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Oil and Natural Gas Corporation Ltd
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Very good morning, ladies and gentlemen. I am Ela, the moderator for this call. Thank you for standing by, and welcome in today's session for third quarter financial year 2019 earnings conference call. [Operator Instructions] I would like now to hand over the conference to Mr. Subhash Kumar, Director of Finance, ONGC. Over to you, Mr. Kumar.
Hello, good morning, ladies and gentlemen. I'm Subhash Kumar, Director of Finance of ONGC. And on behalf of ONGC, I welcome you all in this ONGC Earnings Call for Third Quarter FY '19. Thanks for joining us on the call. I'm joined here in this room by my colleagues, Mr. A.K. Bansal, ED, Chief Corporate Finance, whom all of you know; Mr. Saklecha, Head Corporate Accounts; Mr. Pankaj Kumar, the GM Chief Corporate Planning -- GM; and Mr. Prakash Joshi, from Investor Relations. I have also in room my colleagues from ONGC Videsh, Mr. Sarkar, Mr. Atul Chaturvedi and Mr. Nirmal Kumar. ONGC has compiled its financial results for the quarter ended 31st of December 2018, which had been reviewed by the statutory auditors. The financial results have already been released on yesterday through a press note and sent to their stock exchanges. This has also been sent to the analysts who are there on our mailing list. Let me give you a brief synopsis of the results. The company has earned a net profit that is profit after tax of INR 8,263 crores during the third quarter FY '19 as against INR 5,015 crores during the third quarter of FY '18, and this translates into an increase of 65% approximately that is INR 3,248 crores. Similarly, the profit after tax for 9-month period for this fiscal has also increased by INR 8,641 crores that is by 60 -- roughly 62%. The profit after tax of INR 14,030 crores in 9 months of previous fiscal to INR 22,671 crores in 9 months of this fiscal. ONGC board has approved interim dividend of 105% that is INR 5.25 on each equity share of -- and as such the total payout will amount to -- INR 1,300 -- amount to INR 6,605 crores, excluding dividend distribution tax. The increase in the net profit during Q3 of this fiscal versus the same period of last fiscal is on account of increase in sales revenue by INR 4,690 crores. Similarly, the increase in PAT in 9-month period is also due to increase in sales revenue by INR 21,942 crores. The sales revenue for Q3 FY '19 has increased by INR 4,690 crores as I shared just now, which translates into an increase of 20.5% at INR 27,609 crores as against INR 22,919 crores in the corresponding quarter of previous year. The sales revenue in Q3 has increased mainly on account of increased sales revenue from crude oil by INR 2,712 crores, increased sales revenue from natural gas by INR 1,570 crores and increased sales revenue from value-added products by INR 429 crores. Similarly, sales revenue in 9-month period has increased by INR 21,942 crores, which is an increase of 36.2% from INR 60,695 crores in 9-month period of previous fiscal to INR 82,637 crores in 9 months of this fiscal. The sales revenue in 9-month FY '18 has also increased mainly on account of increased sales revenue from crude oil by INR 16,466 crores, increased revenue -- increased sales revenue from natural gas by INR 3,474 crores and increased sales revenue from value-added products by INR 2,321 crores. The gross billing net of VAT and CST for crude during the first quarter of current fiscal was at USD 66.38 per barrel against USD 58.42 per barrel in the same period of the last year. This translates into a dollar increase of around USD 8 per barrel and in percentage terms around 14%. The exchange rate of rupee versus dollar stood at INR 72.11 versus INR 64.74 in the third quarter of FY '18. Thus, realization of crude oil in rupee terms stood at INR 4,786 per barrel in Q3 FY '19 versus INR 3,782 in Q3 '18, which amounted to an increase of 26.5% in INR terms. Similarly, gross billing for crude during the 9-month period of current fiscal was at $70.29 per barrel as against $52.09 per barrel in the same period of last year, that is an increase of around 35%. The exchange rate of rupee versus dollar stood at INR 69.68 versus INR 64.49 during the 9-month period of FY '19. Thus, a realization for the crude in rupee terms stood at INR 4,898 per barrel in 9 months of this fiscal versus INR 3,359 per barrel in 9 months of previous year, which amounted to an increase of 45.8% in INR terms. The amount of profit petroleum has also correspondingly increased by INR 81 crores from INR 535 crores in Q3 '18 to INR 616 crores in Q3 '19. Similarly, the amount of profit petroleum has increased by INR 451 crores from INR 1,551 crores in 9-month FY '18 to INR 2,002 crores in 9 months of this fiscal. The increase is mainly at Rajasthan, RJ-ON-90/1 by INR 309 crores and CB/OS-2 at INR 279 crores, which has been partially offset by decrease at Panna-Mukta -- PMT JV to the extent of INR 182 crores. The operating expenditure has increased by INR 665 crores, which actually amounts to an increase in percentage terms of 13% from INR 5,150 crores to INR 5,815 crores in Q3 of this fiscal. This increase in this fiscal is mainly on account of increase in consumption of material, which is mainly attributable to spot LNG purchase price and increased quantity at Dahej plant. So actually, if you know, we are purchasing the LNG directly and providing the feedstock to OPaL. So this impact is adding to the better capacity utilization at the well level. Other factors are repair and maintenance INR 188 crores, contractual payment was up to -- has continuity towards this increase by INR 111 crores, which were offset by decrease in work-over operations to the extent of INR 138 crores. Similarly, the operating expenditure in 9-month FY '19 has also increased by INR 1,787 crores, which is an increase of 13%. This increase is mainly on account of increase in staff expenditure, INR 168 crores; consumption of material, which again has something to do with the LNG, which I discussed earlier, consumption of material increased by INR 805 crores; transport expenses INR 107 crores; repair and maintenance INR 308 crores, which were offset by decrease in work-over expenses by INR 210 crores. There is an increase of INR 1,068 crores that is 66.5% in exploration cost, written off in Q3 FY '19 from INR 1,606 crores in Q3 FY '18 to INR 2,674 crores in Q3 of this fiscal. Similarly, during 9 months of FY '19, there is an increase in exploration cost written off by INR 1,136 crores that is from INR 3,996 crores in 9-month FY '18 to INR 5,132 crores in 9 months of FY '19. Muted wells charged as dry during Q3 FY '19 and Q3 -- 9-month FY '19 were at KG offshore, Mumbai offshore and Assam-Arakan Basin.DD&I cost for Q3 FY '19 stood at INR 3,477 crores as against INR 4,256 crores in Q3 FY '18. That's a decrease of INR 779 crores, which translates to around 18.3%. Similarly, there is also a decrease of INR 330 crores, that's around 3% in DD&I cost during 9-month FY '19 from INR 11,225 crores in 9-month FY '18 to INR 10,895 crores in 9-month FY '19. The decrease in 9 months of this fiscal is attributable to decrease in depletion by INR 357 crores and impairment by INR 143 crores, which is partially set out by increase in depreciation by INR 160 crores. During the third quarter of this fiscal, the statutory leverage stood at INR 5,974 crores as compared to INR 5,344 crores in Q3 of last fiscal, that's an increase of INR 630 crores. Similarly, the statutory leverage have also increased by INR 4,978 crores that's around 35% from INR 14,334 crores in 9-month '18 to INR 19,312 crores in 9-month '19. This decrease is on account of -- the increase is on account of increased weighted revenue of crude oil. Well friends, with this, I finish my briefing of third quarter results for the financial year 2018/ '19. We will be happy to take any questions from you. [Operator Instructions] Thank you very much, and now the floor is open for questions.
[Operator Instructions] So we have our first question from Probal Sen from IDFC Securities.
I have 3 questions. One, you had mentioned I think last quarter that there was some delay with respect to work on the WO-16 field because of which oil production has been a little bit more muted. And I think what was mentioned was that there would be a new unit that would be setting course for India in February from the Middle East. So just wanted to get an update in terms of whether we're still on track to get production increase from there from Q1 FY '20? And the second question I had was with respect to any update you can give us on progress on the KG asset? And thirdly, you mentioned the healthier utilization at OPaL due to higher LNG being placed. If we can get a little bit more details in terms of what the utilization is and what sort of EBITDA breakeven you are looking at for OPaL? That will be helpful.
So I think on WO-16, I'll request my colleague to [indiscernible] Pankaj.
I'm Pankaj here. Rightly said, during last discussion, we were expecting oil to be increased from WO-16. And we do so even now. And we are sure from Q1 next year, we would be seeing an increase from WO-16 area. The unit which you're talking about, the new unit, basically it is under refurbishment at Abu Dhabi yard and now expected to sail out from there very shortly. And almost, say 15 to 20 days sailing time then some 15, 20 days commissioning time in offshore. So somewhere close to end April, we should see the increase in oil production from that area.
Can we get a sense of the numbers then from the WO-16, what's the incremental output we are looking at?
Around 10,000 to 12,000 barrels of oil per day.
Okay, right. And sir, update on the KG field project?
Yes, this particular -- the asset is -- I mean, this particular field is on stream and anticipated first gas at end of this fiscal and end March 2021. So that's still the target. And your third question was on OPaL, yes?
Yes.
So OPaL, actually there is a corresponding increase. Feedstock has increased a little bit, a corresponding increase in capacity utilization during the last 6 quarters or so. It has hovered around anywhere between 75% to 87% or so on certain days. So on an average, during the last, let's say, month or so, it was around that level. That [indiscernible] but I think, for the 9 months though I don't have specifics figure there. I think it was anywhere between 64% to 65%. So it's ramping up. The work on pipeline, et cetera, is also going well though it's not complete as yet.
Sir, any financial numbers you can share with us?
So at current, we have not compared with quarterly accounts as of now. So numbers are not available.
Sir, last question, if I may. Any change in terms of any update on FY '19 and FY '20 oil and gas production guidance?
So I think you will have noticed as far as gas is concerned, we are on track to achieve whatever we have suggested. On oil front, we did have a success during the year. And we are less compared to what we had anticipated there on 4% to 5%. But all efforts are being made including what was discussed about WO-16 to catch up. And hopefully, we will be closer to the target we have set for the 2019/'20. So -- which was -- actually the target was 22.74% -- 2.74 million metric tons.
Sorry, sir, this was for FY '20 or FY '19?
'19/'20.
FY '20.
Okay. So FY '20 oil target is 22.7 million tons, right?
Yes, that's right.
And for gas, sir?
For gas, it is actually 27.36. So you can take it 27.
27. And sir, this is stand-alone, right?
Yes, stand-alone. So if taken together actually for oil, this is 25.7 -- 25.67 and for gas, it is 23 -- 28.3.
28.3.
So we have our next question from Gagan Dixit from Elara Capital.
Sir, I have just a query about that I see your gas production has increased 7% Y-o-Y basis, so will you just give the details that which fields have contributed and how much to that production growth? And for your next year guidance where you expect that production is coming in if you can give some detail about which fields are contributing? And also, what's your production cost from this new field?
About the quantities you asked, where from we got this increase in gas. See, increase for gas, the interior South and Western offshore, Mumbai offshore we call it jointly the whole area, put together and from Eastern offshore as well. If you recall in the previous meetings, we were telling that S1 Vashista will be ramped up after commissioning of gear line, which has been done. From East Coast, we are producing to the tune of 4 million per day now. From West Coast, Daman has come on screen. We have completed almost 18 drills in Daman and quite significant amount of gas is coming from there. Further drilling is on in Daman, which will add up to the gas. And we see -- day-to-day gas production we see is around 70 million per day now. And we expect couple of more wells to be completed by the year-end should add almost 0.5 million more. Then in next year, again, further drilling is planned in Daman. And our next year gas production will be, again I would say on a Y-o-Y basis, it should be more by around 5% or 6%. Because this year, there has been ramp-up in production. We started in April, which was below 60 million per day and now we are almost 70 million per day. And next year, our start will be from around 70 million per day and with some addition. So Y-on-Y basis, should be again 6% to 7% of oil and 6% increase in gas production next year as well.
And sir, this quarter-to-quarter, there is a 3 MMSCMD production increase. So it's just because of Daman or some new field you tie up something?
See, it's because of Daman, it's because of East Coast, it's because of increased production from Rajahmundry and Tripura all. So it's a bit of onshore and majority in offshore.
And sir, what's the cost from these -- or whatever that field, also from the KG, if you have some idea about the operating cost?
So cost numbers, we have not analyzed on immediate basis. But you can imagine that actually, the costs during this period are slightly less -- on lower side or about the same as the last period, they are not significantly high.
Our next question is from Avadhoot from CGS-CIMB.
Sir, my question is related to the level of exploration write-offs, drivers write-offs, which was quite high in this typical quarter. And frankly, how do you get to this because obviously, the standard response is that it varies from quarter-to-quarter and impossible to predict. But if you look at this number for last 4 quarters, it's at the level of around INR 6,700 crores. Now I wanted to basically -- this compares to I believe with exploration budget of closer to INR 8,000 crores to INR 9,000 crores. I want to view how does management look at this level of exploration write-off? Is this level normal part of doing business? Or is there more to add -- you could add on this particular point?
There's a couple of comments. Actually, see, a lot of due diligence goes into analysis of our exploration treaty. So as the each quarter, and especially at the year-end a very detailed analysis goes into what needs to continue to stay on the books. So while there is no specific -- I mean, no specific trend can be given, the current order may continue for some time. That is what one can say. See -- and also quarter-to-quarter jumps at times happens that you take view on a specific area. What happens is there is an area and there are a couple of wells in this area, you take a view on them. And all of a sudden then there could be either quantum increase or the amount could be materially lower than the previous quarter. So those are -- while there is -- so the summary comment is, at a generic level no trend can be given, but this kind of numbers, as is the previous fiscal could be taken as a norm, increase as in the current year could be a kind of a blip, which may continue for some time, but it may not be kind of trend to continue forever.
Could you provide an update on the stand-alone level of debt and cash, what's the status in terms of your loans taken for HPCL?
Well, I can give you a high-level number. Expected numbers may not be available. As on 31st-- as on date actually, if we would have anything loan is close to around INR 10,000 crores. This is a high-level number. And this is post funding of buyback, which was INR 4,022 crores. We have declared dividend. We need to pay the fourth installment. So -- then you know better and you would be able to calculate the 31st March number that is on...
Sir, we have our next question from Aditya from Macquarie.
So 2 questions. First, just can you give us an update on your dividend policy going forward, how should we think about your payout? The second question is, can you give us an update on this proposed cut to CESS for your enhanced oil recovery activities?
Sure. One is as far as dividend policy remains what is there on the site also. We distribute around 40% to 55%, that's the range within which we remain. And hopefully, we will be remaining within those broad numbers. I think it also has to be seen additionally in the context of the money we have to allocate or distribute among the stakeholders when they are that. So on an overall basis, probably it will stay closer to the previous year's payout number between dividend and buyback. But right now -- I mean, these are all my personal views. The board has taken a view to declare a dividend of 105% as of date.
And the EOR question?
So I think that policy has come, and we are examining it. So all projects of EOR nature, which are ongoing, are not eligible for that benefit. But all of our ongoing projects, which we're -- we were intending to launch, we are studying them so all or few of them become eligible for incentive under that. So a fit to review of the portfolio of assets, and they're likely to be executed in near future is going on. And case by case, we are analyzing if they are straightaway eligible for it or we need to kind of do something additional to make them eligible for those benefits. So that study is going on. Right now, that work is going on and the projects will be accordingly formulated or reformulated if the requirement is there.
Our next question is from [ Akshef, BFC Securities ].
Sir, I just wanted to understand while the other income is lower in Q2 in [indiscernible] quarters. And the second question would be on OVL [ side of it ]?
That's -- are you expecting from OVL? Or -- I mean, at generic level, the right prices will be good for all oil and gas companies, so whatever issue we are putting this in the mixed production updates.
Dividend income from IOC.
So just on OVL production, if you can...
Yes, OVL production for this quarter was 3.801 MMBOE oil plus the gas, and oil was 2.607 MMBOE and gas was 1.194 MMBOE. The last quarter, the similar figures were 3.22 MMBOE and 3.505 MMBOE, oil was 2.501 MMBOE and gas was 1.992 MMBOE.
Okay. And any outlook on production numbers from oil?
Yes, production, we are actually on our target as far as the last quarter is concerned. We are actually 108.8% of our target that is MMBOE oil and gas, and the oil was 109.6% and gas was 107.1%. And we are likely to achieve our annual targets also.
For FY '20, your target would be, sir?
FY '20, our target will be at 14.358 MMBOE.
This should be in oil?
Yes, oil, but might as well, oil equivalent of gas.
Sir, if you could provide the breakup, if possible.
I don't have the -- right now, the breakup with me, I'll provide.
Okay, okay. No problem. Sir, on other expenses...
No, you had one question on other income. Other income, in fact -- nonoperating income has increased.
Other expenses. Sir, so...
So the issue was on other expenses.
You are 38.6 billion, so -- which has fallen significantly year-on-year and quarter-on-quarter, so just wanted to understand if there is any specific charges there, sir.
Just a minute. So I think give us a minute, we'll come back with answer on this question. Specific reasons why the other expenses have gone down. Workover expenditures, INR 138 crores.
Hello?
Hello. Yes, so the reasons are workover expenditure has come down by INR 157 crores, and then there is a -- no. Exchange rate is there. While there is increase in some of the elements, so this kind of utilized the -- and the net resulted into a net reduction of INR 375 crores. But other than that if one turns out to be [ that's saved again ], in fact, it has gone up by around INR 350 crores.
The next question is from Sabri Hazarika from Emkay Global.
Sir, I have 2 questions again related to the company. First of all, the JV crude royalty actually fell significantly quarter-on-quarter this quarter. So anything particular on that? Hello?
It's a -- actually, nothing has changed as far as the fiscal regime is concerned. What has happened is you would have seen an order of 14th August, 2018 by government. It actually gives us ability to pay only for our shares. So I think for some of the period, we have the mentioned royalties for only our share. So if you know, Rajasthan Block, which is the major contributor to this type of production, you should have paid 100% of royalty consumption, we have paid only 30%. So that is what has resulted in the next [ year-on-year ] production.
So earlier, if you remember, we used to pay 100% of royalty, and we all used to recover it by the other higher revenue corresponding increase used to be there in the revenue. So there was a concept of entitlement interest and there was a concept of participating interest. Participating in interest was, of course, continuous and was 30%. But DDI was around 39% to 40% also. So consequently, if you see this, actually there is another corresponding entry in the revenue side also. So if it is missing from the top, it is also missing from the bottom.
Okay, fair enough. Secondly, like you said, your operating expense actually went up Q-on-Q in [ foreign exchange of overseeing ] gain. So it has been somewhere around INR 4,500 crores, run rate adjusted for the foreign exchange gain. So net gain per run rate, we should be taking for our estimates, right? Or it would follow, right, [ the cost ]?
Yes, yes, I mean, see, there is -- there are certain elements of OpEx which are perfectly smoothly -- smooth during all the quarters. There are certain things for repair and maintenance kind of things, in which we do have a tendency to get lumped than the -- or be significant in one quarter or the other. But going forward basis, you can take this to be around run rate or maybe average of 9 months will be a better basis rather than the figure of a quarter.
Right. And just one last question. I mean, it's not directly visible, but has your profit petroleum share as a percentage of joint venture, there's an operating profit of [ the factors reduced ]. So has there been some CapEx activity going on in the JV, something that gets out, due to which your profit equivalent is down Q-on-Q?
Well actually, across different -- I have covered it in my speech also. It actually has [ little difference ] in different projects. In some of the projects, for example, it has on an overall basis for the quarter, it has gone up by INR 81 crores. With this, actually, the increase is in CB/OS-2 and RJ-ON-90/1. But there is also decrease in PMT JV, so that's because of the lower production there. So it's a very JV-specific phenomenon, but these prices have actually tended to increase once the quantity has -- adversely affected. So same is towards 9 months also -- 9 months also, the 2 JVs that were increased. Overall, there was an increase of [ 1,451 ] but there was a decrease at Panna-Mukta JVs to the extent of [ INR 192 crores ].
Okay. And sir, just one last question but it's not related to [ revolver ]. Income media reports on '97 oil and gas income, smaller oil and gas income really so -- while being divested. I think there has been some approval which has been reported by a group of ministers? So any comment on that?
We read the same media as you do. In fact, you write and we read it, so very difficult to comment on that. We have no better visibility than what you would have.
The next question is from Vidyadhar from ICICI Securities.
A couple of questions. One is on what proportion of your gas production is now currently entitled to be higher in price, which is for deepwater and HTHV fields? And what would that number be in the -- in guidance? And what that number would be in FY '20 and '21?
Okay, so the importance of gas, oil collection operations will take a bit of time.
No, no, not wondering. I want an absolute number. How much for MMSCMD whatevers?
See, currently almost 4% of the total gas -- 4% to 5% of the gas is getting higher price that is around say INR 3 million -- close to INR 3 million per day. Basically, we are getting higher price.
This is average for the year or current?
So actually, specific numbers for '19, '20, we anticipate next year. This year, we anticipate that our price entitlement to be around 3%, 3.5%. Next year, around 6%. And next to next, close to 14% to 15%. For each year, 10%, 15% is what you can broadly take the number as.
So these are percentage numbers not MMSCMD?
Yes, yes, yes. Percentage.
Yes, yes. Okay. And in terms of -- the other question was on OPaL. So there has been some news flow on [ Unifill ] looking to sell off their stake in OPaL. So what's the status there? What's -- where are we on that? And do you -- so what's the likely outcome?
No, as I said, something which is not part of the results, we will not like to discuss it now.
The next question is from Vishnu from Spark Capital.
I mean, current billing rates for OMC, is that the market rate? Or is there any discounts that you're giving them as of end of this quarter? I mean, current revenue quarter.
So for our crude, it is at international benchmarks. So no discount.
Okay, got it, sir. So one of the overhangs on the companies that the subsidy number whichever the government may or may not impose at a certain point in time. So any conversation that we had or anything that you think that a number or a discussion is likely in the next 1 or 2 months?
We never believed that there was going to be a discussion on subsidy. This is the constant team I've been talking to since January 2018 ever since I met any one of you individually or as group also. So neither there has been a discussion there nor there is going to be any discussion, that's my testament as of date at 11:30 or 11:40 also.
[Operator Instructions] We have a question from Abhijeet from Sharekhan.
Sir, can I get the CapEx credit for FY '19 and '20?
So our CapEx is likely to remain around the same. This year, our CapEx was INR 32,077 and next year also we are likely to be around INR 32,000-plus.
Okay. And this is all stand-alone, right?
Yes, this is for stand-alone.
And for control, likely you can beat CapEx with OVL and MRPL also?
So OVL also -- I mean, there was one number you -- see, typically extends around INR 5,000 crores. INR 4,800 crores is probably the projected CapEx for the next year. And unless there is any acquisition during the year, then this is the number it is likely to be around. So it can take you to plus minus [ same as close ] for [ INR 34,000 crores ]. You probably know the other entities, they are working on their own independent finances. They might be at around [ 742 ]. There is no major CapEx expected at the level of OMPL or OPaL. You would be covering the HPCL sector, so you would be knowing they have some commitments towards [ partner-defined ] but it is early days. And probably next year, they don't have substantial outlay on that.
Okay. And just one calculation that you mentioned 3%, 6% and 15%, respectively, for '19, '20 and '21 of the total gas fillings volume will get the higher gas price, right?
Yes, yes.
And one last question. Like in the last call, you have guided for FY '19 oil production of 22.75 million tons and [ 3.18 ] JV? So on this volume, falling short by 5% or 6%, right?
This year?
Yes, this year, FY '19?
Yes, yes.
And gas to be around greater?
Yes, the gas we will only improve, do better.
The next question is from Mr. [ Amit ].
I have a couple of questions. This more so is likely out of the quarter, but, sir, you gave the CapEx guidance of INR 32,000 crores, right, for both FY '20 and '20 -- I mean, '19 and '20. I just wanted to know, within the company, is there any analysis or study that goes on which kind of tells us how much of this CapEx is purely to ensure that the existing production does not fall? And how much of the rest of the CapEx is more development and related for future years to come? That's my first question. And if you can share those numbers.
Okay, okay, okay. Let's just focus by [ city ]. See, CapEx is on for enhancing the production capacity. If some also happens as all of you know, globally, the oil and gas fields have tendency to decline. Now unfortunately, when we do not see year-to-year increase in the oil production number, it is assumed that if CapEx is being spent, but there is no incremental production. What it really needs to be seen that if we were producing let's say [ 20 ] in the previous year, if there -- we had not added additional capacity in the same or some other project, it would next year have been around 17.6 or so if there was a decline of 12%. So the very fact that we are -- yes, so -- no, so -- but this is from new fields. See, you have to spend CapEx for lending the capacity for the decline -- to offset the decline, which is happening. So I mean, one way of looking from that perspective is whatever we are ready to prosecute on that side, but we are tending to be at the same level as far as oil is concerned. Now you can take it the way you like it, as what I would put it that roughly the production of last year. So 10% to 12% of that is the production added during the year because of the additional expenditure on the CapEx on oil side. On gas side, actually there is lesser addition. Major addition on oil side you will see in 2021 balanced [ 80, 98 ] by 2 points up. Otherwise, we would be able to, or around only, marginally increase the oil production. Otherwise, this will be more or less stagnant. Gas, there will be significant increase as we have shared in the past, and that we continue to share it today.
Okay. And just one question probably even to months -- anticipating months regarding the quarter. Is that -- so when we say the company decides to make all these acquisitions, right, is it a pure independent board decision or there is [ a national angle ] to it?
No. You see, the only commercial organization, it takes our decisions, which are commercial by -- if it stands best of commercial scrutiny.
The next question is from Vidyadhar from ICICI Securities.
Just any guidance on FY '21 gas production? Or how much growth because you've said 5% to 6% growth next year for FY '20, so FY '21, what kind of growth is possible?
Hello? So first is '20. '20, our production is likely to be -- stand-alone production is likely to be [ 27 Bassein ]. And '21, it is likely to be 33. So that with -- and with joint ventures, it is likely to be 28.32 for -- or 28 you can pick for '19, '20. And '20, '21, it is likely to be 33.32.
Okay. And will bulk of the growth in '21 come from the KG deporter field?
Yes, yes, KG 98/2 then Deen Dayal then Daman then [ GS-90 ], it's 14 -- or 49/2, but most of it will come definitely from KG 98/2.
So there's -- Deen Dayal is expected to start producing in '21, is it?
Yes, start adding to the production.
Basically, Deen Dayal is contributing even now, a small quantity. We are drilling more wells even today.
And what would be production yield from that field?
So that figure is not readily available there.
Okay. But you -- could we share that some later stage?
Yes, yes.
We have our next question from Gandhi.
Sir, just wanted to get some sense of how the lifting costs have been trending over the last 3 or 4 years? And if you can segregate between how the lifting costs are between crude and gas?
Costing, the backup we have not analyzed on an immediate basis. But I believe -- well, they are around the same level as the last year. Let me see if -- on -- if we have some information that we have compiled on this on an individual basis.
But sir, a ballpark, could you give us some sense of what would be the lifting cost?
That's what I'm -- so that's what we are trying. The natural gas is around -- so I think lifting cost is $9.29. Actually, this is a very quick estimate, okay, conveying the treatment cost to another $7.50 and transportation cost close to $0.80 so a total cost -- operating cost is close to $18 or so. If you add DD&I, that's around $6.58. If you were to add this royalty and CESS, et cetera, it would be of the order of $46, $47.
Sir, just only on gas, if you can give us some sense of what would this be?
Gas is around [ 3 ], total number, cost of production.
So we do not have any further questions in queue. So I will hand it over back to you.
Okay. So thanks a lot, and I appreciate everybody coming this morning and speaking to us. We are available for any information. We are happy to give any additional information that can otherwise be given. So if you have follow-up questions, the -- our IR team will facilitate information on all your calls. So thank you very much for coordinating, and thanks for everybody who were there on the conference call, for having participated in this call. Hello?
Thank you so much, sir. Thank you, participants, for joining in. You all may disconnect the lines now. You have a great evening ahead.
Okay. Thanks, ma'am. Thank you. Bye.
Bye too.