Oil India Ltd
NSE:OIL
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
195.5532
741
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Oil India Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Q4 FY '21 Earnings Conference Call of Oil India Limited, hosted by Antique Stock Broking. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Varatharajan Sivasankaran from Antique Stock Broking. Thank you, and over to you, sir.
Thank you, Rituja. Good afternoon, gentlemen, and my apologies again for a delayed start. I would like to extend a warm welcome to all the participants and the management of Oil India represented by Dr. P. Chandrasekaran, Director, Exploration and Development; Mr. Harish Madhav, Director, Finance; Mr. P.K. Goswami, Director, Operations. I request Mr. Harish Madhav to give a brief, and then we can open the house for a Q&A. I would like to hand over the call to Mr. Harish Madhav right now. Thank you.
Thank you, Varatharajan. Thanks for arranging this call. Good afternoon, ladies and gentlemen. We declared our financial results for Q4 and financial year 2021 yesterday. And we have circulated the results as well as the detailed financial analysis to all analysts and investors. Hope everybody has received that. Before we open up for the question/answer, I'd just like to give a brief about the company's performance in last year and the results that we declared yesterday. On the production front, the crude oil and natural gas production both suffered last year, mainly because of the COVID and the Baghjan blowout incident and the other related disturbances. The crude oil production in Q4 was down to around 0.72 MMT. And on annual basis, it was 2.96 million metric tonne as compared to 3.13 million metric tonne in last year. On the natural gas front also the production was -- Q4 production has remained almost static at around 649 MMSCM. But on annual basis, the production was down to 2,642 MMSCM as compared to 2,800 MMSCM last year.On the financial results, the first 3 quarters were really bad for Oil India Limited because of the very, very low level of crude oil prices and the additional expenditure on account of Baghjan incident of about INR 380 crores.But Q4, because of the recovery in the crude prices, the performance has improved. For Q4, profit declared is around INR 848 crores. And for the annual level, we have declared a net profit of INR 1,741.59 crore as against INR 2,584 crore in the previous year. The EBITDA for Q4 was about INR 1,780 crores. Crude oil price realization, we all know that the previous year because of the COVID impact, the crude price had -- internationally had suffered a severe shock. And the average realization in the Q4, thanks to a recovery of prices in fourth quarter, ultimately, we realized around $44 -- $43.99 to be precise. And in the previous year, the average realization was $60.75 per barrel. So there was a drop of around $17 per barrel in the oil price realization. Similarly, in case of natural gas also, the price was lower from $3.46 average in '19/'20 to $2.09 average in 2020-'21. The combined effect of these 2 price decreases is close to around INR 3,000 crore on the turnover and a significant quantum on the net profits.On the expenditure side, we have taken a write-off of about INR 850 crore towards various explorations which had gone dry -- wells, which had gone dry, a total of about INR 850 crores, mainly in KG basin project and the Mizoram wells. The Baghjan blowout which happened in last year May, it was fully controlled by middle of November 2020. And we incurred a total cost of about INR 449 crore in management of this blowout operation, including the compensation that we had to pay as per the NGT order as well as the various relief and rehabilitation operations, which we undertook during that period.This additional expenditure of INR 449 crores we have reflected as an exceptional item in our accounts for March 2021. But in spite of all these challenges of COVID, Baghjan blowout, the company has -- in Q4, we have recovered significantly. As I just mentioned, we have reported EBITDA of around INR 1,754 crore in Q4. And in fact, the last year's Q4 EBITDA was about INR 100 crore negative because the prices had started falling by end of February and March. So Q4 last year was really bad.In the major development, which also people are aware now, we have already intimated the stock exchanges, we acquired additional 54.16% equity stake in Numaligarh Refinery from Bharat Petroleum on 26 March 2021. We paid a total cash consideration of INR 8,676 crores. This has increased our equity stake in Numaligarh from 26% to 80.16% as on 31/03/2021.This acquisition of 54% stake also includes 10.53% share that we have acquired on behalf of the Government of Assam, which they intended to buy from BPCL, but because of the ongoing elections at that point of time, they could not do that. So we have purchased them. And during the current year, the Government of Assam will buy these shares from Oil India Limited. So accordingly, the reflection of this transaction has been made in the accounts.In addition to our investment in Numaligarh of INR 8,700 crore, we have also made CapEx investment of close to INR 4,600 crore in other E&P activities and infrastructure creation. During 2021, 2 of our major infrastructure projects, the secondary tank farm at Madhuban and a gas compressor station at Makum in -- both in Assam were dedicated to the nation by Honorable Prime Minister, Shri Narendra Modi.Increasing the exploration acreage, we participated further in the OALP bidding round 5, and we have acquired 4 more blocks in that, which has increased our acreage to -- by 13% during the year. One good thing I'd like to share with you, it's -- we feel it's a major achievement. The Oil India Limited under the OALP rounds of bidding, we are the first company to start and complete the survey and other exploration activities. And we are also the first company to start survey and complete the activity in one of this OALP round 1 block.The company has been recognized by the Federation of Indian Petroleum Industry. And this we have been awarded the Oil and Gas Exploration Company of the Year Award for 2021. Since we all know that the country and everybody, every part of the country, people had a lot of suffering because of the COVID and as of our contribution to the society, we have been in the forefront of helping and assisting the state government and the central government in COVID management. Company is providing assistance under its CSR initiatives for setting up several oxygen plants in hospitals, providing concentrators to governments and a large-scale vaccination of all the employees, their families and other related stakeholders. We have already incurred an amount of about INR 55 crore, INR 56 crore under the CSR initiative for COVID management in all these activities. And the last thing before I complete, our Board has declared -- recommended a dividend -- final dividend of additional INR 1.50 per share for 2021. This is in addition to the dividend of INR 3.50 that we paid in February 2021. We have, along with us, our Director, Exploration and Development, Dr. Chandrasekaran and Dr -- and Mr. P.K. Goswami, who is our Director, Operations. So in case there is anything you wish to further add to this, whatever I have said, we can do that. After that, we can open up for the question/answer. DED, sir.
Yes. Good afternoon. Like Mr. Director, Finance, whatever he has covered almost everything. I would like to elaborate on 1 or 2 points, like we -- our continued focus and the stress was in Northeast and Rajasthan. So we continue to focus on those new acreages in these basins. So we could win 4 blocks here, 2 each in Rajasthan and -- 2 in Rajasthan and 2 in Northeast, Assam.So like what Mr. Director, Finance was telling the -- we -- in fact, immediately, within 1 month of the PEL, we started the seismic data acquisition, and we have also completed in 1 block. So it is -- what I'm trying to tell is the planning is going on in the right direction. And we have almost covered the exploration acreages, the seismic data acquisition whatever needs to be done is being done. We have almost covered 96%, 97% of the total target.So with this, the exploration campaign is going on in the proper way. And we were also successful in getting certain fees appraised. So one is the Lakwagaon which show the extension of the field and then we could appraise it properly, and it was a good extension of the field. And this one -- this field and also Balimara and also Baghjan. So these fields, we are going ahead with certain fast-track appraisal cum development in the next 2 to 3 years. So the plans have been elaborately made and the models have been made, and we are going ahead with the fast-track development on this. And we have also made the -- this year, the success rate was 50% in exploration drilling. And we have also made a gas discovery Dinjan in Assam. Then this year, we could also maintain an RRR of more than 1, reserve replacement ratio, which is 1.16 this year. And so the 1P, 2P results are in a comfortable position. So this is the -- in a nutshell. And as Mr. Harish Madhav, our Director, Finance has told, so all our efforts have been recognized, and we have been awarded the Best Exploration Company of the Year during 2021. Any particular thing I'm -- I'll be willing to take. Thank you.
[Operator Instructions] The first question is from the line of Probal Sen from Centrum Broking.
Two, 3 questions. One was I think the reserve replacement ratio was mentioned of 1.16. Can we get a sense in terms of absolute numbers, what has been the 1P and 2P reserve addition in this year?
Yes. I will -- 1P was -- I'll just give you the numbers. Sure.
Yes, sir.
Probal, I think you can continue with the second question. In the meantime, we can provide this information.
1P was 7.4126 million tonne equivalent and...
Sorry, how much, sir? 7.4?
7.4126. 7.4 -- yes, 7.4. And 2P was 6.3 -- 6.03.
Is it possible to share what is the total 1P and 2P as on date, sir?
Yes. The total 1P would be 105.55. And the total 2P would be 190.84.
190.84?
Yes.
Okay, sir. That is very helpful. The second question was a broader one. In the -- before the Baghjan fire incident, I remember that the guidance was that Baghjan would be one of the more promising new areas that was in our portfolio, and it would be one of the key drivers for production growth. So my question was now that the damage has been contained and work has started as before, I presume, do we still maintain that level of optimism? And are there some more regulatory compliances that we will need to do in order to get more permissions going ahead for further drilling and development since I believe it does become -- has a part of it as a protected forest area. That was the broader question, sir.
Yes. Okay. So the focus on Baghjan is even more optimistic than what I -- I think I recall this sort of a question last time also. So in fact, as I told you, the appraisal of the area has been quite promising and quite encouraging. And our efforts would be like, as I told you earlier also, our focus is basically while we would continue to do the development and you are in all the mature fields, there are 4, 5 trust areas which we are targeting. Chief among them is Baghjan. And so we have also got an extension of some oil leg. So I won't go into the details, but my point is that Baghjan is, in fact, promising, more promising than what we had envisaged earlier, number one. Number two, is your question of about the regulatory -- regulations from the government or the National Park, whatever...
From the environment side, sir, on a broad level right now.
Yes, yes, yes. So we have been given permission to go ahead and drill extended reach wells, okay? So what we would be doing is, we will not be entering any eco-sensitive area. We will not be placing our rig anywhere there, and we will be following all the guidelines of maintaining the distance from the boundary. So we would be drilling only an extended reach drilling, which would be beneath the surface. And so we have already identified the locations, and we would be going ahead with those sort of drilling program in the next 3 -- 2 to 3 years. And so we are taking care of all those things. And we've not -- the intention is not at all to enter any eco-sensitive areas. These, we have already got the approval from the government. So we will be doing only limited to only that. As per the...
Okay. Sir, one final question.
Yes.
Yes, sorry, go ahead, sir.
Yes. Please, please, go ahead.
Okay. Sir, just 1 final question, if I may. Near-term guidance for FY '22 oil and gas production or FY '23, anything can you share right now? Any targets which we might have set or committed?
Yes. Probal, as you know, the target fixation is basically when we declare the final targets, it's based on the MOUs that is finally signed, but for 2021 MOU numbers I don't recollect exactly. But as for the plan, what Director, Exploration just now mentioned, so as per that plan in 2021 -- '21-'22, the crude oil production, I think, we are going to target at around 3.05 million metric tonne and natural gas around 3.1 or 3.2 BCM.
Okay. That is very aggressive, sir. That is good to know.
The next question is from the line of Nitin Tiwari from Yes Securities.
First question I have bookkeeping one. So if you can give us some CapEx guidance for FY '22 and '23 and preferably if you'll be able to break it up into survey expenditure like in how much you're going to spend in survey and exploratory, development, drilling and so on and so forth? Sir, that would be my first question.
Could you kindly repeat? I'm sorry, I was...
DED, sir, I'm taking these questions, sir.
Okay. Okay.
Mr. Nitin, our total planned CapEx plan for this year is around INR 4,100 crore, INR 4,108 crore, if I correctly remember. And this includes a major this thing in survey and all those things break up will be I think, our -- the approved plan what we have as of at hand today, what we have planned is INR 4,100 crore. And last year, our survey expenditure was around INR 800-plus crore because OLAP rounds what we discussed in the opening remarks, a survey we had undertaken, extensive survey in various OLAP blocks. For current year, out of this survey will be around INR 400 crore to INR 500 crore will be the survey expenditure out of the INR 4,100 crore. And about INR 1,700 crores to INR 1,800 crores will be the drilling operations. So total exploration will be anywhere close to around INR 2,400 crores, INR 2,500 crores. And then the further capital equipments and the overseas acquisitions. So the overseas means the investment in Mozambique. So that's how it is for INR 4,100 crore.
And sir, do we have like any number for FY '23 as well, which we have fixed as of now or that is still open?
Well, see, detailed plan it is not there, but our investment will remain in this range around anywhere between INR 4,000 to INR 4,500 crore, depending on the activities.
Right, sir. Sir, my second question is related to our crude oil production. So from past in a couple of quarters, if we see the trajectory, the trajectory is of a decline in production. So I just wanted to understand what is the company's outlook going ahead and which all fields we foresee, like, are going to basically add to production and so if you can maybe throw some light on that?
Yes.
Goswami, sir.
Harish, sir.
Sir, you and Goswami, sir, can take this question.
Yes. So basically, I would request to Director, Operations. Before that, I'll just -- see, as you rightly said, almost -- most of the fields are old and they are mature. So we are going ahead with complete digital modeling of all these fields. So we are looking for unswept areas, the normal reservoir management principles, and we are identifying those areas where there is still some unswept oil, and we are also going on with certain EOR projects. So this is as far as we addressing the issues in mature fields.So -- and also what we have certain positive happenings which have had -- we had in the last couple of years is, like I said in response to your previous question, is we have got some good developments in 3, 4, 5 fields. One is 4 fields are in Assam and Assam, Arunachal Pradesh. One is Baghjan, Balimara, then Lakwagaon. Lakwagaon we have had a nice appraisal done during 2021. And Balimara also, we have done an appraisal. And Baghjan, as I told you, that the field -- so I cannot say certain things now because they are not announced, but we have got some good wells which we have indicated and extension or very -- which is maintaining the positive -- which is not -- which are -- which can be developed in a nice manner. And so in the next 3 years, that is '21-'22, '22-'23, '23-'24, we will have a very intensive drilling program of development and appraisal program in these areas.So yes -- and Kumchai in Arunachal Pradesh. This particular field, which we could not get the PML for more than 15 years, we got it in 2018. And that now after a lot of persuasions, the government has granted us till 2038. So this has granted us an opportunity to plan properly now. So the Kumchai field in Arunachal Pradesh and these 3 fields in Assam. And also Rajasthan, we have got Baghewala which is a heavy oil field. So these fields, we can say that they are semi-virgin even now. So we are going to have a certain intensive drilling program in these areas in the next 3 years. This, plus the management of the mature fields, will lead us to maintaining and enhancing the production slightly over the current levels in the next 3 to 4 years. So we are very hopeful that we'll be able to maintain the current levels and plus add definitely something more than the current levels.So this is for -- and also there is a good opportunity and potential in gas. In gas, we've got -- this year also, you've got a discovery Dinjan and Baghjan is a very prolific field. So Director, Operations would explain to you that we're going ahead with certain infrastructure projects for handling more gas per day. And so with that infrastructure also coming up in the next couple of years, the wells would be drilled and we are very hopeful that the oil and gas production would be maintained and gas production would be enhanced substantially.
Good afternoon. I think most of the things are nicely explained by Director, Exploration and Development. One or 2 things I'd just like to add. One thing is that the mature fields, they have so many nonproducing wells we have now. So we are trying to reduce the number of nonproducing wells and -- by some incorporating new technologies service model for these wells, in which we are converting these to producing wells. That is one agenda we do have now for gaining production from the whole Hari Oil wells. So this is 1 thing.And as Director, Exploration and Development has rightly said that there are some bottlenecks in some regions for infrastructure. Those also we have taken up during last 2 years. So some of the projects have been completed and some projects are to be completed within next -- this year and next year. So with that all those bottlenecks will be over and Baghjan as sir has rightly said, Baghjan is a very prolific field. We are developing Baghjan with a certain pipeline. We have started, that will be completed in a -- during 2 or 3 months. So with that Baghjan gas production will also go up and one have to remain patient also in Baghjan. And 2, 3 new infrastructure like in East Khagorijan, then Nadua all those things are coming up. So in that production that we -- every one was thinking that production is going down, but we have all these plans ready to make it in a faster growth. Thank you.
Great, sir. So basically, if I understood it right, what you're trying to do is, you're trying to maintain your crude oil production and basically grow your gas production through infrastructure addition. And sir, also highlighted about the appraisal program that you're going to undertake over the next 3 years. So if the understanding is right, like next 3 years, we will be undertaking the appraisal sort of program and development would, like, be post that. So any reasonable incremental production would take about 3 to 4 years. Is that understanding correct, sir?
No. No, not exactly. So the appraisal of these fields has been completed to a large extent. So what we are now going ahead is only some out-of-field appraisal wells. But today, most of these would be development wells. So what will happen is -- yes, but the wells do take some time to get drilled. And so it will take a couple of years, so 2 to 3 years. So as we look at this, we will maintain these production levels from the current year and slowly step it up in the next couple of years. So that's the status.
The next question is from the line of Sabri Hazarika from Emkay Global.
I have 3 questions. So first is on the cost and bookkeeping side. So if I look into your expenditure breakup, so there's been a lot of volatility since the last 3, 4 years, even if we like consider annual numbers. So your provisions, which were earlier at around INR 400 crore to INR 500 crore range, I think in FY '20, there was impairment and some overseas provision, but FY '21 also has been around INR 1,000 crore. Of course, FY '21 also had some adjustments. So going forward, how would the trend be like? And out of this provision, how much could be the recurring provision and how much would be nonrecurring going ahead?
Sabri, this much -- in provisions part, see, last year, out of the total INR 1,800 crore provision which was there, it included an impairment provision of close to -- of over INR 1,200 crore of these overseas assets. So that leaves a normal provision range of say anywhere between INR 500 crore to INR 600 crore.
And this year?
Even in the current year that INR 1,000 crore what we are seeing that again, an impairment provision of about INR 100 crores has been taken for the Russian assets, where we have taken last year also on revaluation about INR 100 crores the license 61 Russia is there and an additional provision of a well in KG also has been taken for about INR 400 crores. So the normalized provision, if we remove the exploration write-off or impairments, et cetera, it remains around INR 500 crores, INR 600 crores annually.
Right. And this time, you have taken, like, impairment in many assets, especially overseas assets. Are we...
Also like I said, 61 Russia which is INR 100 crore. And the other it is -- the Venezuela also we have taken an impairment of about INR 60 crores.
Okay. So going ahead, do we have any more risk of further impairments? Or right now, we are done actually in terms of impairment and any kind of provisions, I mean, from the existing assets, not the new ones?
Yes. From existing assets, see we -- whatever 6, 7 assets were there -- see, this license 61, we have taken a large provision already last year and current year. Even Oil India U.S. shale gas assets there also, we have taken a significant provision last year. So I don't think there is any further scope of any further provision in these 2 assets. That leaves this Venezuela, that also Venezuela only investment was about INR 54 million, INR 55 million, out of which INR 60 crores we have taken. So Venezuela also, I don't think there will be any major impairment coming up in future. Mozambique and Russia other 2 the Vankorneft and Taas, these are the other 2 blocks, so as per the current indication, it's no impairment but anyway, this depends on -- everything depends on the developments, how it happens and so many factors which are considered in impairment testing. So if something comes up, we will have to provide. But apparently, there is no indication that there will be any further impairments.
And no this -- and nothing like -- nothing has been like decided on that Mozambique, I think, insurgency and Total taking their staff out. So that thing currently...
Mozambique is -- that is the current development and there is a force majeure in place. So the indication is that things should be -- gets resolved by -- within 6 months to 12 -- 6 months to 1-year time frame and the project should be back this thing. But in any case, this factor of Mozambique, the recent development of insurgency and the force majeure, while doing the impairment testing, we have considered this adequately. And considering even 1 year force majeure, 2 years force majeure, no impairment has been worked out.
Okay. Okay. And secondly, if I look into other expenses, another one is the cost of support service and contract. So this has also fluctuated. It was -- used to be around INR 800 crore, INR 900 crore, then it went up to INR 1,100 crore. This year, it has been INR 1,400 crore. So was there any one-off or this has like -- I mean considering FY '21 is a low oil price year, so the support contract cost going up, anything specific on that?
No. See, if you see the last year figures also this cost of support services contract cost was around INR 895 crores last year. This time, it has increased to INR 1,400 crores. So 1 major development, which comes into the contract services is the cost of service, GNG studies that we undertake. As we mentioned in the beginning also in the OALP block, this time, we have undertaken extensive survey. Total expenditures on surveys, which used to be around INR 350 crores to INR 400 crores, this has increased to around INR 800 crore-plus in current year 2021. So because of that, that's about INR 500 crores additional cost is coming in this.
So this will continue for some time? Or we have done largely...
Not necessarily. I think OALP major survey work has been done, but it's still around INR 500 crores annually survey, we will continue. Maybe for next 1 or 2 years till all the blocks these studies are done.
Okay. And another is insurance rent and all that has actually fallen significantly in FY '21. It used to be around again on the INR 700 crore range, it has fallen to INR 220 crore. So anything on that? There has been some reversals, I guess, some negative numbers have also come...
No. I think that is basically because of the exchange rate variation. This also includes the exchange rate gain or loss. Last year because rupee had depreciated from about INR 69 to INR 74 there was a loss of about INR 500 crore. This time there is an exchange gain of INR 100 crore. So because of that only this variation is visible.
Okay. And just 1 last question. Sir, your dividend this time high so was because of NRL right, final dividend?
Yes, NRL, and IOC. Yes, both.
NRL and IOC, both. Okay. Okay, sir.
The next question is from the line of Vidyadhar Ginde from ICICI Securities. [Operator Instructions]
Yes, sorry. My first question is if you could give us the breakup of your oil and gas IP and 2P reserves?
I think, Vidya, in the first question, our Director, Exploration already gave that response -- gave those figures.
I don't think he gave a -- he didn't give an oil and gas breakup. He gave the total...
You want oil and gas breakup.
Gas break. Yes, yes, yes.
If you don't mind, we'll provide you separately?
Sure. No problem.
I'll provide separately. Yes, that's better.
So my next -- no problem. So my next question is on the -- what do you expect now on the gas pricing, there are some talk of some changes. But now with the global environment having changed, there will be some improvement in H2 this year and next year is likely to be far better given the significant improvement in underlying gas prices. So do you think the formula will change or we may stay the same formula, what appears to be the probability of any change on that front?
Vidya, just 1 thing on the first thing on the change in the formula, I think -- we all know that there was a committee formed by the government. The government has considered that prices are low, need a revision. Committee was formed. Committee has submitted its report to the government in December. It is under consideration. That's all I think we can say on this part because it's a policy matter. I don't know when the government will decide this year, next year, second half or whenever. But as far as the current formula is concerned, yes, the prices should start looking up. And second half, we should have somewhat a little bit recovery at least in the price.
The next question is from the line of [ Rutul Shah ] from Sumangal Investments.
Sir, what is the consolidated debt as on 31st March? Hello?
Yes. It will be around INR 18,000 crore.
INR 18,000 crore. That's a lot of debt considering the size of our profit pool. So...
Don't consider the size of profit. We also have a big asset NRL in our fold now. It's a big refinery, which we have. So this INR 18,000 crore when I say this includes about INR 6,300 crore on account of NRL.
Yes. But not long ago, you were cash-rich. I think cash-plus 4, 5 years ago, if I remember correctly.
Earlier we were cash-rich earning money from interest. Now we have invested it in the business now. So naturally, the major investments have happened in Russia assets.
Yes. So all Russia, Mozambique, but none of these assets are going to give you return in near future, sir. So my question is how do you bring down the debt?
I don't think your question is right. Russia is already paying us dividends. Almost 60% of the total investment we have already recovered from dividends in Russia. So Russia 2 assets, which we acquired in 2016, they are regularly paying us dividends and good dividends. In 4 years' time, we have been able to recover around 60% of the investment. Mozambique -- yes, Mozambique there have been issues, which were not anticipated. It is going into trouble once again. So once the asset recovers, I think it will start paying up. And the [indiscernible] investment in any case is going to give us continued good dividends and good investments. So we'll be able to liquidate this loan. Out of that INR 18,000 crore, what I just mentioned, about INR 2,000 crores we have already repaid which we borrowed from the [indiscernible] short-term loan. And another about INR 2,000 crores we'll be able to liquidate within the current financial year from -- as we anticipate our cash flows to be that much. So we'll be able to do that. So next 3 to 4 -- next 3 years time frame, I think, the loans should be fully liquidated. That should leave Russia and Mozambique only. Mozambique, of course, when the production starts as anticipated in 2024 then only the flow of consol will start.
And sir, 3 or 4 years down the line, how should we look at your total production -- oil equivalent, I mean, the oil and gas combined, which hovers around 525 -- 550 currently?
Chandrasekaran, sir?
Yes. See, roughly, it is around 5.5, 5.6 million tonne equivalent for now. In all positive, it should reach anywhere above 7, 7.2 million tonne equivalent in the next '23-'24.
By '23-'24?
Yes, yes. By '23-'24, max '24-'25, we should cross 7, 7.2 million tonne equivalent.
The next question is from the line of Vikash Jain from CLSA.
So I just wanted to know. So there is a lot of positive momentum it seems around some exploration success and whatever you can see in [indiscernible] very simplistically put Oil India has seen over the last 10 years production, oil production fall by almost 25%, okay, last 9 years or so. And can we say that the number that you see the annual average for this year, is that a clear bottom and there is going to be a significant rebound from here over the next couple of years or the coming 3 to 4 years?
Vikash, you are talking about the production levels?
That's right, sir. Oil production, which I think -- which kind of -- we've fallen by 25% in the last 9 years or so. So I just wonder if this is really the floor and from there with all the success that you've seen and we should start looking up?
Yes. Sir, Harish, sir...
Sir.
That's right. That's right. See, there are a lot of challenges. But as a Director Exploration and Development, as I have been telling in response to several earlier questions, see, there are some development activities which have been taken up in certain fields. So this should definitely take us up. At the same time, the mature fields will continue to decline. So we need to pop it up and then add something -- some -- few barrels floor and above. So we are very hopeful that this will happen. So as you rightly said, if I can borrow your words, yes, this should be the rock bottom. And so we have never gone below 3 million tonnes. This is the first time in several years now. That is due to several other reasons other than reservoir also. So in the next couple of years or 2 to 3 years, this management also is likely to be much better, number one. And then this Baghjan incident and other things, we are likely to come out of it -- I mean we have already come out of it, but still there could be some minor hiccups here and there. So those would be addressed. The mature fields will continue to decline. So that, as Director Operations was saying, we are going ahead with liquidating the old wells and then doing a lot of work over. And the development of certain -- still, I can call them semi-virgin because whatever has been produced, there is still more potential, like in 3, 4 fields whatever [indiscernible]. So this is the outlook which we have, and we are working towards it.
Okay. And the other question is, so the debt number that you said, that was stand-alone or consol that -- what is standalone debt overall? Hello? Harish, sir.
Hello? Sir, Harish, sir.
Sorry to interrupt sir, the line of Mr. Harish Madhav got disconnected. Please stay connected while we reconnect him. [Technical Difficulty]
We were disconnected in between from [indiscernible].
Okay. So can I ask my question now, Harish, sir?
Yes, Vikash, please tell me.
So I was asking, so the debt number that you mentioned, that was stand-alone or that was consol? That was consol, right?
Stand-alone is about 15.
Okay. Okay. And this -- the other question that I had was this particular year, I think we did touch upon this briefly. Survey expenses went up significantly. So where do you see them settling down, this year or next?
Next year, we have, I think, total planned survey expenditure is around INR 450 crore approximately INR 500 crore that range.
So I mean, this went up to about INR 850 crores this year, right?
Sorry?
This year, it was about INR 850 crores, right?
it was around INR 830 crores, INR 850 crores, yes.
The next question is from the line of Avishek Datta from Prabhudas Lilladher.
Sir, just wanted to know, like, can you just update on the Numaligarh CapEx program?
Numaligarh refinery expansion program, which is approved as of now, it is INR 22,000-plus crores. And the project got approval, I think, last year, 2020, sometime from the cabinet. And it's -- already activities have started. The work orders, et cetera, are being issued. And by '24, I think the refinery is supposed to get completed. In the meantime, there is some talk of reconfiguration also, addition of some units, et cetera. So the revised cost would be around INR 28,000 crore for the refinery. But this is subject to approval from the Government of India. So present approved cost is INR 22,000 crore.
And sir, just want to know like this excise benefit which you currently enjoy in Numaligarh, that will continue even post expansion of -- to 9 million tonnes?
It will continue, yes.
Okay. And how do you plan to fund this revised INR 28,000 crores whatever is -- what your plan, sir?
This total investment cost is -- [ dedicated ] ratio is 70:30. So 30% will be the equity contribution. Out of that 30%, something will be from NRL's internal resources and the rest by the equity contribution by the partners. So based on INR 28,000 crore, basically, our equity contribution will be about INR 3,500 crore.
How much, sir?
About INR 3,500 crore for Oil India for the 70% equity that we will be holding in NRL. [indiscernible] span over a period of 3 to 4 years on the project.
So this revised time CapEx will also include -- will also delay the time line project commissioning?
I don't think so. Project timelines will remain same.
Okay. And by that time, the 2 pipelines will also be commissioned, which you plan to for one product and one for the crude oil?
Yes, yes. Otherwise, the refinery expansion projects will not be completed because crude oil sourcing has to be there and evacuation facility. So that is a complete project. All crude oil pipeline, evacuation pipeline, everything.
The next question is from the line of [ Saket Kapoor from Kapoor Company ].
Sir, as you were alluding to the fact that a major part of the debt -- not major, but a substantial part of the debt is attributable to the foreign assets also, so how much is it for the Mozambique and Russia? Russia, I think to you clarified INR 2,000 crore is what is still left as of -- after the dividend payout.
See, if -- our total stand-alone debt is about INR 15,000 crores. Russia -- the Russian debt figures into the consolidated results because that debt refund raising was at the subsidiary company level in Singapore. That is USD 500 million equivalent, [indiscernible] INR 3,500 crore. And the domestic debt, what we have about INR 15,000 crore. This is INR 6,300 crore as of 31 March, INR 6,300 crore, was from this Numaligarh Refinery expansion we've invested. And the balance, entire thing is for this 15 minus 3, INR 9,000 crore is for Mozambique.
Didn't get, sir. You gave the breakup last time I missed it. Out of the INR 15,000 crores, INR 6,300 crores is towards...
Out of the total stand-alone loan borrowing of INR 15,000 crores, INR 6,300 crores is for the Numaligarh investment and remaining around INR 8,700 crore, INR 9,000 crore is for Mozambique.
Is for Mozambique. Okay. So Mozambique is there in the standalone, that is -- and sir, what is the asset size...
Mozambique and Numaligarh, both are in the stand-alone and Russia is under the subsidiary of Singapore.
Okay, sir. And what is the asset size, sir? I mean what are the equivalent oil and gas, which will be anticipated once commercial production commence in Mozambique, say, 2 years down the line as the program is?
Mozambique production is not 2 years. It is -- I think it will be somewhere in -- as per plan, it sits somewhere around 2023-'24 only. And I didn't get your question about the asset size. I didn't get what you're...
Sir, I only want to understand what is the oil equivalent from the Mozambique asset? We have played a substantial part in the acquisition. So when the oil starts flowing from the field, what is the oil equivalent in the field as per the discovery or as per the investment that we've made? The total oil equivalent that could be extracted over the life cycle of the oil field?
I think as per the Mozambique, if I correctly remember, the Mozambique total size of the reserve was estimated at about 75 BCM. So that is the -- all the total project life cycle. Initial 2 phase, which we are developing is for 6 million metric tonnes per annum capacity each field, so 12 million tonne capacity production will start in 2023-'24 as per the current plan. And then subsequently, these phase will be expanded to another 5 or 6. So total production, the ramp-up will happen somewhere over time frame of maybe around 10 to 15 years. But initially to begin with, '23-'24, 12 million tonne production will come, out of which 4% share will be of Oil India.
Right sir. And sir, as you told the technological changes we are going -- moving away from the traditional ways. So -- what is the -- what are the benefits? And in adopting these technological advancements is the requirement for, say, seamless pipes and all which are currently used in exploration? Or do you see significant changes in the way the consumables will also change in the technological advancement, which you spoke earlier?
[ Devi ] sir, I think this, you can take it. This is about the exploration part?
[indiscernible] is concerned, we have done a very, very good system in place. So we have also inducted a number of technologies in our areas. Like even this Cyclic Steam Stimulation, which has been inducted in Rajasthan, that is first of its kind in India. And that is also the first in the world like at that depth around 1,100 meters, we have successfully done the Cyclic Steam Stimulation in Rajasthan. That is the first in the world itself. So what we are doing is like in the exploration and the development and production, we have -- so this year, we have also inducted airborne gradiometry survey in the entire -- our acreages in the Northeast, where doing a regular seismic is not possible because of the logistics and the terrain and things like that. So what we are doing is, we have -- it's an airborne gradiometry survey that we have already started and we are doing. And then we have also -- we are in -- we have entered into a lot of work association so say, for example, [ IT, Bombay ] and then Norway for the carbon capture and sequestration. So we are going ahead with that. And EOR also, we are going ahead in both in the carbonated water and also the traditional the chemical EOR. So and we are also -- we have also inducted something called Passive Seismic Tomography. It is enough to say that we are abreast and then we are investing [indiscernible] -- yes.
I was looking at the -- your traditional ways, seamless pipes was required for the exploration purpose. So is there any change in shift in demand due to the new technological advancement or your requirement for the same remains the same? And what has been your annual requirement for this year and your projections going forward?
The requirement is to reduce the cost of production. So ultimately, the gas price is less. So if you're not able to produce below the cost of -- below the price, it's not going to be economical. So what we are doing is one is on the exploration front. Another is also in the production in enhancing the productivity per well. So this also is a bigger focus, which we are doing, like in gas wells, what we are doing is, I think Director Operations will tell about this, we are going ahead with changing the whole size of the tubings on the casings based on the productivity of the wells. And the per well productivity we are trying to enhance that less number of wells are drilled for producing same amount or more amount of gas. So as far as the oil is concerned, we are going pre[indiscernible] for that. So maybe when you see, in these sort of technologies when we induct, it is -- if you want me to give some quantification of the money which is being spent, it is normally around INR 200 crores, INR 300 crores, INR 400 crores, which the overall thing may look optimal, but along with this, we are also investing the data acquisition in the technology front. So those were I would like...
Sir, last point is about PSUs are investing a lot in the renewable segment. And also the government has preponed this ethanol blending program also. So anything on that front, sir, where we are making any further investment?
Yes. Harish, sir, if you have the numbers like renewables?
Yes. Renewables, we have total capacity of 188 megawatts, 174 megawatts in wind energy and 14-megawatt in solar in Rajasthan, Madhya Pradesh and Gujarat. And -- but this all investment took place even 4, 5 -- started with 2011-'12. Last 3, 4 years, we have not added any more capacities. But coming to your question of ethanol thing, we are also considering setting up a grain-based ethanol plant of about 2,000 tonnes per day -- 200 tonne per day capacity, something like that in Assam, State of Assam. Well, that is very elementary stages of the studies, et cetera. But we are thinking of setting up it up. That is the only thing as far as Oil India is concerned on the ethanol front.
And on the biogas plant, sir, anything on that -- anything in the...
Biogas I don't think we are anticipating anything, we are planning anything.
Right, sir. Sir, I was looking in the other income component also, sir. We see a significant part of your profit, there is the other income for this quarter. What constitutes this INR 1,330 crore of other income, sir?
This includes -- a large part of it towards the dividends that we have received from Indian Oil Corporation and Numaligarh. Numaligarh, there was a significant increase in dividend because of the disinvestment thing, a large portion of their reserves, et cetera, they have distributed. So about INR 700 crore-plus dividend we got from Numaligarh and about INR 500 crore from Indian Oil Corporation.
Sorry to interrupt, may I request Mr. Kapoor to please rejoin the queue. We have participants waiting for the turn.
Let me conclude. Just give me a -- sir, allow me to conclude, sir? May I conclude?
Yes, please.
Yes, sir. Sir, then out of your profit of INR 1,210 crore if we remove this other income part, we are -- before [indiscernible] exceptional losses for this quarter also. That means the operational profits are not sufficient meeting the expenses?
Gentleman, please tell me 1 thing. My investment in Numaligarh is it for other income for deposits or is it not an operational income? Investment in Indian Oil Corporation is purely an operational income...
But sir since revenue from operations -- yes, yes. Please.
Revenue from operations, my investment, this is how I basically develop my business. If I am acquiring a refinery, it's pretty much an operational income. Just because of accounting purpose, I have to classify it as other income. Does it make it -- which is business income. It is very much an operational income.
The next question is from the line of Manikantha from Axis Capital.
So I have 3 questions. One is with respect to the mature fields that Chandrasekaran, sir, has mentioned that our production is going to decline here. So if you can just quantify that like which EOR activities? Also, are we saying that the decline would be there and how much would be that? And with EOR actuaries what could be the decline? That's my first question, sir.
Yes. See, EOR -- as far as EOR is concerned, Oil India has been doing it maybe during the last, say, over the last 3 decades. So -- okay? So the -- there is a very regular thing called low salinating water injection. So we -- so that is to give [indiscernible] a that is the method. And almost around 15% of our current oil is produced through that only, okay? So now what we are doing is, this sort of a system is being continued in all the fields, wherever it is required. In addition, what we have done is we have carried out the screening of all our reservoirs and then we have got it also screened by other institutes and we are going ahead -- with the clinical EOR, which will be unique to each reservoir. So that would have to be done at the -- so in the next 2 to 3 years, we would be completing the pilots in at least 2 to 3 reservoirs. So then it would be replicated in the total field. And what we hope is maybe around another 5 to 7 years -- in the horizon of 7 to 10 years, around the 10% of the total production would be through this process.
So if I understand it correctly, you were saying that with the chemical EOR, we'll we still be -- we'll maintain the production or there will be reduction with that as well?
No, no. No, sorry. Let me try to explain it. See, in a normal manner, business as usual, every reservoir will decline and the production will decline, that is due to the decline in pressure, and there will be -- so that is normal. That is normal with any reservoir. So what we try to do is we try to arrest this, and then we try to increase the recovery factor. So this can be done through several methods, which -- I mean, I don't think I would go into the details, but it is enough to say that there are several methods which we've already are implementing in our fields, which is called -- which is one of the primary things is low salinity water injection, which is we have got an enormous infrastructure of water injection, which is a very low salinity. So that is one thing. Another thing is about chemical. This chemical also, we had already inducted -- we inducted some -- a few years back. And now what we've done is, we have again completely done the -- we are doing the digital model, seeing the sweet spots and then planning -- we need to drill wells and inject those chemicals in that part of the field. So this is a time-consuming, and that costs us. So that is why I said there'll be a decline, and we are trying arrest it through an enhanced oil recovery method, which worldwide if you see, it's around 3% of the recovery which can be achieved through -- the production through EOR, we are hoping that it can be increased around 7%, which is -- 7% to 8%, which is a very, very positive number for us. Have I tried to answer your query?
Yes, sir. That makes it clear. And my second question is with respect to a news article, which talked about us reentering the fuel retail business now that we have NRL refinery. Can you please throw some light there, sir. Are there any plans to enter the fuel retailing?
Not immediately, please. No plans immediate. But certainly, it is an open area and whenever time permits and the finances permit, the business opportunities are there, we will certainly like to do it, but there are no immediate plans.
Sure, sir. And the last question is, you mentioned that the debt, which was as of March 31, 2021, has already declined by INR 2,000 crores. Is that what you've said, sir?
Yes, yes.
The next question is from the line of Avadhoot Sabnis from [indiscernible] Capital.
Yes, just one question. The last few years, the NRL dividend payout has been closer to 80%. Any thoughts on what is it going to be going forward?
Like going forward, Avadhoot, NRL because they have to invest in the expansion project. So certainly, it will not be that high. Last year, it was exceptionally high. But so far, they were distributing high dividends because there were no major CapEx involved. But now since the CapEx is there, so dividend distribution certainly will come down. But they are also guided by the government guidelines on dividend distribution. So certain minimum dividend, they will have to pay. So that depends on how much investments each year is coming up and how much profitability, accordingly, it will be decided. But minimum 30% of the profit is what is they are supposed to pay minimum.
Ladies and gentlemen, as this was the last question for today, I would now like to hand the conference over to Mr. Varatharajan Sivasankaran for closing comments.
Yes. Sir, I had one last question, of course. We seem to be getting once in a while this news in the media talking about the government considering taking away some of the oil fields from ONGC and Oil India, and probably auctioning it. So is there something which is afoot at this point in time, should we be concerned?
I think this question Director Exploration Mr. -- Dr. Chandrasekaran...
Sorry, it's not very clear. I'm sorry, could you please repeat?
Yes...
It's about the divestment or taking over of oilfields -- nomination fields by the government and giving to other parties. That's news what...
See, I don't think we can make a comment on this. See, this is what is being -- this was also told about by Honorable Chief Minister of Assam. So I don't think we can make any comment on this. But what we can definitely tell is, yes, if they are handed over, we would definitely like to -- I mean, because of our presence here for ages, we can handle it. That's not an issue, but we don't think we can make a comment on this. Thank you.
Not a problem. Thanks a lot all the participants and thanks a lot management for a very productive and very instructive session. Have a nice day.
Thank you.
Thank you, ladies and gentlemen. On behalf of Oil management, my sincere thanks to you and Antique Broking for organizing this call. Thank you so much. I hope we have handled all the queries of the people. In case something is still remaining, they can approach us. We will give the responses through e-mail or other ways also.
Thanks, Harish-ji.
Thank you. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.