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Oil and Natural Gas Corporation Ltd
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Good morning, everyone. I'm Harpreet Kapoor, the moderator of this call. Thank you for standing by and welcome to [ First Quarter ] (sic) [ Second Quarter ] FY '22 Earnings Conference Call of ONGC Limited. Today, we have with us Mr. Subhash Kumar, CMD, ONGC; and Mr. Pankaj Kumar, Director Offshore. Instructions for Q&A session will be followed soon.I would like to now hand over the proceedings to Mr. Subhash Kumar, CMD ONGC. Over to you, sir.
Yes. Good morning, everybody. I am Subhash Kumar, CMD ONGC. And on behalf of ONGC, I welcome you all in this ONGC Earnings Call for Quarter 2 and H1 FY '22. Thank you all for joining us on the call. I'm joined here by my colleagues Mr. Pankaj Kumar, Director Offshore; Mr. Vivek Tongaonkar, CFO; Mr. Anupam Agarwal, Chief Corporate, Finance; Mr. Vinod Hallan, CFO OVL is unable to attend; Mr. Rajarshi Gupta, Chief Corporate Planning and Strategy; Mr. Rajeev Kumar, Chief Corporate Accounts and Financial Reporting, actually who puts in all the efforts -- whose group puts in all the efforts to deliver, whatever we are discussing today. Mr. Atul Chaturvedi, Chief Commercial and Treasury; Mr. Sanjay Bharti, again from Corporate Accounts; Mr. Nirmal Kumar, my colleague from ONGC Videsh; Mr. Chandra Shekhar from ONGC Videsh Limited; and Mr. Prakash Joshi from Investor Relations; Mr. D.K. Agarwal from Director Finance Office is also there.ONGC has compiled its financial results for the quarter and half-year ended 30th September 2021, which have been reviewed by the statutory auditors. The financial results have already been released yesterday through a press note and sent to the stock exchanges. These have also been sent to analysts, who are there on our mailing list. Here's a brief synopsis of the results. The company has earned a net profit that is profit after tax of INR 18,348 crore during the second quarter of FY '22, as against INR 2,758 crore, restated during the second quarter of FY '21, an increase of INR 15,590 crore, which in terms of percentage, translates to 565%.Profit after tax for H1 FY '22 has increased by INR 19,428 crore. That's again an increase of 597% from the restated profit after tax of INR 3,254 crore in H1 of previous fiscal to INR 22,682 crore in H1 of this fiscal. The increase in net profit during the current quarter and H1 '22, is on account of higher sales revenue, mainly due to higher crude and VAT price realizations; higher other income, that is dividend; and opting for lower tax regime, under section 115 VAA of Income Tax Act 1961, which had been partly offset due to lower natural gas prices.The sales revenue for Q2 FY '22 has increased by INR 7,416 crores. That's an increase of 44% and is at INR 24,262 crore as against INR 16,846 crore in the corresponding quarter of the previous year. The sales revenue in the current quarter has increased, mainly on account of higher sales revenue from crude oil by INR 7,644 crore and value-added products by INR 1,031 crore, which is partly offset by lower sales revenue from natural gas by INR 665 crore and increase in Government of India share of profit petroleum by INR 594 crore, mainly in RJ-ON-90/1 by INR 484 crore.Similarly, sales revenue in H1 FY '22 has also increased by INR 17,437 crore. In percentage terms, this transfers to around 59% from a figure of INR 29,781 crore in H1 of previous fiscal to INR 47,218 crore in H1 of FY '22. The sales revenue in H1 FY '22 has increased, mainly on account of increased sales revenue from crude oil by INR 70,656 crore; increased sales revenue from value-added products by INR 2,295 crore, which is partly offset by lower sales revenue from natural gas by INR 1,291 crore and increase in GOI share of profit petroleum by INR 1,223 crore, mainly in RJ-ON-90/1 and Ravva by INR 975 crore and [ INR 1,043 crore ], respectively.The billing net of VAT and CST per crude during the second quarter of current fiscal was at $69.36 per barrel as against $41.38 per barrel in the same period of last fiscal. That's an increase of $27.98. And in percentage terms, it translates to 68%. The exchange rate of rupee versus dollar stood at INR 74.09 vis-a-vis INR 74.39 in second quarter of FY '21. So there has been some variation, but minimal one. Thus, realization of crude in the rupee terms stood at INR 5,139 per barrel in Q2 of FY '22 vis-a-vis INR 3,078 per barrel in Q2 of FY '21, which amounted to an increase of INR 2,061 per barrel. And in percentage terms, this translates to roughly the same as in dollar terms, around 67%.Similarly, gross billing for crude during the first half of the current fiscal was at $67.45 per barrel, as against $35.05 per barrel in the same period of last year. That's an increase of $32.04 per barrel, which in percentage terms is around 92.4%. The exchange rate of rupee versus dollar stood at INR 73.92 versus INR 75.07 in the first half of FY '21. Thus, realization for crude in rupee terms stood at INR 4,986 per barrel in H1 of this fiscal versus INR 2,631 per barrel in H1 of previous fiscal, which amounted to an increase of around 89.5% in INR terms.During Q2 FY '22, the statutory levy stood at INR 6,117 crore as compared to INR 3,936 crore in Q2 of FY '21. That's an increase of INR 2,181 crore and this in percentage terms is 55.4%. The increase in royalty on crude was up INR 973 crore and cess by INR 1,236 crore is mainly attributable to increase in average selling price of crude from INR 22,988 per MT in Q2 of previous fiscal to INR 38,608 per MT in Q2 of this fiscal.Similarly, there has been an increase in royalty on natural gas by INR 32 crore on account of decrease in average selling price of natural gas from INR 7,273 per thousand cubic meters in Q2 of previous fiscal to INR 6,225 per thousand cubic meter in Q2 of this fiscal. Similarly, statutory levies have also increased by INR 5,169 crore. That's an increase of 75% from INR 6,917 crore in H1 of previous fiscal to INR 12,086 crore in H1 of this fiscal. The increase in royalty on crude by INR 2,459 crore and cess by INR 2,856 crore, is mainly attributable to increase in average selling price of crude oil from INR 19,650 per MT in H1 of FY '21 to INR 37,419 per MT in H1 of FY '22.Similarly, there has been a decrease in royalty on natural gas by INR 67 crore, on account of decrease in price of natural gas from INR 7,255 per thousand cubic meter in H1 of FY '21 to INR 6,095 per thousand cubic meter in H1 of FY '22. The operating expenditure has increased by INR 497 crore. That's an increase of 11% from INR 4,528 crore in Q2 of FY '21 to INR 5,025 crore in Q2 of FY '22. The increase in Q2 FY '22 is mainly on account of increase in consumption of material that is INR 248 crore, mainly at Dahej plant by INR 214 crore, on account of increase in prices of spot LNG; water injection by INR 64 crore mainly at Mumbai offshore, due to increase in activities; repair and maintenance, INR 43 crore; transport of products by INR 61 crore at -- again at Mumbai offshore; and staff expenditure by INR 82 crore. This increase in operating expenditure has been partly offset by a decrease in other expenses by INR 98 crore, mainly on booking of fair value of loss on investment in ONPL by INR 95 crore in Q2 of previous fiscal.Similarly, the operating expenditure in H1 FY '22 has also increased by INR 1,138 crore. That's an increase of 13% from INR 8,685 crore in H1 of previous fiscal to INR 9,823 crore in H1 of this fiscal. The increase is mainly on account of increase in consumption of material, which is the largest portion of it, and attributable to mainly at Dahej plant by INR 561 crore, out of a total increase of INR 582 crores in the consumption of materials; on account of increase in prices of spot LNG, water injection INR 75 crores, mainly invest in onshore and offshore, due to increase in activities, contractual payment INR 119 crores and staff expenditure by INR 313 crores. This increase in operating expenditure has been partly offset by decrease in other production expenses by INR 89 crores, mainly at Mumbai offshore.There is a decrease of INR 748 crore that's around 52% in exploration costs written off, survey and unsuccessful well costs in Q2 of FY '22, that's INR 1,446 crores in Q2 of FY '21, has come down to INR 698 crores in Q2 of FY '22. Similarly, during H1 of FY '22, there is also decrease in exploration costs written off, survey and unsuccessful well costs, by INR 723 crore. That's a decrease of 28.1% from INR 2,573 crore in H1 of FY '21 to INR 1,850 crore in H1 of this fiscal. The finance cost has increased marginally by INR 142 crore from INR 437 crore to INR 579 crore in Q2 of FY '22. Similarly, in finance, finance cost has increased by INR 150 crore from INR 1,048 crore in H1 of in -- from INR 1,048 crore in H1 of previous fiscal to INR 1,198 crore in H1 of FY '22. This increase is mainly on account of increase in interest payable due to increase in outstanding NCDs.DD&I cost for Q2 of this fiscal stood at INR 3,943 crore, as against INR 3,679 crore in Q2 of previous fiscal. This is an increase of INR 264 crore, and in percentage terms, this works out to 7.2%. The increase in Q2 FY '22 is mainly attributable to increase in depreciation by INR 69 crores mainly at Mumbai offshore by INR 49 crore due to increase in number of higher IMR vessels and RJ-ON-90/1 by INR 24 crore and impairment reversal of INR 213 crore during Q2 FY '21 on account of write-offs of few wells in frontier basin during Q2 of FY '21.Similarly, there is also an increase of INR 606 crore. That's in percentage term 8.1% in DD&I cost during H1 of FY '22 from INR 7,502 crore in the H1 of previous fiscal to INR 8,108 crore in H1 of this fiscal. The increase in H1 FY '22 is mainly attributable to increase in depletion by INR 151 crore mainly at Assam asset due to downward revision of PDR, that's Proved Developed Reserves; depreciation by INR 124 crore mainly at Mumbai offshore; and INR 124 crores, again due to increase in number of hired IMR vessels; and impairment by INR 331 crore. INR 130 crore impairment charge during H1 FY '22, mainly at Nagayalanka block, which is INR 72 crore.There is an increase in exchange loss by INR 417 crore, from an exchange gain of INR 412 crore in Q2 of FY '21 to exchange loss of INR 5 crore in Q2 of FY '22. Similarly, there is an increase in exchange loss by INR 508 crore from an exchange gain of INR 418 crore in H1 of FY '21, to exchange loss of INR 90 crore in H1 of FY '22.During the quarter, company has decided to opt for lower tax regime, under Section 115-BAA of Income Tax Act 1961 with effect from FY 2021. Accordingly, the company has recognized a provision for tax expenses and remeasured its net deferred tax liabilities. The negative impact due to availing of option has resulted in decrease in deferred tax by INR 8,541 crore and decrease in current tax by INR 1,304 crore. The company, at consolidated level, has earned a net profit of -- that is profit after tax of INR 18,749 crore during the second quarter of FY '22, as against INR 5,675 crore, during second quarter of FY '21. That's an increase of INR 13,074 crore and in percentage terms, this works out to around 230% or so.The increase can be mainly attributable to ONGC, our subsidiary OVL and JV OPaL. Similarly, the company at consolidated level has earned net profit after tax of INR 25,596 crores during H1 of this fiscal, as against INR 6,760 crore during H1 of FY '21, an increase of INR 18,836 crore. And in percentage term, this is around 279%. The increase can be mainly attributable to ONGC, our subsidiary OVL and again there is some contribution by JV OPaL.Well, friends, with this I finish my briefing of the second quarter results of financial year '21-'22. We'll be very happy to take questions from you. We would request you to restrict your queries on financial results only. Thank you. Thank you very much. Look forward to hearing from you.
[Operator Instructions] First question of the day we have from Dhoot Sabnis from InCred Capital.
Yes. This is Avadhoot Sabnis. So my question first relates to gas pricing. Sir, the current formula for gas pricing that we have for the APM gas, if we look at the formula and if you look at the global prices that are prevailing in the current sort of calendar year, it is very obvious, there is going to be massive spurt when the next change is due, which is from 1st of April. My question is that, are you aware of any move by the government, okay, which will result in that sort of massive price hike in gas not happening. I.e., is the government considering any change in formula, any gap or stuff like that, if you could comment on that, please?
Mr. Sabnis, is that the only question you are having for the day?
The second question, sir, relates to -- if you can give us any update on the productions on the KG block? Specifically any timing on when these -- when you will put out a tender for the fresh gas supply? That's it. These are the 2 questions, sir.
Okay. So I think let me take the first question, now and second, probably will reemerge with the certain variants over the discussion, so that will be addressed in greater detail later. So as far as, gas pricing is concerned and gas pricing formula is concerned, that has been subject of deliberation and discussions and debate at different forum. Right now, we have a formula, which is prevailing, and there is no reason to believe -- I mean we got ultra-low prices also at certain point in time, which is this quarter actually happened to be the -- of this 6 months, previous 6 months, which we just completed were the lowest ever. And neither we have heard of anything, nor we believe that there is going to be any tinkering with it.But as far as ONGC is concerned, our long-term view and vision remains that at the end of the day, there has to be a free pricing as far as gas is concerned. So one is what we wish to look at. Another is as far as formula is concerned, there definitely -- there is -- we are not aware of anything, and we don't think it will be anything to artificially lower the prices, in case the prices emerging out of a formula are lower than that. Unless that happens to probably align it with the prevailing market prices. That's how I look at it. But I stay short. My precise answer would be, today we have a formula. We have no information or reason to believe that it will be in any way tinkered with to bring the prices lower.
Next is [ Bharat Ranjan ] from [ Antique Broking ] .
Am I audible sir?
Yes, you are audible.
So my question is, once again about this APM gas price increase. Your -- you have a significant increase from [indiscernible]. So does this change any kind of economics in terms of the existing reserves, or any other reserve which can be put to additional production?
We are not getting you very clearly. If you can be a little louder and maybe a bit slower.
Yes. So with the increase in the APM gas prices, do you expect like now, production to rise? Or are you going to put any additional resources to increase production?
Yes. So I think as far as production is concerned, we have projects coming up and I think we will be discussing about our major project KG-98/2 later. Unfortunately, there is delay in production from that project, and we are trying to reassess the timelines. Unfortunately, in some of the countries where from -- the major pieces of equipment for the projects, are being sourced are still not out of COVID fully. And supply chains remain disrupted. We have tried to ensure that our people and teams are able to fly in. We have been partly successful and believe that in coming days, our teams will be in the respective places. But as of date, definite -- to be able to give definitive timeline, it is very difficult.
So that is anyway free priced gas. So I'm referring more to the APM priced gas. Is there any scope for you to push production up, given the fact that the prices will be consistently higher?
On gas plant, let me be a little clearer. Unfortunately, Tauktae has affected our operations significantly. In fact, while one would believe that it has affected offshore which is a very obvious thing. It has in fact also affected our -- some of the onshore projects. Yes. So I think we do anticipate certain under achievement in -- as far as gas is concerned this year.
Fair point, sir. Secondly, I was looking at OVL OpEx, over the last 4, 5 quarters, we have seen a significant increase, only a question of new acquisitions going on production? Is that the only factor or is there any other structural factors?
Just a minute. Okay. So the increase in OpEx at OVL level is because of this certain standby cost paid at Mozambique. As you may be aware that in Mozambique, right now there is a force majeure condition going on and consequently instead of capitalizing those costs, which are the standby charges, they have been expensed. So that is the reason for the increase in OpEx.
Next is Mayank Maheshwari from Morgan Stanley.
Two questions from my end. First one, I think you were earlier referring to this in terms of production delays. Can you just give a bit more granular outlook in terms of when you expect to go back to pre-COVID levels of production, especially on oil across OVL and ONGC domestic?
Okay. So I think as far as -- let me take both of them. So we have -- on oil front, we have got lesser than anticipated production at WO 16 where there is a delay in mobilization of MOPU, Sagar Samrat, which was anticipated to be commissioned by now, but is getting delayed because of some of the operational problems as well as because of the COVID. Then, there is less than anticipated production from Cluster 8 fields due to delay in installation of wellhead platforms, again part of which, at least, predominantly due to COVID impact.Tauktae has definitely affected our offshore and onshore production also. I mean, normally one would remember that it affected offshore only, but the western onshore production also has been affected because of Tauktae. Then Ratna and R-Series, you know SQS package at R-3 -- R-13 A Well, we could not install in time, there was a delay. So that has resulted in some production loss, and there have been certain unplanned power shutdowns and electrical faults caused by heavy monsoons in some of the onshore assets, which have resulted in overall. This is the story on crude oil front.As far as natural gas is concerned, number one, there is a little bit of -- let's say underperformance at the level of Vashishta and S-1 wells in Eastern offshore and that is due to certain reservoir-related issues. Then WO 16 Cluster, due to delay in -- again in Sagar Samrat because oil and gas need to be produced together. Our major impact this year or maybe next year also will be on account of delays being experienced in KG-98/2 and our inability to precisely give the timelines by which we will be able to install and have the production from that. Loss in gas production due to Tauktae in Western offshore is another -- in fact that's the major impact of gas, has been significantly affected by Tauktae. And there is also an issue relating to offtake. And if you really remember in the second wave, we had lot of problem in offtake. And in addition, at 2 specific assets at Tripura and Rajahmundry, we have -- we continue to have or we had the problems relating to offtake at different points in time.Dahej and Gandhar field is a case of less than anticipated production, and then also the natural decline in production in Mandapeta, Pasalapudi and Yendamuru fields in Rajahmundry and Tapti-Daman block. So this is the detailed listing of what has resulted is -- performance.
I think this is pretty detailed. In fact, when you are now looking forward, sir, like how much of these issues that you kind of listed now?
Let me also -- let me -- okay, so as -- kind of current estimation, where we will probably it will be useful for all to have, where we could end up being in terms of year-end numbers. So if you really look at 2021 actuals was 22.53% as far as oil is concerned and our anticipation for this year was 22.97%. We will end up probably around 22% plus 2 percentage, 3 percentage, so around 2 percentage points. So we will be close to the actuals of last year, maybe a shade lower than that, but definitely lower than BE '21-'22. So that is the oil front. As far as gas -- sorry, OVL is concerned, OVL had actuals 8.51 last year, they had anticipated also 8.51, but they could end up being somewhere close to 8.31. So on -- between ONGC and OVL, there could be a hit of anything between 0.6 to 1 MMT.As far as gas is concerned, gas actual was 22.10%, that's standalone. And actually on -- and we had anticipated this year a substantial jump. We had anticipated to go to 25%, but we believe that we will be closer to the actuals of 2021, rather than being able to go beyond, and could be a percentage point lower than -- or 2 lower than the actuals of 2021, as far as this year is concerned.Now on a OVL level, again, gas is getting hit. It was 4.53, and we anticipate to be at around 4. So instead of actuals at a Group level of 27.35%, we anticipate to be around 3% lower at 26.5% or so. And so it will be definitely 3 BCM less than the budget. Next year, actually we are -- we will be catching up, and as far as oil is concerned, we hope to achieve 31.3 to 31.4, which is exactly equivalent to what we had for this year. However, as far as gas is concerned, gas will be -- we had a budget of 29.7 for this year, we would be close to 29 or so for the next year. So that's the story. So whatever was the BE for '21, '22, we intend to and hope to catch up by '21, '22.
Okay, sir. So that's basically about a year of delaying, because of all these COVID issues and logistics issues, what you're kind of highlighting to us?
Yes. So actually COVID issue, let me just deal with it. Actually, COVID issues are -- we have faced due to both dimensions we have faced. One is, of course, disruption in supply chain, more of international supply chain than local, but it is not that local supply chain was not affected. And secondly, in fact on gas front, especially, we were handicapped by the offtake also. So that has been the problem, because despite the fact that prices were low or ultra-low, fact of the matter is, certain industries and consumers simply stopped operating during these periods. And obviously, then whom to sell the gas, even if it is lowly priced.
Okay. And sir. I think just an extension to this question was like, if you can give us certain numbers on how much are you producing of 98/2 and when you're kind of giving us this guidance for 2020 -- fiscal '23, what are the assumptions on 98/2 that you're building in?
So I think as far as 98/2 is concerned, as I have told, we continue to be affected by the supply chain. In fact, over the last month or so, we have very intense deliberations at different levels and with all the key stakeholders, we have tried to assess with the -- very active interaction with the Indian embassies abroad to see wherever the operations can be resumed because operations in Singapore and let's say Malaysia stay affected, and affected very badly projects are not moving. As far as our current production from KG-98/2 cluster is concerned, there is close to around 0.65 MMSCMD from 2 wells, and production is likely to be ramped up to more than 1 MMSCMD. Additional production of 1.75 MMSCMD is expected from third well by December '21.So while -- and as far as rest of components are concerned, I am not in a position to give the definitive dates today and that's something which is being frozen. Luckily the movement restrictions seem to be getting eased. They are not lifted entirely. We were trying to depute our people and fly in our own teams also to different locations where the works are going on. We are in the process of obtaining approvals. But unfortunately, physically only few people have been able to fly in today -- only few visas are available. And especially for Malaysia and Singapore, we are working very closely with the embassies. So to give definitive time lines which have a real possibility of getting changed either way, it will not be appropriate on my part at this stage.
Fair, sir. Sir, my second question was more related to the entire point on decarbonization which the PM talked about in COP-26. So I just wanted to get a sense of how ONGC at the Group level is looking at decarbonization efforts, and is there something more concrete you can give us, compared to the last call?
Okay. So -- as far as ESG concerns -- on the whole are concerned, company is very mindful. In fact, if you really look at the -- our carbon footprint, we have done tremendous on the front of reducing it. And actually because of not being spoiled for plenty, our compulsions to avoid gas flaring were both from economic considerations, as well as because of our concerns for the environment, because ONGC was pioneer in terms of coming up with the gas flaring product -- reduction project, as far as Mumbai High is concerned. So which was both actually from economic consideration, as well as to reduce the carbon footprint.As far as -- there has been 12% cut in emissions, densities, since '15-'16. So that's what we have done and we are taking -- making substantial initiatives, we have taken up in terms of Global Methane Initiative. So this is an action-oriented initiative from United States Environmental Protection Agency, and we are working very closely with that. We have introduced dynamic gas blending technology in large diesel engines. We are -- we have introduced microturbine technology for power generation at remote locations of ONGC, and we are working very closely with IOCL for carbon capture utilization storage for CO2 sequestration.Now going beyond this, we are also mindful of emerging -- reporting requirements for integrated reporting. So both to address the issue relating to the whole set of issues. Actually, it is not only carbon. Carbon is only one part of it. We are addressing the whole issue in an organized manners. We are in process of appointing a consultant and are geared to address the issues, both from reporting and improvement perspective. And couple of internal workshop have already been held and consultants that are in place, and the team is working on the whole set of issues around it, not necessarily only the carbon intensity.
Next is Sabri Hazarika from Emkay Global.
Congratulations on good numbers too. I have 2 questions. Firstly, can you give a breakup of the dividend income in Q2?
Yes. You can give me a minute. So we had total dividend income of INR 2,677 crore, out of which INR 201 crore is from IOC, INR 39 crore from OPPC, INR 600 crore from OVL, INR 1,771 crore from HPCL, and Petronet LNG, INR 66 crores.
Okay, and nothing from Vankor, [indiscernible] for this?
Nothing from?
From Russia. Anything from Russia?
So Vankor is -- see, that is a subsidiary of ONGC Videsh. They receive it and pass it on to us.
Okay. Okay. Sorry. Got it. Got it, yes. And second question is, just any comments on this new flows coming around regarding majority stake in Mumbai High [indiscernible]? Some time back also...
That's not a question relating to accounts. [indiscernible] and let me also add in the same spirit, I don't think it's a question at all. Okay. I think you heard it clear -- loud and clear.
Got it. And all the best.
It's an out of syllabus question. Yes. Anything more?
Right sir. No, that's all.
Okay. Please have a nice day. In fact, actually, I'm mindful, that invariably we end up disturbing all of you on Saturday or Sunday. So we have been guilty of that. But unfortunately, we are a large group, where quite a few things need to happen before our team gets to work on the numbers. So that has been always a constraint.
So next we have Pinakin Parekh from JPMorgan.
Sir, I have 2 questions. My first question relates to OVL. Now quarter-on-quarter, EBITDA is broadly flat even though prices are higher. So is there the entire cost surge because of Mozambique, or are there some other factors? And going forward would this cost become the new normal at OVL, or should it reverse? And my second question is, sir, if we assume that global gas prices don't change from here till December end, what kind of prices do you expect in the new reset in April '21 versus the October reset of $2.79?
So I think first question first. As far as OVL is concerned, I think OVL is doing very well as far as some of its key projects are concerned. Of course Mozambique has been a setback, and we do anticipate -- if you really look at the developments in that part of the world again, we believe that outlook is improving and we will soon have actually improvement on that front. As far as cost structure is concerned, obviously this particular fiscal it has got -- or half year it has got affected from Mozambique. But I think that's not going to be the factor. Costs could also look high at OVL front, because production at some of the -- their international projects got constant OPEC and OPEC plus restrictions. So I don't believe it is a trend, which you can factor it for all times to come. But periodically, you will see some one or the other factor coming in, which could actually -- probably whatever is the natural behavior of cost, that you may find certain anomalies from that perspective. Once -- and OVL today is also looking for more opportunities. So OVL's outlook from that perspective are very good.Third thing, which I also would like to say that OVL at the end of the day enters a project on competitive terms. So when you enter a project, it enters with -- at a plus-minus, certain dollars to the prevailing price regime or prevailing long-term outlook. So it's never -- it does not have in the majority of the cases advantage which one takes normally. So there are 2 regimes actually. You take early risk and you end up having a large discovery, look at Vietnam for example. We went at a [ later ] stage and had everything to our credit. In other situation, you go to a project like -- which is mid-development or early development like Sakhalin. Now Sakhalin, we entered at a stage where risk/return profile had improved a little bit, but still the commerciality had not been declared, but it has been an enormous hit. On the contrary, there could be a project which is under development or under production. Obviously, you will get to enter, only at the price very near to the prevailing price or long-term outlook.So the risk profile is entirely different across these 3 sets of options and also the return accordingly is high. So the chances of failure are high and obviously if you are successful, you get to retain the large part of the pie. So it's a kind of a risk, and OVL has taken very judicious decisions in the past to balance the considerations and take an optimum position in all acquisitions. So -- but coming back to the cost, it is unlikely to be a new normal because Mozambique, I believe, will resume soon. It's too large an asset to stay in the conditions, like the one, prevailing today. And as and when that happens, you will see improvement.As far as global gas prices are concerned, obviously, I'll leave it for you people to guess because your number crunching is much better than ours. We can -- and there are few months which also are yet to expire before the final calculation can be made. But I'm sure your laptop in front of you will be giving a number, which is significantly higher than what we are getting from 1st October. It's a question of factor how many times higher, that's the only question.
Next is [ Soumya ] from Spark Capital.
Sir, my first question is with respect to the debt. At the consol level, can you give a breakup of the debt -- I mean, what is it at different subsidiaries?
Breakup of?
Debt at consol level?
Sure. Our consolidated debt on 30th of September is INR 109,000 crores, as opposed to INR 119 crores on 31/3, so there is a reduction of around INR 10,000 crore plus. Now reduction is largely at ONGC, which has come down from INR 15,023 crore to INR 7,897 crore. MRPL has come down by around INR 1,900 crores to INR 37,685 crore -- sorry OVL. MRPL is practically at the same level as last time, at INR 24,412 crore, and HPCL is again INR 1,600 crore less at INR 39,010 crore.
Thank you, sir, helpful. Sir, next question is with respect to your CapEx plans. Is there any rethinking about the CapEx plans because of this production outlook revision? And what is your plan for the SCF usage, given that the commodity prices are pretty favorable, and if your outlook is expected to improve substantially?
Plan for?
The free cash flow usage.
Okay. So I think a couple of things. One is that, as far as our level of activities for next year are more or less frozen, so they stay at current level, and there will be -- you will see only marginal -- just a minute. So I think as far as CapEx is concerned, we are trying to ramp up activity as you would have heard, and we will, however, in terms of expenditure, remain very close to what we have been doing each year. So we would be in the range of around INR 29,000 crores to INR 32,000 crores. That's the likely CapEx, and it is unlikely to increase considerably even in the immediately following fiscal.And your second question was? So I think that as far as cash flows is concerned, we would have, certain unfinished part of agenda at OPaL level also, as we have shared in the past, that we have the intention to infuse funds. We are awaiting certain approvals and we are a good dividend payer also, if we have improved ability to pay, we pay, and that you will have seen, along with the declaration for this, which incidentally I received no question. And -- but on an overall basis, the company and the management has a vision to grow in a truly integrated world-class company. So whatever it takes to make that happen will be done.
Thank you. So just one follow-up there. The point you mentioned about OPaL infusion, so what could be the rough quantum there, sir?
Quantum could be -- not really large, it could be around INR 5,000 crores to INR 6,000 crores.
5 to sorry...
INR 5,000 crores to INR 6,000 crores.
Sir, shall we go ahead and take one last question?
Yes, yes. Please. Last one.
The last question of the day we have from Rajiv Agrawal from Sterling Capital.
Thank you for the opportunity and good set of numbers. Sir, could you tell me, what is the status of the Iranian field under OVL? Hello?
Just a minute. So there have been some positive developments. I'll request my colleague to give you specifics. Just a minute. Bear with me. So actually, now they are considering development of the project through a domestic -- I mean, this is from the press also you would have read, that they are now considering development through -- NIUSC has signed an agreement with a domestic company, PetroPars. And as far as we are concerned, we have the possibility of taking some stake. And as far as development contracts, et cetera, is concerned, we are in process of looking at it, as and when it -- so it's a question of due diligence of -- is going on. But we believe that whatever number one, we have spent in the past, we will definitely get to reimbursement for that. And beyond that, we would have some share. What are going to be the terms and conditions and specific exposure on account of that, that's something very early -- too early to predict at this stage.
So how much we have invested in that field?
$95 million for 100% and our PI is 40%.
Okay, sir. Okay. That's very helpful.
Okay.
So with this, I would like to now hand over the floor back to Mr. Subhash Kumar for his final remarks. Over to you, sir.
So thanks a lot to all. And sorry for bothering you on a Saturday again. But I think I have told the reason for that, invariably it stands up being the case that we have to compile the accounts after I think from so many entities and we end up choosing this day. Also, it's a little freer for us to take time off and talk with you people. Great talking to you. We value your participation and inputs in this call as well as -- as and when you follow up individually also. Our Investor Relations cell, just to reiterate, is ever-ready and very anxious to receive your calls, and they will be happy to provide any additional information which you may require, that you might not have got opportunity to -- [ list at this moment ]. So thank you all very much.
Thank you so much, sir.
And special thanks to Harpreet, again for organizing all this. Thank you very much.
Thank you, sir. Thank you. My pleasure. I would like to thank all the investors who joined the call. That does conclude our conference call for today. You may all disconnect now. Thank you. Have a pleasant day.