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KG 98/2 oil production decline
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Oil & Natural Gas Corporation — Q2 FY26
ONGC's consolidated PAT rose 28.19% YoY to INR 12,615 crore in Q2 FY26, driven by strong subsidiary performance from HPCL and MRPL.
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ONGC's consolidated PAT rose 28.19% YoY to INR 12,615 crore in Q2 FY26, driven by strong subsidiary performance from HPCL and MRPL. Standalone PAT fell 17.8% to INR 9,848 crore due to lower crude oil realizations ($67.34/bbl vs $78.33/bbl) and higher DD&A costs. Crude oil production grew 1.2% YoY to 4.630 MMT, while gas production decline was arrested at -0.04%. New well gas contributed INR 3,352 crore in H1, with share reaching 21% of gas revenue. Management guided FY27 oil production at 21 MMT and gas at 21.5 BCM, with ramp-up from KG 98/2 (gas to 10 MMSCMD by mid-2026) and Daman upside (5 MMSCMD). The BP-led Mumbai High redevelopment is expected to show green shoots from January 2026. Key risk: KG 98/2 oil production has slipped to 28,000 bpd, and recovery depends on well interventions.
ONGC का कुल मुनाफा (PAT) Q2 FY26 में पिछले साल की तुलना में 28.19% बढ़कर 12,615 करोड़ रुपये हो गया। इसकी वजह इसकी सहायक कंपनियों HPCL और MRPL का अच्छा प्रदर्शन रहा। लेकिन सिर्फ ONGC का अपना मुनाफा 17.8% घटकर 9,848 करोड़ रुपये रह गया, क्योंकि कच्चे तेल की कीमतें कम मिलीं ($67.34 प्रति बैरल, पहले $78.33 थी) और खर्च बढ़ गए। कच्चे तेल का उत्पादन 1.2% बढ़कर 4.630 मिलियन टन हुआ, जबकि गैस उत्पादन में गिरावट लगभग रुक गई। नए कुओं से गैस ने H1 में 3,352 करोड़ रुपये का योगदान दिया। कंपनी ने FY27 में 21 मिलियन टन तेल और 21.5 बीसीएम गैस उत्पादन का लक्ष्य रखा है। KG 98/2 से गैस उत्पादन 2026 के मध्य तक बढ़ेगा। मुंबई हाई के विकास से जनवरी 2026 से फायदा मिलने की उम्मीद है। जोखिम: KG 98/2 से तेल उत्पादन घटकर 28,000 बैरल प्रतिदिन रह गया है।
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Crude oil production (standalone Q2 FY26)
4.630 MMT
+1.2% YoY
Standalone crude oil production grew 1.2% YoY to 4.630 MMT in Q2 FY26.
New well gas share of total gas revenue (H1 FY26)
21%
+8pp YoY
New well gas revenue share rose to 21% of total gas revenue from nomination fields in H1 FY26.
KG 98/2 oil production (current)
28,000 bpd
-2,000 bpd vs prior quarter
KG 98/2 oil production declined to 28,000 bpd from 30,000 bpd a quarter ago.
KG 98/2 gas production (current)
3 MMSCMD
flat
Gas production from KG 98/2 is currently 3 MMSCMD, constrained by living quarters installation.
What Changed vs Last Quarter
NEW
KG 98/2 gas ramp-up to 10 MMSCMD by mid-2026
Gas production from KG 98/2 is expected to ramp up to 10 MMSCMD by June-July 2026 after living quarters installation.
NEW
OpEx cost reduction target of INR 5,000 crore
Management targets reducing operating expenses by INR 5,000 crore through logistics optimization, dual-fuel rigs, and renewable power.
UPDATED
FY27 standalone oil production target of 21 MMT
Management guided FY27 standalone crude oil production at 21 MMT, up from expected 19.8 MMT in FY26.
UPDATED
FY27 standalone gas production target of 21.5 BCM
Management guided FY27 standalone gas production at 21.5 BCM, up from expected 20 BCM in FY26.
DROPPED
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.
DROPPED
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.
DROPPED
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.
NEW RISK
KG 98/2 oil production decline
Oil production from KG 98/2 fell to 28,000 bpd from 30,000 bpd, and recovery depends on well interventions with uncertain timing.
NEW RISK
Production guidance miss for FY26
Management acknowledged that FY26 oil and gas production will be below initial guidance due to delays in KG 98/2 ramp-up.
NEW RISK
Mozambique project cost escalation
Total project cost for Mozambique LNG may rise above $16-17 billion, requiring additional approvals and partner contributions.
NEW RISK
Crude oil price volatility
Standalone PAT declined 17.8% YoY due to lower crude realizations; further price drops could pressure earnings.
RISK GONE
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.
RISK GONE
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.
RISK GONE
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.
RISK GONE
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.
🤫 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 FY26, Q3 FY25
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.
Fast read
Guidance and risk preview
Management guided FY27 standalone crude oil production at 21 MMT, up from expected 19.8 MMT in FY26.
Oil production from KG 98/2 fell to 28,000 bpd from 30,000 bpd, and recovery depends on well interventions with uncertain timing.
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