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KG Basin ramp-up delays
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Oil & Natural Gas Corporation — Q1 FY26
ONGC reported consolidated PAT of INR 11,552 crore for Q1 FY26, up 18.2% YoY, driven by higher other income from HVCR and lower statutory levies due to SAED abolition.
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ONGC reported consolidated PAT of INR 11,552 crore for Q1 FY26, up 18.2% YoY, driven by higher other income from HVCR and lower statutory levies due to SAED abolition. Standalone PAT fell 10.2% to INR 8,024 crore on lower crude realizations (INR 66.13/bbl vs INR 83.05/bbl). Crude oil production rose 1.2% YoY to 4.683 MMT, reversing decline, while gas production was flat at 4.846 BCM. KG Basin output reached 30,000 bbl/d oil and 3 mmscmd gas, with ramp-up to 45,000 bbl/d and 6-7 mmscmd gas expected from Q4 FY26 after living quarter installation. New Well Gas contributed INR 1,703 crore revenue at a 20% premium. OPaL turned EBITDA positive at INR 13 crore. Risks include further delays in KG Basin ramp-up and sustained low crude prices.
ONGC ने पहली तिमाही (अप्रैल-जून 2025) में कुल मुनाफा 11,552 करोड़ रुपये कमाया, जो पिछले साल की समान तिमाही से 18.2% ज्यादा है। यह बढ़ोतरी दूसरे स्रोतों से ज्यादा आय और सरकारी फीस में कमी के कारण हुई। लेकिन सिर्फ तेल-गैस कारोबार का मुनाफा 10.2% घटकर 8,024 करोड़ रुपये रह गया, क्योंकि कच्चे तेल की कीमत 83 डॉलर से गिरकर 66 डॉलर प्रति बैरल हो गई। तेल उत्पादन 1.2% बढ़कर 4.68 करोड़ टन हुआ, जबकि गैस उत्पादन स्थिर रहा। KG बेसिन से तेल उत्पादन 30,000 बैरल प्रतिदिन और गैस 3 मिलियन घन मीटर प्रतिदिन है। अगले साल की चौथी तिमाही से यह बढ़कर 45,000 बैरल तेल और 6-7 मिलियन घन मीटर गैस होने की उम्मीद है। नई गैस से 1,703 करोड़ रुपये की आय हुई। OPaL ने पहली बार 13 करोड़ रुपये का मुनाफा कमाया। जोखिम: KG बेसिन में देरी और कच्चे तेल की कीमतें कम रहना।
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Crude oil production (standalone)
4.683 MMT
+1.2% YoY
Standalone crude oil production increased 1.2% YoY to 4.683 MMT in Q1 FY26.
KG Basin oil production
30,000 bbl/d
flat QoQ
KG Basin oil production steady at 30,000 bbl/d; target of 45,000 bbl/d delayed to Q4 FY26.
New Well Gas revenue
INR 1,703 crore
+INR 333 crore vs APM
New Well Gas revenue reached INR 1,703 crore, with INR 333 crore incremental over APM price.
OPaL EBITDA
INR 13 crore
positive vs negative
OPaL turned EBITDA positive at INR 13 crore in Q1 FY26, with plant utilization above 90%.
What Changed vs Last Quarter
NEW
KG Basin ramp-up to 45,000 bbl/d oil and 6-7 mmscmd gas by Q4 FY26
KG Basin oil production to increase from 30,000 bbl/d to 45,000 bbl/d and gas from 3 mmscmd to 6-7 mmscmd by Q4 FY26, after living quarter installation in Nov-Dec 2025.
NEW
New Well Gas volume to reach 4.8+ BCM in FY27 (24-25% of total gas)
New Well Gas volume expected to increase from 2.6 BCM in FY26 to 4.8+ BCM in FY27, representing 24-25% of total gas production.
UPDATED
FY26 standalone production guidance: 20.928 MMT crude oil, 20.110 BCM gas
Management guided standalone crude oil production of 20.928 MMT and gas production of 20.110 BCM for FY26.
UPDATED
FY27 standalone production guidance: 21 MMT crude oil, 21.487 BCM gas
Management guided standalone crude oil production of 21 MMT and gas production of 21.487 BCM for FY27.
DROPPED
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.
DROPPED
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.
NEW RISK
KG Basin ramp-up delays
KG Basin production ramp-up delayed from Q2 to Q4 FY26 due to unavailability of living quarter vessel and monsoon. Further delays could impact FY26 production targets.
NEW RISK
Sustained low crude oil prices
Crude oil realization fell 20% YoY to INR 66.13/bbl. If prices remain low, standalone profitability could be further impacted.
NEW RISK
OPaL debt burden and petrochemical cycle risk
OPaL has debt of INR 24,800 crore. While EBITDA turned positive, profitability depends on petrochemical cycle upturn. Management has no immediate plans to infuse equity.
NEW RISK
Operating cost inflation
Operating expenses rose 7.6% YoY due to higher FPSO charges and LNG costs. Cost reduction initiatives (Pipavav port, crew boats) are yet to show material impact.
RISK GONE
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.
RISK GONE
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.
RISK GONE
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).
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY25, Q4 FY25
Total CapEx including E&P and renewables expected to be INR 30,000-35,000 crore, lower than FY25 due to falling service costs.
Mentioned in Q1 FY25, Q3 FY25, Q4 FY25
Management expects crude production to rise to 21.5 million metric tons in FY26, driven by TSP initiatives and new wells.
Mentioned in Q1 FY25, Q2 FY25
Management confirmed on track to reach 45,000 barrels of oil per day from the KG field by the end of the current financial year.
Fast read
Guidance and risk preview
KG Basin oil production to increase from 30,000 bbl/d to 45,000 bbl/d and gas from 3 mmscmd to 6-7 mmscmd by Q4 FY26, after living quarter installa...
KG Basin production ramp-up delayed from Q2 to Q4 FY26 due to unavailability of living quarter vessel and monsoon.
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