OIL eyes early development of NELP blocks

Oil India said on Wednesday it is targeting early development of blocks bagged under New Exploration Licensing Policy (NELP) auctions in KG basin, Rajasthan and Mizoram to increase its hydrocarbon output. This is primarily because the existing blocks have reached saturation limits, said UP Singh, the chairman and managing director at Oil India.

Singh, who is also the additional secretary (exploration) in the petroleum ministry, said the explorer is also implementing improved oil recovery techniques to boost output. In the Mizoram block, bagged in the sixth round of NELP auction, drilling of first well is in progress. On other hand, gas discovery has been made in the first well of the KG basin block.

Meanwhile, in the June quarter, Oil India reported a 9% drop in the net profit to Rs 775.42 crore against Rs 851.87 crore in the same period last year. The lower net profit is despite higher realisation from crude oil sales and less subsidy sharing.

The fall in net profit is because of high pay out towards non-completion of minimum work programme at Rs 50.46 crore and write-offs for dry wells at Rs 56.55 crore, said Singh.

Oil India fuel subsidy burden fell in Q1 FY16 to Rs 167.43 crore from Rs 1,846.55 crore in the first quarter of last fiscal. In Q1FY16, the explorer got a gross price of $61.85 per barrel on sale of crude oil and after accounting for fuel subsidy discounts, the net realisation was $57.42 a barrel. This was better than the net realisation of $52.35 per barrel in the June quarter last year after paying $56 on subsidy discounts.

Crude oil production was almost flat at 0.84 milliontonne, so was natural gas at 0.642 billion cubic metres. Singh said there was a foreign exchange gain of Rs 167 crore. Turnover rose to Rs 3,159.87 crore against Rs 2,931.52 crore.

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