ONGC Reports 10% Profit Decline as Oil Prices Fall

Indian state-owned Oil and Natural Gas Corporation Limited (ONGC) has reported a 10% decline in net profit for the first quarter of the 2025/2026 fiscal year, primarily due to falling oil prices and stable production levels. For the April-June period, ONGC recorded a net profit of $917 million (80.24 billion Indian rupees), down from the previous year’s earnings. This downturn reflects the broader volatility in global oil markets, where prices dropped approximately 10% during the quarter.

The price of crude oil for ONGC fell to $67.87 per barrel from $80.64 per barrel in the same period last year. This significant decrease contributed to a 9.3% reduction in total revenues, which fell to $3.65 billion (320 billion rupees). Despite these challenges, ONGC’s production figures remained relatively constant. The company reported crude output of 4.683 million tons, slightly up from 4.629 million tons in the April-June quarter of 2024. Natural gas production showed similar stability, reaching 4.846 billion cubic meters.

Future Strategies Amid Price Volatility

In light of ongoing market fluctuations, ONGC is looking to diversify its operations beyond traditional oil and gas exploration. A senior executive, Arunangshu Sarkar, director for strategy at ONGC, indicated that the company plans to expand into refining, petrochemicals, liquefied natural gas (LNG) trading, and renewable energy. Sarkar expressed concerns about the long-term viability of oil companies in a low-price environment, stating that “globally, we are heading to a glut in oil supplies which means prices will reduce.” He emphasized that the diversification plans aim to provide a buffer against the risks associated with declining oil prices.

ONGC is actively pursuing opportunities to secure LNG regasification capacity along India’s western coast and is in discussions regarding gas offtake agreements with local distributors. Additionally, the company is considering the development of a refinery project in the most populous Indian state, though details remain limited as the initiative is still in its early planning stages. Reports from last year suggested that ONGC is evaluating an ambitious $8.3 billion investment in a refinery and petrochemicals project to meet the increasing fuel demand in the region.

As ONGC navigates these challenges and opportunities, the company remains focused on maintaining its position as India’s largest oil and gas producer while adapting to the changing dynamics of the global energy market.