you be able to sustain this production in the future. So if -- any color you can provide on that, that will be helpful.
It's very difficult to give an exact number, but I mean, we can give you assurance that this field will produce for not less than next 40 to 50 years.
Okay. And sir, one last question. I mean we've -- then we've seen this trend where a lot of the E&P producers are now investing in renewables, so can you just update if you have any such plans in the future to invest into the green CapEx?
Into renewables.
Yes.
No concrete plan as yet, but yes, we are in the process of having some thought process. We certainly have to augment renewable capacities, solar and something in biofuels, a lot of things we are discussing, but as of date, I think there is nothing concrete to share with anybody. I am saying within the company also nothing concrete. So maybe, 1 year's time, if something concrete come up, we'll be able to tell something, but as of now, nothing.
Okay. And maybe if I can just ask one more question, sir. I think the slight increase in CapEx at NRL that you mentioned. So can you update us? Like what is -- has there been any change in terms of the growth of the capacity or the upgrades that you are looking to do at NRL? If any -- if you can update us what exactly is the plan with this slightly higher CapEx.
[indiscernible] [ enhanced ] capacity will be from [ 3 million ] to 9 million tonnes only. Only thing is this additional CapEx, increase from 22,000 crores to 28,000 crore, proposed is basically towards this making the refinery in production petrochemical ready. It is not that a petrochemical plant will be established, but the production and all will be what we can say is really raw material for petrochemical plants subsequently with -- the refinery may think of. So this additional CapEx will be towards making the refinery ready for petrochemical production -- or sorry, for production of raw materials for the petrochemicals. So that's how it is being done.
The next question, from Mr. Manikantha Garre from Axis Capital.
Congratulations on a good set of numbers. So if I see, if I look at your gas production: The quarter-on-quarter improvement has been to the tune of 0.6 MMSCMD, so is it fair to assume that the incremental 0.6 MMSCMD would have come from Baghjan field itself? That's my question....
No. It's combined growth, not only Baghjan.
So which are the other fields which are supporting this production growth here?
These -- well, all gas production is coming mostly from this greater [indiscernible] area we say in our [indiscernible], but this -- you can say our [ earlier ] fields of Naharkatia and all those fields also are contributing to gas productions. In fact, there is a substantial amount of gas production from our old Naharkatia field.
Okay, so something is being done there to get incremental production. Of course, we have not seen such contribution earlier from these fields.
Yes, yes. Some -- regularly, all those old wells, we do work of our business. For work of our customers also, we get some additional production. [ If that won't work, nothing would ].
Right, yes. And my second question is with respect to when sir -- Harish Madhav, [ sir ], was mentioning about the consolidated CapEx for FY '22. He mentioned about the biorefinery. Can you please provide some color on that? What is the CapEx? And what is the concept about how much is the capacity and time lines here?
I don't have much details on that, but Numaligarh Refinery is in collaboration with some foreign partners. It's setting up a biorefinery, ethanol plant basically. So that is a bamboo-based ethanol production facility which will be coming up in the -- close to Numaligarh only. It will produce ethanol from bamboo. So it is a second-generation, basically you can say a pilot, sort of plant, first plant in India to produce from this type of product. So bamboo. So that is the [ thing ], but not much details are available to me at the moment readily. But subsequently, as required, I can, we can share the entire details. But conceptually, it's this. And the refinery is also likely to come up in next 2 to 3 years time. I think it should start [ operating ].
Sure, sir. Sir, I just wanted to -- a clarification on one thing. So this ethanol refinery predominantly produces only ethanol. Or because it's a biorefinery...
[indiscernible] supposed to produce ethanol from bamboo. And then ethanol [ will main itself ] in the petrol -- to the government ethanol blending program.
Right, sir, okay. And any CapEx numbers that -- can you provide, or capacity?
Readily I don't have -- I think, that information, we will need to take from NRL and then share with you.
Sure, sir, no worries. So if I understand it correctly: Apart from the 4,100 crores of CapEx for the standalone, what will be the consol-level CapEx, if you can repeat that?
[ Consol level will be, I think, between ] 5,000 crores to 5,500 crores for current year, including NRL...
The next question, from Mr. Gagan Dixit from Elara Capital.
[indiscernible] gas consumption by the Numaligarh refinery at present? And is there any gas consumption increase by the NRL by the increase in the capacity?
Yes, yes, there will be increase in gas production also.
Currently we have contract to supply 1 MMSCMD, against which, depending on their requirement, on an average we are supplying around 0.7 MMSCMD to NRL. And the [ enhanced ] capacity also [indiscernible] 9 million will require some additional gas.
Okay, okay. Sir, why I'm asking this is, sir, that because in the past we have seen that your -- many of the gas reserves are under the contingent resources because of the limitation [indiscernible] with that increase in the NRL demand. So can we expect that something -- increase in the or upgradation of the reserves, from the contingent resources to the proved and probable reserves? That is -- can be the probability, sir.
In fact, there is a plan for increasing for -- gas production in our old fields. So the -- that plan is already there. So the increase in demand from the fields, definitely we'll be able to cater for the demand.
Ladies and gentlemen, that was the last question for the call. I would now like to hand over the floor, [ Mr. Varatharajan Sivasankaran ], for closing comments.
Thank you, Momita. I would like to thank the senior management of Oil India, Mr. Harish Madhav, Mr. P.K. Goswami, Mr. Sanjay Choudhuri; and all the participants for taking time out for participating in this call. Have a nice day. Thank you all.
Thank you.
Thank you.
Thank you and -- [ Varatharajan ], for arranging this call. Thank you so much. And thank you, all the participants.
Thank you, sir. Ladies and gentlemen, on behalf of Antique Stock Broking, this concludes your conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may all disconnect your lines now. Thank you. And have a good day, everyone.
Thank you.
Thank you.
Thank you, sir.