Windfall tax, imposed at the beginning of July and revised every fortnight, has curbed price realization for domestic oil producers. The average windfall tax has been about $25-26 per barrel during the quarter and the average price realisation for the company has been about $80 per barrel, said Harish Madhav, Director (Finance) at Oil India.
Since the price realisation this quarter is higher than in the same period last year, the profits are likely to be healthy, he added. The average crude realisation in the July-September quarter of 2021-22 was $71.35 per barrel, which was much higher than $42.75 in the second quarter of 2020-21.
International crude prices have been declining, losing about $24 per barrel since July 29. Oil dropped $4 on Friday and is currently trading at around $86 per barrel.
Oil India is planning to invest Rs 28,000 crore to expand the capacity of its Numaligarh refinery from 3 million tonnes a year to 9 million tonnes a year and to build a connecting crude pipeline from Paradip in Odisha, Madhav said. Seventy percent of the project cost will be funded by debt and the balance through internal resources. The project is targeted to be completed by the end of 2025.
Oil India aims to raise its output to 4 million metric tonnes (MMT) of oil and 5 billion cubic meters (BCM) of natural gas over the next few years, chairman Ranjit Rath said. The company currently produces 3 MMT of oil and 3 BCM of gas.
The company has undertaken a massive exploration programme in recent times. It has acquired exploration acreage of 54,000 sq km under the government’s new open acreage licensing policy in the last few years.