Good morning, ladies and gentlemen. I'm Palsheya, moderator for the conference call. Welcome to ONGC's Q2 FY2023 earnings conference call. We have with us today Mrs. Pomila Jaspal, Director Finance, and her team, who will interact with investors and analysts to discuss Q2 earnings. As a reminder, all participants will be in listen-only mode, and there will be an opportunity for you to ask questions after the brief synopsis of the results concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone telephone. Please note this conference is recorded. I would now like to hand over the floor to Madam Pomila Jaspal. Thank you, and over to you. Good morning, ladies and gentlemen. Just to introduce, I am Pomila Jaspal, Director Finance, ONGC. I welcome you all in this ONGC earnings call for quarter 2 and six months financial year 2023. Thank you all for joining us on the call. I am joined here by my colleagues, Mr. Vivek Tongaonkar, our Chief Corporate Finance, and Mr. K.C. Ramesh, our Chief Accounts and Financial Reporting Services, Mr. Anil Kumar, our Chief Commercial, Mr. Pavan Aggarwal, our Chief Corporate Planning and Strategy, Mr. Sanjay Bharti from our Corporate Accounts team, Mr. Nirmal Kumar and Mr. Chandrashekhar from ONGC Videsh Limited, and Mr. Prakash Joshi from Investor Relations and Corporate Budget section. You will be happy to note that ONGC has compiled its financial results for the quarter and six months ended September 30, 2022, which have been reviewed by the statutory auditors. The financial results have already been released on November 14, 2022 through a press note and sent to the stock exchanges. This has also been sent to the analysts who are there on our mailing list. Here is a brief synopsis of the results. Company has earned a net profit that is profit after tax of INR 12,826 crores during the second quarter of financial year 2022-23, as against INR 18,348 crores during second quarter of financial year 2021-2022. A decrease of INR 5,522 crore, that is 30.1%. During quarter two financial year 2021, 2022, the company had decided to opt for lower tax regime under Section 115BAA of the Income Tax Act, 1961, with effect from financial year 2021. Accordingly, the company had recognized provision for tax expenses and remeasured its net deferred tax liabilities. The impact due to availing the option had resulted in decrease in deferred tax by INR 8,541 crore in quarter two financial year 2021, 2022. The profit after tax that is paid for H1 for financial year 2022-23 has increased by INR 5,350 crores, that is 23.6%, from profit after tax paid of INR 22,682 crores in financial year 2022 to INR 28,032 crores in H1 financial year 2023. The increase in net profit during H1 financial year 2023 is on account of higher sales revenue, that is mainly due to higher crude oil, natural gas and gas price realizations, then higher other income, that is interest and dividend income. The sales revenue for quarter two financial year 2023 and H1 financial year 2022-2023 has increased by INR 13,908 crores, that is 57.3%, and by INR 33,092 crores, that is 70.1%, as against the corresponding quarter and H1 of the previous year. The billing net of VAT and CST for crude during the second quarter in the current fiscal was at $95.49 per barrel, as against $69.36 per barrel in the same period of last year. That is an increase of $26.13 per barrel. The exchange rate of rupee versus dollar stood at 79.81 rupees vis-à-vis 74.09 rupees. Thus, realization for crude in rupee terms stood at INR 7,621 per barrel in quarter two financial year 2023, vis-à-vis 5,139 rupees per barrel in quarter two financial year 2021-22. That is an increase of 2,482 per barrel in INR terms. Similarly, gross billing for crude during the first six months of the current fiscal was at $101.98 per barrel. As against $67.45 per barrel in the same period of last year. That is an increase of $34.53 per barrel. The exchange rate of rupee versus dollar stood at 78.55 rupees vis-à-vis 73.92 rupees. Thus, realization for crude in rupee terms stood at INR 8,011 per barrel in H1 2023 vis-à-vis INR 4,986. Rupees. Rupees per barrel in H1, that is financial year 2021-2022, which amounted to an increase of INR 3,025 rupees per barrel, 60.7% in INR terms. The expenditure on statutory levies, that is royalty, cess and excise duty, have increased during quarter two financial year 2023 by INR 8,514 crores, that is 8,514 crores, 139.2% increase. In H1 financial year 2023 by INR 13,160 crores, that is 108.9% in comparison with similar period of previous year. This increase in statutory levies is attributable to increase in sales price of crude oil and natural gas and levy of special additional excise duty by Government of India on production of petroleum crude at a rate revised on every fortnight based on international crude price. This SAED on crude has been levied with effect from July 1st, 2022, which amounted to INR 6,452 crores in quarter 2 financial year 2022. There is an increase of INR 2,022 crores in exploration costs written off in quarter 2, 2022-23, and INR 2,069 crore in H1 financial year 2023 versus corresponding quarter and half year period of previous year. This increase is due to company charging off exploration wells amounting to INR 2140 crores lying in the fields falling under contract areas offered under DSF III by DGH and awarded to the winning bidders. The operating expenditure has increased by INR 242 crores, that is 4.8%, from INR 5025 crores in quarter two 2021-2022 to INR 5267 crores in quarter two 2022-2023. The increase is mainly on account of increase in repairs and maintenance by INR 156 crores, transportation expenses by INR 64 crores, mainly at Mumbai offshore due to increase in activity and rates. Similarly, the operating expenditure in H1, that is 2022-2023, has also increased by INR 838 crores from INR 9823 crore in H1 2022 to INR 10,661 crore in H1 financial year 2022-2023. The increase is mainly on account of the increase in work over operations, that is INR 131 crores. Water injection at the rate of INR 161 crores due to increase in activities and repair and maintenance cost to INR 76 crores mainly at Mumbai offshore. Depletion, depreciation, and impairment cost for quarter two financial year 2023 and H1 financial year 2023 stood at 2,595 crores and 7,104 crores, respectively, as 3,943 crores in quarter two financial year 2022 and INR 8,108 crores during corresponding year of previous year. This decrease is due to reversal of impairment of INR 2,129 crores on certain discovered small fields of the company falling under 10 contract areas which were awarded by DGH to the winning bidders. Well, friends, with this I finish my briefing of the second quarter results for financial year 2022-2023. We will be very happy to take questions from you. We would request you to restrict your queries on financial results only. Thank you. Thank you, ma'am. Yeah. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. We will wait for a moment while the question queue assembles. The first question comes from Probal Sen from ICICI Securities. Please go ahead. Thank you for the opportunity, sir. Am I audible? Please go ahead, sir. Yeah. Two questions. One was, with respect to the, windfall tax, is there any sense you get in terms of what the minimum, floor rate in mind of the government? Can we assume that the net realization for somewhere between $75-$76 level, you know, is something that, you know, is targeted, and therefore irrespective of where crude is right now, that's sort of the net realization so we should be, you know, factoring in. Yeah. for at least the near term. Can we answer this? Yeah. Probal Sen, this windfall tax—your question regarding the windfall tax, regarding the floor rate and the rate under which conditions, the government is levying this tax. Although officially they have not given any date, but in the discussions they have been, and that's what we have seen in the seven revisions which have taken place till date, starting from July 1, 2022, that they are keeping a floor rate of something around $75-$76 per barrel. They are, you know, not going lower than that. That is what I would like to say. Okay. Secondly, again on pricing, you know, we have the Kirit Parikh Committee recommendations that can come at any time, from what we understand. Any sense you can give us in terms of, you know, what kind of pricing they are looking at? And on the flip side for us, given how low pricing used to be till recently, is it fair to assume even if the pricing stays at somewhere around, let's say $6.5-$7, that's something that is more than comfortable for us, at least for the legacy assets? Of course, the pricing for KG Basin assets will anyways be different, that will be based on the premium gas price through that. Is that a fair way to look at it? Yeah. Mr. Probal, I think, our relevant person who is going on attending the meetings also, so he's right here, Mr. Anil Kumar. He will like to give an answer to this. Good morning, myself Mr. Anil Kumar. That's correct. The government has constituted a committee headed by economist Mr. Kirit Parikh, and they have conducted. I think they have hold around five meetings. If you see the mandate of the committee that say that the committee should suggest market-oriented pricing regime for India's long-term regime for ensuring gas-based economy. The mandate itself says that the price should be remunerative so that there should be investment in the oil sector and there should be growth in the oil sector or gas sector particularly. In the meeting they have consulted all the stakeholder, including association like FICCI, ASSOCHAM and CII, and everybody is of the view that there should be marketing and pricing freedom. We have been also pursuing that there should be marketing and pricing freedom because all the new gas there is a marketing and pricing freedom. We are expecting marketing and pricing freedom so that there should be growth in the industry. Okay. One last question, if I may, on the KG Basin assets. Any progress you would like to share? Any first guidance in terms of, you know, what volumes could be by the end of this year and maybe for FY 2024 from the, you know, KG Basin assets? This KG Basin, definitely we have now the volumes with us also. What I would like to share is that our FPSO, so that is going to sail with Indian waters from Singapore yard, and that will be reaching sometime in January or February. Accordingly, after hooking up the other, you know, the subsea engines and other equipment, so we will be ready to, you know, have a first oil and the gas. What we are projecting is, the first oil we will be getting in May 2023. As regards the volumes are concerned, I think, yeah, our Pavan Aggarwal, he is our Chief Strategist, so he will like to answer that. For the fair weather season from January, all major activities are going to be undertaken during this period. Like the Sir, my apologies. I can't hear you, sir. Yeah, I'm sorry to interrupt you, sir. Yeah. Okay. Yes, your voice is not audible. Yeah, just one moment. Just one moment. Hello. Am I audible now? Yes, sir. Yes, sir. Much better. Thank you. Okay. In the 98/2, we are waiting for the fair weather season, which will be starting from January till April, and we'll be undertaking many activities during this period. FPSO will be arriving. We will be hooking up our all the subsurface, and we expect our first oil to be coming up by May 2023. During this year, 2023, 2024, we anticipate To get something around in the balance of the year of 2023-24. We'll be getting oil of something around 1.935 MMT from April till March 2024. Incremental gas of around 2.784 BCM. Sorry, how much BCM, sir? 2.78 BCM. 2.78 BCM of gas and 1.93 MT of oil roughly, post May 2023. That's what I'm looking at, right? Yeah. All right. I will come back if I have more questions. Thank you so much for the detailed answers. Have a nice day. Thank you. Thank you. Next question comes from Puneet Gulati from HSBC. Please go ahead. Yeah, thank you so much. My first question is with respect to, you know, the increased repair and maintenance and the activity that you are building up now offshore. Is it likely to result in increased volume from that field? Or is it just to, you know, prevent the downside, if you can give some color there. Actually, this has been a preventive maintenance only. That is what it has been happening, because during the COVID time, and of course, the Tauktae also, because certain things were our platform and facilities, there was some kind of a, you can say, damage to them also during Tauktae. Those repair and maintenance are also happening. It will be not in the form of, you can say, increase in the incremental production, but it will be more like a regular repair and maintenance. Mainly in offshore. It is a part of OpEx only. Mainly in offshore. Mainly in offshore. Mm-hmm. After getting the repair and maintenance, so we will be then getting by company also to the extent which the part which was surveyed and which has been you know considered as a damaged part because of Tauktae. Okay, got it. From the Vankorneft, is there any indication as to, you know, what kind of dividend are you likely to receive and in what currency, et cetera? I would just like to call our Nirmal Ji from OVL, and he will be the right person to give the reply to this. As far as dividends of Vankor are concerned, the last dividend was, we had already repatriated that, the interim dividend that we have received recently that is lying with our Russian bank. We are working on mechanisms to repatriate that to Singapore, which is where our holding company for the Vankor network asset is based. Because Singapore is presently designated as an unfriendly country by the Russian authorities. We have certain issues with repatriation, but we have received the dividends, and they presently remain in rubles with our Russian bank account. What is the quantum? Quantum. Equivalent of $42 million. Okay, $42 million. Okay. The next question is on this, you know, liability with respect to the Note 4 of your accounts. You have deposited close to some INR 10,000 crore excise tax and GST. Can you talk a bit about, you know, this? You've still recorded it as a contingent liability. What is the risk that ultimately that you'll have to, you know, pay this fully and if you can give more color around the Note 4? Yeah. Yeah. Good morning. Basically, like we have recognized, we have shown a contingent liability of around INR 16,000 crore, and against which we have a deposit of INR 10,000 crore. This deposit basically like we have made, you know, to safeguard ourselves against the interest which can come later on. We are pretty sure of getting this refund from the government because the, you know, the cases which were there at the different high courts, they have not given anything on the law, but they are referred to the Supreme Court special bench. On the legal point, we are pretty sure that we will be getting the refund, and the case will be in our favor. Okay. Lastly, if you can give some guidance on both the oil and the gas production for fiscal 2023 ending on 2024? Oil and gas production? Yeah. We have our projections for that. For the fiscal 2023-2024 and 2024-2025. We'll be happy to note that we are reversing the declining trend of the OMP production. In 2023 also, if you can, for fiscal 2023. Yeah. The actual production of 2021-2022 was 21.707 MMT, which we anticipate to achieve up to 22.823 MMT for 2022-2023. 2023-2024, it will be 24.636 MMT. For 2024-2025, it will be 25.689 MMT. Separately, if you can give the breakup? Actually for the gas part. Yeah. For the gas part, in 2021-2022, we had produced 40.452 BCM of gas. Just a minute. Sorry. 21.680 BCM of gas. In 2022-2023, and we said 22.09 BCM. In 2023-2024, it will be 25.685. In 2024-2025, it is around 27.529 BCM of gas. Okay. That's all from us. Thank you so much, and all the best. We are on the rising trend. Yeah. Thank you, ma'am. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. I request the participants to ask two questions in the initial round and join back the queue for more questions. Next question comes from Sabri Hazarika from Emkay Global. Please go ahead. Yeah, good morning, ma'am. I have two questions. Firstly, an accounting question. I mean, if we calculate the windfall tax per metric ton based on what you have reported around INR 6,400 crore divided by standalone and JV sales. The number comes somewhat lesser than what has been, like, given in the, I mean, in the gazette press release. Is there any adjustment on the same? You mean to say that the windfall tax amount is INR 6,104? INR 400 crores. INR 6,400 crores. INR 400 crore. INR 400 crores. What is the issue? What is the issue? If we divide it with your total crude sales, so it comes something like INR 13,500 per metric ton. Whereas if we take the average from the government website, then it comes to around INR 16,200 per metric ton. I'm just wondering if there's some kind of, like, conversion factors or something of that sort? Adjustment or something. No, this, as explained earlier, like, you know, there are different rates applicable for different periods. Whether you have taken one single rate and done the conversion based on what is there in the government site or whether you have done the actual- No, we have taken average. We have taken average. I think- That could probably be the reason. Secondly, you might be considering averages you have evened out. If during the first 15 days the production may be little more and then adjustment would be there in the later. Okay. Exact calculations may not be in that way very cycle-centric that way. We take it average. Right. This is, like, fully accounting for whatever is there in the- Yeah. In the government thing, right? Uh-huh. Cess has been, like the OID cess has been netted off, whereas the royalty is on the full, gross level. Yes. That's right? Yeah. Something more to add, I think, Mr. Anil Kumar, if you can add. Yeah. Regarding this levy of windfall tax or special additional excise duty, you can see this is a production levy. That was first time it was implemented from first of July. Whatever quantity was available in my storage space, which was produced prior to first of July, there duty was not paid. That's why there is a discrepancy in the working. Yeah. Okay. Got it. Yeah. It's like the inventory sales, which was like produced prior to that and so. This will be on your sales only, right? Not on your production. Because you got like- Excise duty is production levy. It is not sales. Sales tax is sales levy. Sales. This is production levy, not sales levy. It is production. We have to take the crude oil production from there. We have to, like, multiply that. From July. The quantity produced from first July, we have paid the duty. Okay, sir. Got it, sir. Thank you. Second question is relating to your dividend payout. I think historically you have been at the what you call 45% kind of an average range. Last year it was less, but it was because of the taxation why the profit was inflated. Is it fair to assume that we would be somewhere on like 45% kind of payout only considering that the financials of the company has improved significantly? We are under net cash also right now, and I think the CapEx is more or less range bound only at around INR 30,000-32,000 crores. Is it fair to assume 45% payout? I think our Chief Corporate Finance would like to address this issue. Normally what we are doing is we are keeping this dividend payout to be between 40%-55%, and we hope to maintain that depending upon what would be our results in the subsequent quarters also. As of now, we would not be able to confirm whether we are going to keep a particular level. Yes, we'll try to do it, and hopefully we may be able to do it. Yes. Depends upon how the pricing or the oil and gas prices behave and if any levies are there. Minimum would be 40%. That's what you are saying, right? No. No. That is also depending upon what, we have tried to do that. Okay. Normally, yes. Yeah. We can't confirm that it will be. We can't confirm that. First we have to see our CapEx plans and, the actual, profits that will come, that will happen during the next two quarters. Right. Yeah. Thank you so much, and all the best. Thank you. Thank you. Next question comes from Varatharajan Sivasankaran from Antique Stock Broking. Please go ahead. Thank you for the opportunity, ma'am. Two questions. Firstly, when you talk about oil, first oil coming in the month of June. Should I assume first gas is also going to come in the month of May, in which case when will you be doing the auction, and have you worked out the methodology so that last time auction problem is what you faced is not repeated. Of gas. Sir, you are Mr. Bharti, you are talking about auction of gas or crude? Gas. Gas. GG gas. GG gas. Uh. Which will come up. We have Whatever gas is available gas coming that we are auctioning through IGX or mj unction, depending upon the nature of tenure of the contract. Because IGX is pertaining for short-term sales. In case of 98 by 2, there was a premium quoted by different agency. We have returned back to the. We have discontinued the trading. Again, we have subsequently already auctioned the same quantity and we have already finalized it. We are going to clarify that, sir, like, you know, so the first gas is going to come in the month of May in KG Basin? Yeah, yeah. Yeah, yeah. No, no, no. Let me explain. We are already producing the gas from three wells of new fields, and from May 2023 we will be getting the first oil. First oil. Sorry, my mistake. The incremental gas production- That's right. Yeah. Incremental gas production will happen in the month of May, simultaneously along with the oil. Is that right? That's right. Along with the oil production, there will be the associated gas production also. Yes. Very much. In terms of auction, like, you know, are you going to also sell that in the IGX or you have a separate auction for the incremental? Separate auction for what? I think there is separate. You see, in IGX there is condition that you can sell through IGX only 10% of the total production or 500 SPMB. There's a limitation and over and above the IGX, there is a sale for the contract period of three months, maximum three months. Of course, at present we are selling only for 15 days or one month. There is restrictions in IGX. What we have to do is, and we will have to auction it. Yeah. Maybe some quantity we can auction on long-term basis also, then some quantity we can do through mjunction. Or, as this auction will be through mjunction. I guess it's long term. On long term. The potential timing, ma'am, most likely in mid-March or little bit later? It will be in May or so. Increase of the gas. May. May. Okay. Because some associated gas will come and the activity which will be during our fair weather window, so that will also give us the results. No, I was talking about the auction timing, ma'am. Auction planning. He's asking something about auction planning. Auction planning. The question is whether we'll be doing any auction. Is that the question, Varath? Yeah. Will you be doing auction, anyway? What would be the timing of the auction, ma'am? Auction, whenever the gas is available, depending upon once we are sure about the gas and the quantity that we are going to get, which would be closer towards May, we would be carrying out the auction and sell it on the long-term basis through auction only. We are already selling gas over there to HPCL and GAIL. So similarly after auction, we'll sell it to whichever party comes out of that auction. Sure. Thanks, ma'am. My second question was on the update on global assets. Usually, what will be the current update starting with Russia, specifically Sakhalin case? Specifically to Sakhalin? Yeah, Sakhalin. Starting with Sakhalin, of course, an update across all the global assets. Update. Yes, yes. Okay. Our people, they will address this issue. Sakhalin, what is the last information that you have so that I can give you the update accordingly? That I don't- Sakhalin, our information is that the production has gone down sharply, almost down to. Okay. Let me clarify here. The production has not just gone down, the production was stopped altogether. This has got nothing to do with upstream issues. This was basically a fallout of the Ukraine conflict. Because of the Ukraine conflict, the P&I club insurance, which is an international insurance club for all seaborne vessels, especially crude oil vessels. The owner of the Sakhalin-1 consortium vessels came under sanctions, and the insurance was withdrawn. Because of which the vessels could not sail the high seas and therefore there was a tanker situation and production was shut down. Subsequent to that, in Sakhalin in early October, the Government of Russia issued a decree transferring the assets of Sakhalin to a Rosneft-owned entity under a holding structure. An option was given to all the foreign participatory interest holders to exercise their rights, which we have done. We have also received a confirmation, our consent to participate has been accepted. This is the situation as we stand today. The situation will develop further because there are a lot of formalities that need to be completed on paper for our reentry into the Sakhalin project. However, we understand that production has already resumed and we will be getting formal updates of that once we are formally back in the consortium. Is there no incremental concern on the insurance front, so we should look at operator? No. Now that you have to understand that till today, the operator of Sakhalin was a Western oil major who was unwilling to move out of the Western P&I Club insurance. Now that it has been taken over by the Russian authorities, there are multiple options for insurance, including covering guarantees. Russian crude is being delivered all over the world through Russian-hired vessels, and the same thing should be applicable for Sakhalin also. That question is not going to be an issue. Yeah. Thanks. How about the other assets, please? Which assets in particular? We have 35- Mm-hmm. 33 of them. I'll give you the major ones. Vankor is another asset in Russia, which Definitely. As far as production is concerned, it has not been materially impacted for the very simple reason that the Russian national companies, the operator of this project, it continues to produce throughout the conflict. All the inputs are national and within the country, so production has not been majorly affected. There has been some issues with outsourcing of materials due to which there has been a drop in production of around 10%. Given the volumes in Sakhalin, that is not a major concern. The concern exists for us to repatriate the dividends as and when they happen, which I have already informed before. Apart from that, the other major asset would be CPO-5, which in this particular half year is our largest revenue generator and net cash flow generator. This is asset where ONGC Videsh is the operator, and it's also producing from this field. The order of magnitude is around 25,000 barrels per day of oil production. This was virtually zero 3-4 years back. It's a major drill bit success. We will be expanding our operations there, drilling additional 5-6 wells every year till 2030. We hope to reach 30,000-35,000 BOPD by 2030, should everything go well. Apart from that, BM-C-30 and exploratory block in Brazil, we have given declaration of commerciality, and we hope to align connection with the operator, Petrobras, to bring the project online in the next few years. That is a few of the major projects. Very much. Thanks a lot. Thank you. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. I request the participants to ask two questions in the initial round and join back the queue for more questions. Next question comes from Vipul Kumar Shah from Sumangal Investment. Please go ahead. Hi, sir. My question is, when will we reach the peak production in KG Basin, and what will be the volumes when we reach the peak production for oil and gas? Hold on for just a minute. Just wait. Yes, sure. In 98 by 2, we will be reaching our peak production in 2024, 2025, and that will be to the tune of around 45,000 barrels of oil per day and 12 MMSCMD of gas. Would you repeat gas figures, sir, please? It will be around 12 MM, 12 MMSCMD. 12 million standard cubic meters per day. Okay. That gas will be subject to any price ceiling or price revision? This gas from 98 by 2 is getting higher prices as per the price ceiling of the deep waters, which is presently 12.46, and it's subject to revision on a half-yearly. Like, that means ceiling will be 12 point- Presently 6. Yeah. 12.46. 12.46. The ceiling? Ceiling is 12.46. Okay, sir. Okay. Thank you, sir. Thank you very much. Thank you. Thank you. Thank you, sir. Next question comes from Vishnu Kumar from Spark Capital. Please go ahead. Thanks for that. On OVL, just coming, I heard the update that you just gave, sir. Will our production go back to something like 2.1, which we were doing last year in oil, 2.1 million ton we were doing. We're currently at about 1.4-1.5. Can we go back to this 2.1 level, in about a year's time from now? Just wait. Yeah. Like, when you speak about this 1.8 or 2.1, are you speaking about one particular asset? Because in- No, no, I'm just talking about the overall oil production, which was last year doing at a quarterly run rate of about 2.1. We are currently at 1.5 on oil. With the restart of some of the assets you're talking about, can we get back to that level of 2.1? See, you have to understand that, the Sakhalin itself, it used to produce around 2 million tons of oil per year, for 40,000 net barrels to us, O+OEG. That was what got affected due to the Ukraine crisis. As I told you, we do have information of production restarting. However, there are a lot of inputs that would need to go into the field going forward. These inputs would be constrained by the very fact that most of these inputs are provided by Western service providers of the likes of Schlumberger or Weatherford or Baker Hughes or Parker Drilling. Now, to maintain the production at the large levels itself would be a challenge, so I do not expect to answer your question shortly. In Sakhalin alone, from the two levels, we consider ourselves very fortunate if by the end of this fiscal we are able to reach 1.5 MMT, and that is our target for this fiscal. However, the situation is fluid and, as and when the situation evolves, the production should start being shifted in Vankorneft. Understood. In terms of the quarterly financials of OVL, despite the fall in production, our overall OpEx has not changed. In fact, it's gone up by a couple of percentage points. I'm just trying to understand why would that be, because between Q1 and Q2 there is a fall in revenue, but we've not seen a commensurate fall in expenses. It's probably actually higher. You are actually asking about the OpEx? Correct. OpEx, operating expenses. Correct. The reason for that is very simple. In a force majeure situation, we are not able to capitalize many of our expenses, and they actually, you know, get expensed that year itself. This primarily has to do with the force majeure situation in Mozambique. Mm-hmm. Because we are paying holding costs for our orders at hand and also work in progress, this cost actually adds more to the OpEx. We are not able to capitalize this cost. Understood, sir. Just, I'm trying to understand the OVL CapEx for the next, I mean, this year and next year. Is there a number? I mean, if you could just highlight that, what that number would be? See, every year OVL has been regularly spending something like INR 5,000-6,000 crore of CapEx every year. Mm-hmm. Last year it was marginally lower and less than INR 5,000 crore. We will continue to just spend these amounts. This amount is purely for the CapEx for the existing projects and does not factor in any inorganic acquisition that might happen in the meantime. What is the debt at this entity level, sir? The debt at present level? Yes. Four point- Yes. Correct. OVL, $30 billion. Our debt is around $4.6 billion-$4.7 billion. Billions or millions? Millions. Millions. This is OVL. OVL. Got it. Sorry. Coming to the ONGC part, do we expect any CapEx increases next year? You did mention that our end of the year, we said going to take a dividend policy. Our CapEx also has to be considered for next year. Just trying to understand, is there a thought to increase next year CapEx for ONGC? The thing is that, of course, the dividend policy is governed by that, but then we generally have the CapEx level of INR 30,000 crore. Definitely we are into so many MoUs and we are fructifying those MoUs, especially with regard to the green energy. We have to see so what all things we have to take up. We already have MoU with Greenko. We already have MoU with, of course that is with the approval of the government, NTPC also, and then SECI also. We are also having with Equinor. We have to see that. Now recently with the Rajasthan government also. We have to see that how we have to bring that MoU into the, you know, implementation mode and see for certain integration, especially with regard to the renewable energy. That will definitely enhance our CapEx. In case, I mean, some of these MOUs do fructify, what would be the CapEx probably we might have to invest in next two years, three years? I think, the Greenko itself, that is around $4 billion. That is, upstream as well as the, you know, then downstream also. They will be, you know, manufacturing through this electrolysis, process, ammonia and there will be ammonia and hydrogen. All that, total CapEx will be around 4 point- Yeah. $4 billion In the next two years it would be around $1 billion-$2 billion. Yeah, $1 billion-$2 billion. Yes. Current, next 1-2 years. Okay. Today that number is not there, which will probably you'll confirm for next year. If this. Yeah. If you're going to invest this additional INR 1-1.2 billion. Yeah. Yeah. Got it. My actual question was that our dividend policy is between 40%-55%. If our cash flows, additional cash flows allow us, can we go to that 55%? You did mention about oil price, but anyways we are around $75 as a net realization. Gas prices also we are more or less assuming $6-$7 we are there. Can we get to that 55% if this situation continues and our CapEx does not materially increase? Can we get to 55%? Please appreciate that what we have declared is just an interim dividend, and we are keeping an eye on the prices, which are extremely volatile. We may come out with another dividend depending on the realization that we get in the remaining part of the year. On the ultimate payout ratio, we will take a call at the end of the year. Got it, sir. Thank you and all the best. Thank you. Thank you. Next question comes from Mayank Maheshwari from Morgan Stanley. Please go ahead. Hi. Thank you for the call, sir. A few questions from my end. First was related to the marketing freedom on oil that you guys have got, from sometime earlier this year. Can you just talk about have you seen any better pricing and realizations because of this marketing freedom that you have got? Of course. Mr. Mayank, there is a loud background noise, basically, from your end, I believe. Now it's off. I was just talking about the marketing freedom on oil that the government has given for domestic production of oil. Is there better realizations that you have got on the back of this now, and how you're thinking about the next year and the rest of this year itself in terms of discounts that you are kind of giving historically versus now versus the benchmarks? Yeah. Thank you. Thank you. The government has given complete marketing freedom. Pricing freedom was available every year also. The marketing freedom government has given from first of October, and we have auctioned the crude in the month of October end for the offshore, and we have received very good response in the auction process. We have get the premium in addition to regular price, which was March to this Brent plus some markup of $0.50. The premium itself was around. Maximum premium we got in one of the field was $5.5 per barrel, and minimum was $0.05. You see the market, the crude market is very volatile. Due to Russian crude coming in different part of the world, there is volatility. Volatility will continue. We are expecting better price in through auction. Just to kind of clarify this, so the $0.05-$5 premium that you're talking about over Brent, this was earlier a discount that you used to get, correct? Is that fair, of $3-$4? There was no discount. In fact, we see our pricing was linked to a benchmark crude of Bonny Light plus the GPW differential. Now, there's no concept. Okay. of differential, because GPW differential itself reduces the price to the extent of $2-$3 per barrel. That is the net benefit we are getting through auction, because now it is benchmarked to dated Brent. Mm-hmm. Plus premium. Okay, you're getting $2-$3 discount has gone away, plus the premium that you're getting of $0.05-$5.5 odd dollars. That's the range you're kind of getting. Yeah. Yes. Now, is it fair to say? And the, uh- You will cover your premium? Another- Sorry. Mayank, another important point is that the pricing of crude oil, so that is based on the field-wide assay, which we carry out, and that determines with the forecast method. Definitely, once we are into this, definitely we will get a better price also, and that's what we have seen in our this time auction price also. Interesting point, ma'am. Ma'am, is there a number that you guys have in your mind on an overall portfolio basis in the domestic side of a premium that you will be getting on your overall crude assays? Yeah, I think it will be $3-$4 per barrel. It is still pretty mature. Okay. Mayank, what has happened is this is the first auction that we have carried out, and it's for a period of three months only. As the market moves forward and we also come to know about, the process, et cetera, the refineries also get to know the process, we will see how the prices move forward. However, we do expect that we should get a better price than what we were getting earlier on. The amount we would not be able to put a figure on currently, immediately. Got it. Okay. No, that's clear. The second question was more related to your VAP production, especially in Dahej. We have seen that it's not yet come back to the normalized levels we had seen historically. Any update there of when you think things can kind of come back to normal there, or it's the new level we'll have to now assume that is the lower production on Dahej? No. The Dahej production was lower, one, partially because of the high price, LNG. It's based on LNG, and that LNG prices had shot up very high. That was one part of the story. We do expect that we should be, as moving forward and the prices also go down and the prices of the products are better, we would be increasing. Our production should stabilize and should be better than what it has been in the recent past. No technical issues or anything around production. No, no. Apart from this economic point that you're trying to talk about? No, no. There's no technical issue. Got it. Okay. Perfect. Thank you. That's all from my side. Thank you, bye. Thank you. Next question comes from Abhishek Nigam from B&K Securities. Please go ahead. Yeah, thank you. My question was on Mozambique, and you know, there's a that situation is still evolving, and we still don't have clarity on when that project is going to start. Meanwhile, there is a lot of time which got lost. There is a lot more, you know, upstream development that is happening now versus what was happening three years ago. My sense is costs would have also got integrated a bit. In this background, is there a risk of further impairment on that project? That's my only question. You have already detailed out the issues with Mozambique project. However, the situation is not as bleak as you made it sound in the current scenario because there has been significant progress on the ground with regards to the security situation. SAMIM forces and the Rwandan forces have been on the ground for more than a year now. They have managed to clear the majority of the Cabo Delgado province where the operations are taking place. There has been return of the IDPs, the internally displaced persons, and also the authorities have taken over and situation has resumed. We, the consortium and the operator are very hopeful of resumption of construction operations in H1 of next calendar year. That is what TotalEnergies is envisaging, so we should see significant effort on the ground. As far as segment is concerned, we haven't taken anything for the Mozambique project for the present H1. We will review the situation again during our annual accounting process next year. No worry. Thank you so much, sir. Have a great day. Yeah. Thank you. Because we are running short of time now, can we have last two questions, please? Sure, sir. Next question comes from Hemang Khanna from Nomura. Please go ahead. Hi, sir. Thank you for taking my question. Sir, you had earlier mentioned about the volume numbers for 98 bar two. Could you please also help us with the FY 25 numbers, how you are looking at that? In relation to that, could you also share, you had mentioned that earlier, but what is the peak volume for oil and which year is it expected? I miss that part, please. I think I had already mentioned for FY 2025, our oil production envisage is 2.178 MMT, and gas is around 3.831 BCM, and we envisage the peak production in the financial year 2025 to the tune of 35,000 barrels of oil per day and 12 million cubic meters of gas per day. Got it, sir. Thank you very much. Sir, lastly, I know, obviously, the situation is still fluid given the geopolitical issues, but what would your sense be for OVL production for FY 2024-25? For FY which? FY, financial year 2024 and financial year 2025. We were producing a little over 12 MMTOE for the past couple of years, and we had planned to maintain the same going forward. However, in the present year, as you know, Sakhalin has stopped production since April, and that has majorly impacted our production. Apart from the flood situation in South Sudan, which has been offset due to our increase in production from Colombia. Given the issues in Sakhalin, we would be aiming at something close to 10 MMTOE of O+OEG for this financial year. For the next two financial years, it will be not the correct time to estimate. We hope to maintain 12 MMTOE of production should Sakhalin come back to its original production as it was in time of April 2020. Got it. Thank you so much, sir. Thank you for answering the questions. Thank you. The last question comes from Mr. Sumeet Rohra from Smartsun Capital Private Limited. Please go ahead. Thank you, madam. Hello, hello. Good afternoon to ONGC team. Ma'am, I would like to, you know, just, get your, sense on, you know, how do you basically see, you know, the government's approach towards, you know, the windfall tax? Because I mean, if I understand correctly, you know, the government has always mentioned that, you know, when crude prices go below $80, you know, it's something that they will consider to withdraw. Ma'am, you know, crude is basically now holding between 90 and 100. You know, so effectively, is my understanding correct that basically for a matter of $10 or $15, I mean, the entire governance and transparency which was there in the oil and gas sector is now seized because of $15? I mean, technically, you know, I mean, the reason I ask you this is because we have investments in downstream as well. You know, the thing is that what's the thought process of the government, right? Because effectively, it's only about a matter of INR 5 or INR 10 of diesel, you know, which is basically the under recovery. What is the thought process of the government, madam, in terms of the oil and gas sector? I think government is quite supportive. That is what we have seen in the last 2-3 months since this levy of this additional excise. Although we have written to the government that please withdraw this levy because we have our CapEx plans also, and we require the funds with our cash flows. This is the time when we can you know compensate for the other CapEx projects also. We can do aggressive exploration. Although they are seized of the matter, but at the same time since it is governed by Ministry of Finance, definitely government is in a balancing situation. Because you know that recently this INR 22,000 crore has been given to the downstream also out of this windfall tax only. That is what they have to balance it out. Even with the levy of this additional excise, our position is quite comfortable. That's what you have seen in yesterday's financial results also. It is quite comfortable. Correct. No, but, madam, I mean, if I can just ask one thing here. See, I mean, you know, the thing is that all companies, whether upstream or downstream, you know, all have got CapEx plans, right? Everybody needs to invest. My only, you know, humble point here is that, you know, just for a matter of INR 5 or INR 10 of diesel, you know, I mean, does it make economic sense to, you know, hurt the economic interest of the oil and gas sector? You know, because, I mean, valuations have completely got distorted, right? I mean, whether you look at it in terms of, you know, whichever company is in the oil and gas. Even if you take ONGC's case for example, I mean, you know, when ONGC used to make half its profit, it was valued at twice the market cap, right? Effectively, you know, valuations are getting hurt by this kind of, you know, interference by the government, right? Because on one side they are raising gas prices, but on the other side, they are not raising the fuel prices. I mean, you know, it is totally contradictory, right? My humble request is, can you know, get some clarity please? You know, hopefully by the next call we have. We will definitely. We are already in communication with the government, and we will continue taking up with the government in this regard. We will try to set off or set, you know, these concerns of our investors also to some rest. Yeah. Because, I mean, madam, you see Saudi, you know, has, by cutting production, is, you know, defending $90 in oil. If they continue to do that for the next several years, I mean, you know, the governance in this space can't be restricted because of, you know, $15 of crude, right? You know, I mean, I think really you should intervene in this, you know. Sure. We will definitely communicate. Yesterday also in the our board also, our government nominee was there, so he is seized of the matter, and he is also very supportive. We will continue doing that. Okay. Thank you. Thank you so much, madam. Thank you. Thank you so much. Think about your investors. Thank you, madam. Yes. Mm-hmm. Thank you. Now, I hand over the floor to Mr. Tongaonkar, Executive Director, Chief Corporate Finance for closing remarks. Yes. Thank you very much. On behalf of ONGC, we would like to thank our investors, analysts over here for taking this call. We hope that we have been able to take care of the issues that have been raised by the investors and analysts. We hope that in future also we'll continue to meet on whenever we have our results. Hopefully we should have good results in the future also. Thank you so much. Bye. Thank you. Ladies and gentlemen, this concludes the conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a pleasant day. Thank you, madam. Thank you, sir.