ONGC Videsh Declares FY’17 Financial Results
New Delhi: May 24, 2017
Financial results of ONGC Videsh Ltd, the wholly-owned subsidiary of Oil and Natural Gas Corporation Limited (ONGC), for the year ended March 31, 2017 were considered and approved by the Board in its meeting held on May 22, 2017. The performance highlights are as under:
![Financial Table](https://www.ongcvidesh.com/wp-content/uploads/2017/05/Financial-Table.jpg)
Consolidated production of Crude Oil and Oil Equivalent Gas during FY’17 was higher by 44% as compared to previous year. The incremental production is mainly due to acquisition of 26% stake in Vankorneft project in Russia during the year.
The Company recorded its standalone profit of Rs. 1,749 crore during the FY’17 against loss of Rs. 3,894 crore in the previous financial year and consolidated profit of Rs. 701 Crore during FY’17 as against consolidated loss of Rs. 3,633 Crore during FY’16. The financial statements of FY’16 have been restated in accordance with Indian Accounting Standards (Ind AS).
The financial statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and Guidance Note on Accounting for Oil and Gas Producing Activities (Ind AS) issued by the Institute of Chartered Accountants of India. These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2015. The mandatory exceptions and optional exemptions availed by the Company on first-time adoption have been detailed in the notes to the financial statements. The Company has determined its functional currency to be United States Dollar (USD) and accordingly prepared the financial results in USD and has translated the same in Rs. for submission to NSE & publication as per the reporting requirements.
The Board of Directors has proposed a final dividend of Rs. 1.40 per share (previous year: Nil) to be paid on fully paid equity share of par value of Rs. 100 each. This equity dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting.
A. New Acquisitions and Agreements
• ONGC Videsh completed acquisition of 15% interest in Vankor Field located in East Siberia of the Russian Federation on May 31, 2016 from Rosneft Oil Company and subsequently acquired additional 11% interest on October 28, 2016. Vankor is Russia’s second largest field by production and accounts for 4% of Russian production. The daily production from the field is around 400,000 barrels per day of crude oil (bopd) on an average and ONGC Videsh’s share of daily oil production from Vankor (considering both the acquisitions) is about 104,000 bopd.
• ONGC Videsh and Petroleos De Venezuela S.A. (PDVSA) through their relevant subsidiaries signed two definitive agreements for facilitating redevelopment of the San Cristobal joint venture project in Venezuela on November 4, 2016. The remediation plan aims to increase the current level of production by about 40%. The agreement also provides for mechanism to liquidate ONGC Videsh’s outstanding dividends from the project and ONGC Videsh to obtain long term finance for the capital investment for implementing the redevelopment plan. As per provisions of the agreement, ONGC Videsh has already received USD 88.4 Million and extended a loan of USD 17.1 Million for remediation plan of the project.
B. Financing
• ONGC Videsh Vankorneft Pte. Ltd., a step down wholly owned subsidiary of ONGC Videsh, July 2016, raised USD 1 billion comprising of USD 400 million Senior Unsecured Notes due 2022 and USD 600 million Senior Unsecured Notes due 2026 in the international capital markets for refinancing the bridge loan for acquisition of 15 shares in JSC Vankorneft. The bond issuance was made at competitive rates and well received by the investors. The deal has been awarded the “Best Corporate Bond” deal from India at The Asset Triple A Country Awards 2016.
• ONGC Videsh Vankorneft Pte. Ltd also raised finances by way of bridge loan to acquire 11% shares in JSC Vankorneft in October 2016. The bridge loans have been replaced in April 2017 for which the company tied up USD 500 million and JPY 38 billion syndicated longer tenor facilities at competitive prices from International commercial banks.
C. Operations
• Sakhalin-1 Project, Russia
New Built Drilling Rig “Krechet” for Sakhalin-1 Project
The stage 2 development of the Odoptu field will be carried out with a new high technology Rig, for drilling nearly 32 wells and will capture nearly 400 Million Barrels of Oil during the rest of the project life.
World’s longest ERD well (O5-RD) was spud in Chayvo Field with measured length of 15,000 m on February 6, 2017. Drilling of this well will break its own earlier record of 13,500 m in the same field.
• Satpayev project, Kazakhstan
Govt. of Republic of Kazakhstan granted extension of exploration period for two years w.e.f June 6, 2017 and the Company plans to drill the second commitment well in July 2017.
D. ONGC Videsh’s current portfolio
ONGC Videsh has participation in 38 projects in 17 countries including Azerbaijan, Bangladesh, Brazil, Colombia, Kazakhstan, Iran, Mozambique, Myanmar, Russia, South Sudan, Sudan, Venezuela, Vietnam and New Zealand. ONGC Videsh maintains a balanced portfolio of 38 projects, 14 producing, 4 discovered/under development, 16 exploratory and 4 pipeline projects. The Company currently operates/ jointly operates 20 projects.