Ongc vs Bharat Petroleum Corporation Q4 FY25

ONGC's Q4 FY25 standalone PAT declined 12.1% YoY to INR 35,610 crore, primarily due to a INR 4,257 crore increase in exploration write-offs. Revenue was flat at INR 137,361 crore. Crude oil production rose 0.9% to 18.558 MMT, while gas production fell 1.6% to 19.654 BCM. Management highlighted a record 578 wells drilled and INR 62,000 crore CapEx, the highest ever. Key growth drivers include the KG 98/2 field (oil at 33-34 kbpd, targeting 45 kbpd), new well gas pricing adding INR 700 crore in FY25, and OPaL's turnaround post-SEZ denotification. Guidance points to standalone crude production of ~21.5 MMT and gas of ~21 BCM in FY26, with 5 MSCMD incremental gas from DUDP by Q4 FY26. Risks include continued dry well write-offs and delayed KG 98/2 gas ramp-up due to living quarters installation.

Guidance read

Standalone crude oil production target of ~21.5 MMT for FY26: Management expects crude production to rise to 21.5 million metric tons in FY26, driven by TSP initiatives and new wells. Standalone gas production target of ~21 BCM for FY26: Gas production expected to reach 21 BCM in FY26, with 5 MSCMD incremental from DUDP by Q4 FY26. CapEx guidance of INR 30,000-35,000 crore for FY26: Total CapEx including E&P and renewables expected to be INR 30,000-35,000 crore, lower than FY25 due to falling service costs. New well gas to add INR 1,500-2,000 crore revenue in FY26: Revenue from new well gas pricing expected to double from INR 700 crore in FY25 to INR 1,500-2,000 crore in FY26.

Risk read

Key risks include Dry well write-offs may persist — Exploration write-offs surged to INR 4,257 crore in FY25; management noted unpredictability in dry well incidence, which could pressure earnings.; KG 98/2 gas ramp-up delayed by living quarters installation — Gas production currently at 2.75 MSCMD; target of 6-7 MSCMD hinges on installing a living quarters platform, delayed due to weather.; OPaL ethane sourcing timeline uncertainty — OPaL's ethane import from US is targeted for 2028; any delay could prolong reliance on costlier naphtha (60% of feedstock)..

Promise ledger

Of 2 tracked promises, management 0 met, 1 close, 1 missed.

BPCL reported Q4 FY25 revenue of INR 1,26,865 crore and PAT of INR 3,214 crore, supported by strong refining throughput of 10.58 MMT (121% capacity) and GRM of $9.2/bbl (premium of $3.16/bbl over Singapore). Marketing sales grew 1.82% YoY to 13.42 MMT, with record annual lubricant sales of 472 TMT. The company maintained a healthy balance sheet with net debt-to-equity of 0.13. Management guided for FY26 CapEx of INR 20,000 crore, rising to INR 30,000 crore by FY28, driven by CGD, Mozambique, and petrochemical projects. LPG under-recovery remains a drag at ~INR 170/cylinder, though a government mechanism is hoped for. Key risk: sustained LPG under-recovery without compensation could pressure cash flows amid elevated CapEx.

Guidance read

FY26 CapEx of INR 20,000 crore: Capital expenditure for FY26 is budgeted at INR 20,000 crore, with INR 5,900 crore for refineries, INR 5,600 crore for marketing, and INR 2,400 crore for pipelines. CapEx ramp-up to INR 30,000 crore by FY28: Management expects CapEx to increase to INR 25,000 crore in FY27 and INR 30,000 crore in FY28, excluding the Andhra Pradesh greenfield project. GRM guidance of $7-$9/bbl: Assuming current spreads and Russian discounts of ~$3/bbl continue, management expects GRMs in the $7-$9/bbl range. Mozambique project restart by July 2025: Operator expects force majeure to be lifted by July 2025, with project completion targeted by July 2028.

Risk read

Key risks include LPG under-recovery without compensation — LPG under-recovery is ~INR 170/cylinder, costing INR 650-700 crore per month. No government compensation mechanism has been announced, which could pressure cash flows.; Russian crude discount compression — Russian crude discounts have narrowed to ~$3/bbl from $8/bbl a year ago. Further compression could reduce refining margins, especially as new buyers (Turkey, Syria) emerge.; Mozambique project cost overruns — Project cost has escalated from $15.4 billion to an estimated $19.4 billion. Further delays or cost increases could impact BPCL's investment returns.; Market share loss in retail fuels — BPCL has lost some market share in petrol and diesel due to aggressive private sector competition. Management expects recovery through network expansion, but near-term pressure persists..

Promise ledger

Scorecard data is being built as historical quarters are processed.