Your conference is being recorded. Good morning, ladies and gentlemen. I'm Pelcia, moderator for the conference call. Welcome to ONGC's Q2 FY24 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 the listen-only mode, and there will be an opportunity for you to ask questions after the opening remarks. 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, ma'am. Thank 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 two and six months financial year 2023-2024. Thank you all for joining us on the call. I am joined here by my colleagues, Mr. K.C. Ramesh, Chief Corporate Finance and Accounts; Mr. Anil Kumar, Chief Commercial; Mr. D. Adhikari, Chief BD and JV, ONGC; Mr. Pavan Aggarwal, Chief Corporate Planning; Mr. B.R. Subudhi, Head Finance- Head Corporate. Head Corporate Accounts; Mr. Vinod Hallan, Head Finance, ONGC Videsh Limited; Mr. Mukul Bhatnagar, Head Planning and Strategy, ONGC Videsh Limited; Mr. Prakash Joshi from Investor Relations and Corporate Section; and Mr. Frank from ONGC Videsh Limited, heading the Corporate Accounts. ONGC has compiled its financial results for the quarter and six months ended September 2023, which have been reviewed by the statutory auditors. The financial results released on tenth November 2023 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. The company has earned a net profit, that is profit after tax, of INR 10,216 crore during the second quarter of financial year 2024, as against INR 12,826 crore during the second quarter of financial year 2023, a decrease of INR 2,610 crore, that is 20.3%. The profit after tax for H1 financial year 2024 has decreased by INR 7,801 crore, that is 27.8%, from profit after tax of INR 28,032 crores in H1 financial year 2023 to INR 20,231 crores in H1 financial year 2024. The decrease in net profit during quarter two financial year 2024 and H1 financial year 2024 is on account of lower sales revenue, mainly due to lower crude oil and wax price realization, then provision of GST on royalty and lower dividend income. The sales revenue for quarter two financial year 2024 and H1 financial year 2024 has decreased by INR 3,198 crores, that is 8.4%, by INR 11,688 crores, that is 14.6%, as against the corresponding quarter and H1 of previous year. The billing that is net of value-added tax / CST for crude during the second quarter of the current fiscal was at $84.84 per barrel, as against $95.50 per barrel in the same period of last year. That is a decrease of $10.66 per barrel. The exchange rate of the rupee versus the dollar stood at 82.66 rupees, vis-à-vis INR 79.81 per dollar. Thus, realization for crude in rupee terms stood at INR 7,013 per barrel in quarter two financial year 2024, vis-à-vis INR 7,622 per barrel in quarter two financial year 2023. That is a decrease of INR 609 per barrel, that is 8% in INR terms. Similarly, gross billing for crude during the first six months of the current fiscal was at $80.56 per barrel, as against $101.99 per barrel in the same period of last year. That is decrease of $21.43 per barrel. The exchange rate of rupee versus dollar stood at INR 82.44, vis-à-vis INR 78.55. Thus, realization for crude in rupee terms stood at INR 6,641 per barrel in H1 2024, vis-à-vis INR 8,011 per barrel in H1 financial year 2023, which amounted to an increase of INR 1,370 per barrel in INR terms. The expenditure on statutory levies, that is royalty and excise duty, have decreased during quarter two financial year 2024 by INR 3,841 crore in H1 financial year 2024, by INR 7,004 crore, that is 27.7%, in comparison with the corresponding similar period of previous year. This decrease in statutory levies is attributable mainly to decrease in sales price of crude oil 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, in short form, on crude, which have been levied with effect from July 1, 2023, which amounted to INR 6,472 crore in quarter two financial year 2023, and INR 33,352 crore during quarter two financial year 2022. There is decrease of INR 1,478 crore in exploration costs written off in quarter two financial year 2024, and INR 971 crore in H1 financial year 2024, versus corresponding quarter and half year period of the previous year. This decrease is mainly due to company charging off exploratory wells amounting to INR 2,140 crore lying in the fields, falling under the contract areas offered under discovered small fields Round three, that is DSF Round Three by DGH, and awarded to the winning bidders during the last year. The operating expenditure has increased by INR 845 crores, that is 16%, from INR 5,267 crores in quarter two financial year 2023 to INR 6,112 crores in quarter two financial year 2024. The increase is mainly on account of increase in consumption of materials, that is INR 308 crores, mostly at the Hazira C2-C3 plant. On account of increase in purchase quantity of LNG, then work over operations, INR 54 crore, mainly at KG 98/2 block. Repairs and maintenance, that is INR 44 crore. Power and fuel by INR 62 crore, mainly at Western onshore assets. Water injection at INR 89 crore. And transport expenses by INR 46 crore, mainly at Mumbai offshore due to increase in activity and the corresponding rates. Similarly, the operating expenditure in H1 financial year 2024 has also increased by INR 1,419 crore, that is 13.3%, from INR 10,661 crore in H1 financial year 2023 to INR 12,080 crore in H1 financial year 2024. The increase is mainly on account of increase in consumption of materials, that is by INR 569 crore, mostly at the Hazira C2-C3 plant, on account of increase in purchase quantity of LNG. Then contract payment that by INR 185 crore, mainly at KG 98/2 block. Then repairs and maintenance by INR 222 crore, then power and fuel by INR 78 crore, mainly at Western onshore assets, then water injection by INR 129 crore, and transport expense by INR 34 crore, mainly at Mumbai Offshore, due to increase in equity and the rates. Depreciation, depletion, and impairment costs, that is DD&I... DD&I costs for quarter two financial year 2024 and H1 financial year 2024 stood at INR 4,715 crore and INR 9,706 crore, as against INR 2,595 crore in quarter two financial year 2023, and INR 7,105 crore during the corresponding period of the previous year. This increase is due to reversal of impairment last year on certain discovered small fields of the company, falling under 10 contract areas, which were awarded by DGH to the winning bidders. The company, at a consolidated level, has earned a net profit, that is profit after tax, of INR 16,553 crore during the second quarter of financial year 2024, as against INR 6,830 crore during the second quarter of financial year 2023. That is an increase of INR 9,723 crore, that is 142.36%. Similarly, the company, at a consolidated level, has earned a net profit, that is profit after tax, of INR 33,936 crore during H1 financial year 2024, as against INR 15,411 crore during H1 financial year 2023. That is increase of eighteen thousand five hundred and twenty-five crore, that is 120.21%. This increase in profit can be mainly attributed to our subsidiary, that is HPCL, MRPL, and OVL. You will be happy to note that board has approved interim dividend of 115%, that is, INR 5.75 on each equity share of INR 5. The total payout on this account will be INR 7,234 crore. Well, friends, with this, I finish my briefing of the second quarter results for the financial year 2023-2024. We will be, we will be very happy to take questions from you. We will request you to restrict your queries on financial results only. Thank you. Thank you, ma'am. 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. First question comes from Sabri Hazarika from Emkay Global. Please go ahead. Yeah, good morning, good morning, ma'am, and I have, like, two questions. The first one is relating to KG 98/2. So I think there's a news, just couple of days before, where director production has stated that the asset is almost ready and first oil should be expected soon. So just wanted to know any particular date, or when date when we are expecting the production of oil to commence, and whether the target for gas ramp up to 89 MMSCMD by May, June 2024 is like, that is also final? I think, Mr. Pavan Aggarwal, he is our Chief Corporate Planning, so he will answer this query. Mr. Pavan? I think good morning all. With respect to KG 98/2, you are very right that the oil production first start from the 98/2 is expected very shortly. The pre-commissioning activities are already ongoing in full swing, and we expect the first oil to be there in this month itself. Further, with respect to the ramping up of the gas production, still we have got the plan for the installation of the process platform in April. And so that we should be able to increase our gas production from the field by May, June 2024. Okay, sir. Just to follow up, this oil production, oil production from KG, if you like- Sabri, you are trying, I think you should mute. There's some sound. We can't hear you. Echoing. Some echo sound. Right. Yeah. Is it clear now? Yeah, it's clear now. Yeah. Yeah, and secondly, I just wanted to know if the windfall tax will be applicable in this 98 by 2, or being nil, it is out of the windfall tax regime? In the net block, there is no windfall tax. Okay, so you will get the current market price, in this, in this block, whatever is prevailing without any SAED in this, right? No. Okay, sir. I'll revert back. Just, we'll confirm and come back to you. Yeah, yeah. Sabri, for this. Okay, sir. Yeah, and second question is regarding this premium gas pricing for new wells. So, is there any update on the same with respect to the modalities being finalized by the DGH committee? I think that 20% premium is applicable on the new gas for the gas from the new well and the well intervention in the nominated field. Right. Right. I'm talking about that only. So there was some, I mean, it was supposed to happen in six months from the date it was announced. So by now, I think. Is there any update on the same, I think? I think the policies, some, you know, communication will be coming soon, and some policy will be made in this regard, but the DGH has already submitted its report to the ministry. Mm. To the ministry. So they will be coming up now with this, final guidelines on this. But, as already stated by Mr. Pavan, the 20% increment is there on the, on the- On the gas nominated. Gas on the nominated fields, and that 20% is applicable for the domestic price, na? From the Indian basket- Indian basket. For the Indian basket price. Got it. So, you are saying right now the DGH has already submitted a report, and it is with the ministry for consideration. Yeah, yeah, yeah. Is that right? Yes, yes. Okay. O- That's what it is, our understanding. Okay, ma'am. Thank you so much, and all the best. Thank you. Next question comes from Abhishek Nigam, from Motilal Oswal. Please go ahead. Yeah, hi. Thank you so much for the opportunity. Ma'am, first, if you can, you know, just reiterate the production targets for 2024 and 2025 for oil and gas, for ONGC and OVL. That'll be very helpful. I think, with respect to the ONGC production, the ONGC standalone production, in the last financial year of 2022-2023, was 40.21 MMTOE. During the current financial year, we expect to maintain that number or slightly increase the numbers by around 1%. Moving forward to the next year- Yeah. hope to increase our production by 4%-5% over the numbers of 2023, 2024. Okay. 25% over FY 2023? 5% over FY 2024. 20%. Okay. Oh, okay. And so overall, if you can just, you know, repeat it. Yeah. For ONGC Videsh, for FY 2024, our production target is 10.68, which is 5% down compared to 2022-2023. And for 2024-2025, our target is 11%, and the next year is 11.22%. Okay. Thank you so much. And, second question, if you can just give us, you know, the CapEx guidance for 2024 and 2025? CapEx guidance. CapEx guidance. So you see, actually it stays in the range of 30,000 or so, but in the current year, we expect to increase it by 10% for the current year and the next year. Okay. Okay. Thank you so much. I'll come back to you. Thank you. Thank you. Next question comes from Kirtan Mehta, from BOB Capital Markets. Please go ahead. Thank you, sir, for giving this opportunity. Couple of follow-up questions. In terms of the KG 98/2, would you be able to share our production targets for oil and gas separately for FY 2025? Pavanji. Mr. Pavan is answering your query. For the FY 2025, we will be starting the financial year with the... When we start the first term, we will be starting with 10,000 barrels, which will be gradually ramping up to 45,000 barrels sometime in 2024-2025. And we will be also increasing our gas production to around 10 million cu m per day in the next financial year. So in terms of the oil and gas, we hope to increase the achieve our production numbers of around 1.5 MMT, 1.5 MMT for oil and around 2 million cu m for gas. This is for FY 2025, correct? That's right. Thank you. Just one more follow-up on the 20% premium for the gas field. So how is the mechanism envisaged? Would it be on any incremental production that we do out of nominated fields, or would it allow for sort of adjustment of the decline rate, and then sort of look at the incremental production? Let's wait for the policy. Let's wait for... But I think what you mentioned is right. It will be incremental production for the well intervention only. For the new well, it will be whatever the gas production is there, that will be accounted for. And for the well intervention, it will be the incremental over the after accounting for the decline rate. It shall be that way. But let's see how the policy comes through. Right. Just one more question on the exploration targets for the second half of the year. Which are the key wells that we are targeting during the second half? Wells? We have got our exploration ongoing in the Mahanadi Basin. We have got our focus areas in the Western Offshore, and we have also got a focus on this Assam-Arakan Basin. Then few of the exploratory wells are also planned in the Bengal Basin and the Vindhyan Basin, where there is a new basin; these new basins have been added. Sure, sir. Thank you. Thank you. Next question comes from- Just before, madam, you go for a question, we just wanted to clarify the CapEx is applicable on NELP block also. Hello? Carry on, ma'am. Okay, sir. Thank you. Next question comes from S. Ramesh, from Nirmal Bang Equities. Please go ahead. Good morning, and thank you very much. Can you hear me? Yeah, you're audible. Yes. Yeah. So, if I may just, you know, dwell on the KG gas and this incremental gas price, what is the current CapEx incurred as on date, and, what will be the final CapEx on KG gas? And when do you expect, KG gas operation to generate positive EBITDA? Will it be from FY 2025 itself, or will it take one or two years? So, Mr. Ramesh, how about- We have already, as you know, substantial part of the KG investment, we have- We have already- Whatever that we have committed, we have already done. So around INR 26,000 crore is what we have already spent on this. So the balance amount, actually, various, you know, the project finalizations are under focus now. So once it is done, as you know, it is around $5 billion is what the total project cost is. So the balance part is yet to be finalized, but maybe another- By next year, basically the- You'll get the exact number, yeah. Yeah. This is milestone-based payment, and in the current year, for the rest of this part of the year and in next year, the entire payment will be made as per the milestone. ... This will be completed by 2024, 2025. Okay. So in terms of the contribution from KG to your PNL, when do you expect to see that happen? PNL? To the PNL. Okay. So as sir told, the peak oil and peak gas is expected in 2025. Okay. Oil production is already planned to be started, like by end of this month, as Mr. Pavan was saying. Okay. So the production numbers will start up from November, and the revenues will start in the beginning, and then it will peak in the next year. Okay. The next couple of thoughts is, when you talk about the 20% premium on gas prices from the nomination blocks, do you expect some benefit from that in the second half, or say in FY 2025, based on your current production plan, in terms of the well intervention or additional wells being drilled? What is your thought process there? I think we are just waiting for the policy to come in. Since the launch of this new gas pricing policy on sixth April 2023, we have already accumulated the gas from the new well and well intervention. By the end of this financial year, we shall be having around 2 million cu m per day of the gas from this this category. We are just waiting for the policy to come. Okay. So on OPaL, I know there are two things. One is, what is the first half result in terms of revenue and profit? And there are some news that ONGC is going to increase its equity stake from 49% to 95%. What is the status of that, and how do you see the OPaL operations progress in the coming, you know, quarters? So I think Mr. Adhikari, he is our Chief BD & JV, so he will be answering this query. Mr. Adhikari. Hi, thank you for your query. OPaL is having some, you know, distorted capital structure, so ONGC is trying to correct it. So in that regard, ministry had advised expert committee to be constituted. As per the advice of that expert committee, which is headed by a former secretary of Government of India, our board has submitted some recommendation, which is there in the media or in the stock exchange, submitted. About INR 18,365 crore additional investment has to be done to correct its capital structure. We are also approaching the government for allowing us to use our new gas, that is the gas from the new wells and from the well intervention for the use of this replenishment gas. So that amount, as Mr. Agarwal has already said, that will be about 2 MMSMD by the end of this year. We are requesting MoPNG to consider our plea, that if they allow us to inject this, implement this new gas for OPaL plant as an exception, because this plant is, you know, strategically very important for the state of Gujarat as well as the country, because it has already, you know, generated about employment in that area of more than about 200,000 workers, and it has attracted investment in the Gujarat PCPIR region, the PCPIR region, about 100,000 growth. Strategically, it is ONGC is trying to, you know, infuse some capital so that it becomes sustainable. In this current year, OPaL is not expected to make any profit. It's EBITDA, its PAT will be definitely negative. Even EBITDA will also be negative, expected to be negative. But however, once this approval comes from the government, that is, Cabinet, because this talks about an infusion of more than INR 5,000 crore now in OPaL, so OPaL will be turned around, and it will be made profitable by FY 2025. So when you talk about turning it around, is it based on the current spreads in the petrochemical industry, or are you expecting any improvement in the petrochemical spreads? The current, for the last six months, the price has been extremely depressed, and this trend- Yeah ... is expected to continue for another six months or so. Okay. We have factored in that price, and even we have factored in a little bit of up cycle from 2025 onwards. So till that time, till, I think mid of 2025, this depression, depressed petrochemical product cycle is expected to continue. So that has been factored into this, financial model. Thank you very much, and wish you all the best. Happy Diwali to all of you, and I'll come back with you. Just one thing I would like to add is that although our, you know, share will be increasing to 96%, but we are, you know, proposing this, that in the, you know, period of once it gets turned over, and we will like to have our strategic partner in this. Yes. And again, we will come back. We will retain the JV characteristics of OPaL very soon. Okay, thanks a lot. Appreciate that. Bye. Thank you. Next question comes from Vishnu Kumar from Avendus Spark. Please go ahead. Thanks for the time. So just wanted to understand the production you mentioned for 2025 incremental will be 1.5 million ton of oil and 2 BCM from gas, for 2025? ... Yeah, that's right. Additional. This incremental, mostly it is, I'm assuming it's only KG with some reduction in the base field. So how should this appear, let's say, in 2026? But when you also mentioned that, the KG, only FY 2020. Yeah, in 2020, in the FY 2026 also, we anticipate to maintain the same numbers. So the decline curve from KG is not very steep. It is going to be pretty very normal only. Or rather, how much should we expect the decline curve for this new KG once it starts producing? And since you mentioned only calendar- I think let the well start producing, because whatever you do earlier, it's only a model. But let the well start producing, let us see its performance, then we can work out on its decline curve analysis and the future predictions. But it is not a very fast decline, like a 30-40% dip in year two or year three. It is just going to be very nominal. No, no. 30%-40% decline, like, is not we are. We do not hope that those numbers. We are. It may be a conventional numbers, what we are hoping, and which has been modeled, but let us wait and watch once the wells are put on production. Understood. And secondly, just to understand the net back of the new project. One, you mentioned the realization will be capped at $75. It's also part of this SAED and since your realization will be around capped at $75. Is that right? Hmm. You see, that is the question, because if you see the recent trend, every 15 days, government has come out with this SAED. Then we have seen a realization something around 35%-40% down. And this is for net block also. Okay, got it. And how should we look at the net back on a per barrel basis? Or rather, if you could just help us understand the statutory levies that will be coming from for the, for this production. Is it very different from the old, or how should we look at it in terms of sales, in terms of the royalty rates? Or just to explain the statutory levies on this. For a NELP block, the SAED? No, no, royalty sales rate, basically. Hmm. You see, for NELP block, as far as crude production is concerned, royalty rate is, if it is offshore, then it is 10%. For onshore, it is 12.5%, but this is, this block, I think 98/2, we are talking about 98/2, is located- This is at 5:30. Is 10%. But, it's- Half. But if it is depth is more than 400 meters of water depth, then it is 5%, 0.5%, 50%. In that case- For seven years. For seven years, it will be half, and then it will be restored to 10. 10% Yeah. There is no sales. There is no- In NEL block. Understood. So basically, your royalty rate is only be 5% for the first seven years? Yes. Yes. For gas also, it will be the same or it will be different? Royalty rate is 10% for gas also. And same half. Same, same 50% for first seven years. So technically, for both the oil and gas production, realization will only pay 5%. That's the only statutory levy that we have to pay. And, on a per barrel OpEx, is it going to be materially higher versus your current existing production? OpEx? Yeah, this, this being offshore, obviously, the cost of production would be much higher being deep water as compared to the onshore or the, you know, shallow water in the Western Offshore. So obviously, it's going to be a little more. Any rough Ramps of the cost of production, because of volume, it will be less. When the person ramps- Yeah, obviously, the per unit cost would depend up, also depend upon the volume. So if the, depending upon what volume that we get from there, this would be further down. How much... So steady state, when, once we reach the desired numbers, what will be the per barrel costing for OpEx? So you see, the majority of the cost would be for this FPSO. Hmm. Yes. That's about $700,000 per day is the operating cost, $700,000+. That is $609,000 plus GST of 18%. So that would be the substantial part of the OPEX as far as the 98-barrel is concerned. Okay. Got it. Secondly, on the projects that... I mean, in the past, I think six months ago, there was a lot of news articles stating that you would be tying up with some international companies for further exploration and developmental activities. Just to understand, like, after many years, you brought KG D6. Do we have a pipeline of many such projects so that we can, at some point, I mean, we are probably going to reverse our production next year decline. So do we have a series of projects that can keep coming over the next couple of years, where we might see the production decline curve probably leading to a growth over the next three, four years? Steadily over the next meaningful timeframe. I think there are a number of projects, which are in pipeline, and I think 8-10 projects, worth around INR 25,000 crore, are under a tendering process. Which will be awarded shortly within this financial year. They will be under construction during the next financial year. We will be taking a few wells for the drilling under the development plan. Like, I can just mention that Mumbai High Redevelopment Phase 5 is under tendering. Daman Upside Development Project is under tendering. Additional development of North Tapti, development of Cluster 9, the redevelopment of Lanwa in Mehsana, Polymer EVA project in Becharaji, Mehsana-...The development of WO-16 cluster that is already going to be completed during this financial year. So there are the number of projects are there, which are already under tendering. Many are under the conceptualization, and will be coming under further tendering during this, by the end of this financial year. So that's the hope that we have got from these projects, which will be not only able to arrest, but also reverse the declining trend of the production. I'll put the question differently, sir. So we are doing about 21.5 MMT of, I mean, production of crude, and let's say if you add the another 1.5, which you're mentioning, pro-25 will be hit, 23. If you go back probably 2017, 2018, 2019, we were doing 25 million ton of oil. So, if we take up all these projects gradually over the next two, three, four years, can we go back to 25 million ton of production, or that will be too ambitious? No, you say, what you are saying will build more. So that obviously is our aspiration to achieve those numbers of around 25 MMT of oil, which currently we are producing something around 20, and with the KG 98/2 will be touching something around 22 the next financial year. And let's hope how that well behave and because we have got stress on the exploratory activities. And we hope some new good discoveries comes on the way. And after this release of the no-go area by the government of India, around 1 million sq km has been released, of which around 0.2 million sq km may be coming under the OALP bid round nine. So there we are bidding aggressively. Mm. We also have a great hope from those areas. So let's see how this comes through, how the exploratory activity goes on, and inshallah, if we get some good success, we should be able to touch 25 MMT in the near future. Just one final on the CapEx, you mentioned that against the INR 30,000 crore-INR 35,000 crore range, we'll have a 10% increase from the current numbers. Is that right? No, no. Current numbers are 30. Okay. It could be something between INR 33,000 crore-INR 35,000 crore. INR 38,000 crore-INR 35,000 crore. INR 35,000 crore. Yeah. We were talking about possibility of a $1 billion plus in terms of renewable investments. At present, that is unlikely to happen, is that right? At least forcibly next FY 2025 also, we will not include that in the CapEx. Yeah. I think recently news, there was one PTC, which, PTC Energy. I think, sir- Renewables, actually, we are targeting INR 100,000 crore by 2030. As Mr. Adhikari, he can supplement this investment with respect to renewables. Yes. In renewables and new energy front, we are working very seriously, keeping our, you know, vision of achieving carbon neutral in scope one and scope two by 2038, and also to create a significant or good amount of renewable energy portfolio by 2030. Our target is to create a portfolio of about 10 gigawatt by 2030. Currently, recently, we have attempted to acquire one company that is PTC Energy Limited, that we have been selected as the H1. Or, now the process is still on, and it is not finalized as of yet. We are, we are also trying to, we are also exploring few other merger and acquisition prospects or projects. So, we're keeping the target of achieving 10 GW by 2030. So far, our this PTC Energy Limited, which is having a portfolio of 288 megawatt, is expected to be added in our kitty by end of this year. What will be the investment, sir, in this? Here we have its investment will be to the tune of INR 900 crore +. Okay. Yes. Got it, sir. Thank you. Thank you. Thank you, Vishnu. Thank you. I request the participants to restrict to two questions in the initial round, and join back the queue for more questions. Next question comes from Karthik Solanki from Nuvama. Please go ahead. Hello? Hello. Hello, Karthik. Yeah. So just want to understand, the OPaL production for the half, half year. If you look at the production, you know, much higher, and if you look at the sales, sales is, you know, down. So what will be the reason for that? You know, in the case of OPaL, as far as the production is concerned, it's targeted 5% higher as compared to 2022, 2023. 2022, 2023 actuals were 10.17, and this year our target is 10.68. Yes, you are correct that the sales volume is down. That is mainly because of the Sakhalin, which we are waiting to get on board the project. The Sakhalin sales is not in the- Just hold on. Yeah. That is explained, actually, Sakhalin volumes are not included in the sales quantity. In on volumes. Okay. Okay, and just want to understand on the windfall tax. During the quarter, you know, the windfall tax was much higher, so, you know, just want to understand, is there any adjustment towards the inventory or some other reason to it? ...Yeah, there is, in the valuation of the inventory also, we do make the adjustments with respect to the, windfall tax. So, that is the reason. Otherwise, if you see compared to last year, Q2, the windfall tax is, much lower. Last year was much higher when we started with, almost, you know, around $38 per barrel. That was INR 23,250 odd, to begin with. Now it is, much less, but because of the higher inventory and valuation there, it is, more. Sure. Thanks a lot. Thanks. Thank you. Next question comes from Samir Arora from Helios Capital. Please go ahead. Hi, sir. Very good morning to you. Very good afternoon. Firstly, I would like to, you know, wish you and your team a very, very happy Diwali, you know, and... Thank you, madam. Thank you so much. Okay, so ma'am, you know, I will not touch upon a few things, because as, you know, but just if I can understand correctly, the production decline, which, you know, we were basically facing over the last couple of years, has now ended, and now basically we are on a growth path on the production of oil and gas on a combined basis. Is my understanding correct now, ma'am? Perfectly correct. Perfectly correct. Okay. Ma'am, now to basically just touch upon this point as an investor, you know, you guys have done a, you know, wonderful job, so many congratulations on that. But ma'am, you know, just one thing, you know, I would like to bring to your and your team's attention is that, ma'am, you know, today there is a complete disconnect between, you know, valuations, because today ONGC is the cheapest company globally in the E&P space, okay? And today, I mean, if you look at it broadly, you know, without getting into exact numbers, you know, our market cap is about INR 250,000 crore, right? And you have done a profit of about INR 32,000 crore on a six-month basis. So, you know, I mean, in terms of, you know, numbers, you know, there is clearly a gross undervaluation in market cap of ONGC, because our book value also is about INR 250 a share. So ma'am, you know, why don't the board, you know, now, you know, consider, you know, going in for aggressive buyback, you know, where the government of India does not participate and, you know, effectively increases, you know, its stake? You know, because, I mean, we are trading even in this environment, you know, at a 3-4 PE valuation, and, you know, we are 20% below book value. You know, so, you know, so we can actually, you know, build, you know, investor wealth and ultimately it benefits the government of India only, right? Because, I mean, today, if you go to see our group company, HPCL as well, you know, we bought into it at INR 480 a share, and, you know, today their performance also has been exemplary, wherein, you know, their performance has also doubled in terms of physical performance and financials. So, you know, as a, as a group, today, you know, we have so much of value on the table, which we can build. So, ma'am, I really would humbly request, you know, if you can consider a buyback, not only for you, but also for the entire group, right? Because there is clear value on the table for the investors, you know, ma'am. See, our subsidiaries, so they, they are investing, and that, that is making an impact on our financials also. And you might have seen that the consolidated profit also, you will be happy to note that, there has been quite a jump in the consolidated profits. So as regards buyback is concerned, because this is not the stage we... You know, there are so many other options are there, and the government is considering certain few other options also. So it is not necessary that buyback is the only option. So it is not, it is not ruled out also, so we will have to wait and watch. As regards our pricing is concerned, so you will also understand the price is picking up. It is not the cheapest company. Today, the price has crossed $200, and there is an increase of almost 40% if you consider the time this price was in November last year. Yeah. Yeah. No, madam, I mean, we clearly appreciate. But I'm just saying purely on valuation metrics, you know, you are trading at sub-four PE. You know, so I mean, in terms of... Because ultimately a company is always valued on its earnings potential, right? So your earnings is growing. You know, so I'm just highlighting that, you know, I mean, you are, you have done a wonderful job, you are doing a wonderful job, but, you know, the market should also, you know, realize that and, you know, you should get your due credit, right? So that's the only point I'm trying to say, ma'am. Yeah, yeah. Yeah, see, you know that we have been a very good dividend-paying company, and we have been paying a, extremely good dividend for past many years. Now, with the given, you know, circumstances, as ma'am was saying, that we need to take a considered call, considering all aspects, whether to go for a buyback or whether, you know, the investment that we are going to make further in, subsidiaries or other, other than, you know, the core business. So, we need to take a call based on the cash flow that we have currently having, and, it's a, it's a call, we have to take, how much we need to borrow and what kind of situation we want to be in later. So it's not that, you know, currently, buyback is the only option. Sure. Understand that. Thank you so much, and wish you all the best for a wonderful future, sir. Thank you, ma'am. Thank you, Sumit. Thank you. Thank you. We have a follow-up question from Abhishek Nigam, from Motilal Oswal. Please go ahead. Yeah, thank you so much for the opportunity again. So my question is regarding the Russian assets. So, you know, there's been a tussle, and you are currently not reporting production and profits from those assets in your financials. Is there any visibility on when the situation will get resolved and those assets formally again get transferred to you? In case of Russia, we have three assets and, we are reporting production for all the assets. ... in India, Vankor and Sakhalin. And as far as Sakhalin is concerned, we are very aggressively, actually going ahead, and hope to very soon get the shares allotted in our name. Last week, we had made an application to the Russian Federation to consider receiving the abandonment funds in the ruble currency. So we hope to get a decision very soon on that. We have also concurrently approached the SBI, asked SBI to approach the Central Bank of Russia to tell us that there are no constraints in actually borrowing in rubles. Because the abandonment funds, which we actually secured back from the J.P. Morgan, those are in USD and are not available actually to be sent for meeting the abandonment fund obligations. So we hope to very soon, and we are very aggressive in this now, and we expect this to be closed very soon. Okay, okay. So that's very useful. And second question is, my understanding is with the, you know, the operating profit from these assets, you are just putting into a fund and not, it is not part of your regular OVL financials. So is it possible to let us know how much accumulated dividend is there in that, in that fund? I think you are talking about the Vankor dividends which we have received. Yes. Due to the unfriendly jurisdiction, Singapore with Russia, we have not been able to repatriate the dividends which we received in Russia, and they are lying there. So the dividend is around RUB 16 billion, which are locked up in Russia. But we are trying to now actually use this money to meet the abandonment obligations in case of the other projects with Sakhalin. Mm. Okay, that's it. Thank you so much. Thank you. Next question comes from Iqbal Khan from Nuvama. Please go ahead. Yeah, hi. So I just wanted to ask a question on the windfall tax. Just correct me if I heard it right or wrong. You mentioned the windfall tax on this quarter was INR 6,472 crore? Vankor. No, Windfall Tax. Windfall tax. Hello? Yeah. Yeah, we are just letting you know. So your question was, what was the windfall tax amount? Yeah, the windfall tax in this quarter. Okay. No, it was INR 3,352 crore in Q2 2024. Mm-hmm. So, was there any inventory adjustment in this? And if yes, then how does it to what extent were the adjustment done? If you could consider it in USD per barrel. Yeah. What we do is normally when we value our crude inventory, we also consider the sales part. So this is, the windfall part is also under the excise, so we do add this into the inventory. So current quarter, there's an increase in inventory, so we have added this. In terms of the provisions for inventory, it is INR 930 crore. Mm-hmm. So, what exactly you want to know further? Like, there's a- Yeah, I just wanted to know, in USD per barrel, how would you translate this? Uh. The realization. So you see, around INR 3,000 crore was the outflow, what has been shown. Okay, out of the INR 930 crore, if you just subtract, so INR 2,144 crore. And if you divide, it comes to around 8.23 barrels. 8.23 barrels. Okay, understood. Thank you. Thank you. That was the rate what was prevailing, if you see. Should I explain? Right. Right. Yeah, yeah. Understood. Understood. You see- Yeah. The windfall tax comes under excise law. So the product, the, SAED, Special Additional Excise Duty, is payable only at time of removal. So suppose, in the month of September, some crude is produced, and, suppose the price is, say, $16 per barrel, windfall tax, but the, crude is removed in the month of October, when the price is, windfall tax rate is $10 per barrel. So only payment will be made as per $10 per barrel, not at $16. So this is only an accounting entry, but actual payment will be based on the rate prevailing at time of removal. Understood. These are only accounting statements. Understood, sir. Thank you, sir. Thank you for this. Thank you. Next question comes from Aswin Balasubramanian from HSBC Mutual Fund. Please go ahead. Yeah. Hi, thanks. My question relates to OPaL, your subsidiary. So I have a couple of queries with regard to that. So first is, you know, you mentioned that right now, the stake could go to 96%, but later you may bring in a strategic partner. But is there also the possibility that you're evaluating to maybe make it a wholly owned subsidiary or, you know, sort of merge it with ONGC itself? I mean, like in the past, we've seen for OMPL, for example, it's amalgamated with MRPL. And similarly, MRPL also, you know, is although it's publicly listed, it's majority owned by ONGC. So I mean, is the thought process there to keep the majority ownership?... of ONGC or, I mean, what's the thought process then in terms of strategic partner, if you're bringing, like, what kind of strategic partner would you be looking at? So that was one question. The other question was, in terms of the you know CapEx plan. So there were some news reports that, you know, in terms of the petchem business, ONGC through its subsidiaries, is planning to invest, you know, quite a sizable amount in the next few years. So, what's the plan in terms of OPaL, in terms of CapEx, you know, sort of going forward? If you can give some color on that. And also this approval for the, you know, equity infusion, when do you expect that to happen? Okay. This is D. Adhikari. Three questions you have raised. One is the OPaL strategic partner. Second is CapEx plan for the next few years in petchem and downstream business. Third is approval process for OPaL. Right. So first question, that is our strategic plan for OPaL or for infusing a new partner is like this: because this petchem industry is basically, you know, the agility or flexibility is most important thing, which is that that is addressed better when it is a JV instead of a, you know, a public sector subsidiary. So for its revival or to make it sustainable, ONGC have to step in because the other two promoters, GAIL and GSPC, did not contribute much in the past. So now, considering the, you know, little bit distressed financial conditions, ONGC is proposing to infuse an equity of about INR 18,000 crore, INR 18,365 crore precisely. So that will make, ONGC's shareholding to about 96%+. So this will become a subsidiary for the time being, but our, objective is not to convert OPaL a subsidiary, neither to merge it with ONGC. At least in the, for the next three years, by three years, we will try to infuse an equity investor once it is turned around. We are expecting that by 2025, FY 2025, it will be turned around after infusion of the capital and ensuring a sustainable feed, gaseous feed stock for OPaL. After that, by 2027, FY 2027, we'll try to infuse a new equity partner. So that exercise will start after it is turned around, say, by, after 2025. So this is this, plan, and we would like to bring down ONGC's equity holding to, 50%, so that it remains a joint venture of ONGC only, not a subsidiary. This is one. Second question is CapEx plan for in the downstream and petrochemical. Yes, considering the, you know, waning demand on the, motor spirit or, fuel, we are, we are focusing on increasing, interest in, in oil to chemical kind of business or even refinery. In that regard, we are exploring two large projects, two large projects, one in the, in two different states of the country. It would not be prudent to disclose the, immediately- Yeah. but yes, we have a plan of investing about INR 100,000 crore, projects, more than INR 100,000 crore in two projects, by 2028 or 2030. So this is the plan, and our, petrochemical, production as of today, is through OPaL and MRPL. So OPaL is definitely a flagship, petrochemical project for ONGC, and we are trying to take our current petrochemical portfolio of, say, about 3 million, to at least about 8.5-9 million tons per annum by 2030. This is our, you know, vision in petrochemical and downstream front. And the, We are in collaborative mode. Yes. And as far as approval for infusing the equity in OPaL is concerned, yes, our board has given the approval. Based on that approval, we are approaching the Ministry of Petroleum so that they can take up this request or board approval to the appropriate authority, like Cabinet, Committee of Economic Affairs, for expeditious approval of this process. Approval for infusing additional equity to make OPaL a subsidiary temporarily, and also requesting Cabinet to allow ONGC to use this new gas, that is the gas from new wells or the well- Intervention. -intervention for the petrochemical business, only limited to the amount of, the feed stock of OPaL. Is it okay? Yeah. Thanks. Thanks a lot for those responses. So just one follow-up. In terms of the CapEx, which you mentioned in the petchem, so would a large part be done through OPaL, or- No. You know, is it- It, they are separate projects. Two separate petrochemical projects we are exploring. It's not through OPaL. Okay. Okay, thank you. Thank you so much. It will be on collaborative mode. Mm, it will be kind of a joint venture or that kind of arrangement could be there. Mm-hmm. We'll be funding our share. Yes. ... Okay, okay. Thank you. Thank you so much. Thank you. Next question comes from Varatharajan Sivasankaran from Antique Stock Broking. Please go ahead. Thanks for the opportunity. So you mentioned about the CapEx number. I'm slightly confused about the things which are going down over time. One is about your petrochemical OPaL investment. So what is the INR 32,000 crore-INR 35,000 crore, does it include that OPaL investment or that doesn't? No, it does not include the OPaL investment. I think- No, that is only currently which is in table, basically, not the INR 17,000 crore-INR 18,000 crore, which is yet to be approved. Fair enough. Secondly, after the KG-DWN-98/2 reaching completion by April next year, that development expenditure intensity should actually come down. I know that you have a lot of projects on hand in the pipeline, but they are yet to be approved or tendered out. So is it a fair assumption that by 2025, especially at least one year, your development its CapEx could actually come down? No, we will be able to maintain our, you know, our financial position is quite robust, and even after making this capital infusion, once it is approved by the CCEA, and some new investment which we are talking about. So we have the capacity to generate profits also, and definitely we will be able to maintain the desired, you know, dividend level. No, the development expenditure which you're talking about, that we have been maintaining around INR 30,000 crore over the period of last five years. So that as well as the Western Offshore front is concerned, the expenditure, as Mr. Pavan Agarwal has earlier explained, there are projects which are, you know, under various stages of approval. So we, that CapEx part in development would more or less continue to be the same. Of course, as well as the core E&P is concerned, the focus is now getting a little more. We are planning to spend on the exploration, part, as more so because of the, the government has released in no-go areas also now. So around INR 30,000 crore is what we are planning in the next three years, INR 10,000-odd crore in exploration, which is some increase. But, yes, if you exclude the Petchem and other projects which are subject to approval, the development expenditure would continue to be more or less on the same level, on the core ENP sector. Fair enough, sir. Thanks. One last question on the international asset, specifically on Venezuela and Mozambique. If you have any update, Venezuela, especially given the lifting of the sanctions, is there any thought process on further investment as well as the dividend outflow? And in terms of Mozambique, if you have any updates. On the Venezuela, the sanctions have been lifted on nineteenth October, and for a period of six months, that is, first week of April 2024. We have our team on the ground, which is in consultation with the PDVSA to actually secure the crude allocations, which will actually facilitate the realization of the pending dividends. We are also in the talks with the banks in Venezuela to see how the funds remittances can take place. As of now, there are no further investment plans as far as Venezuela is concerned. Regarding the other project you spoke, Mozambique, this project is maybe this year, end of this year or January 2024, we are expecting a restart. Because the security situation has considerably improved in the project area, and already, 2,000 feet are on the ground. Emergency work has been resumed, so there is an early start happening in January 2024. Absolutely. Anything else? Thank you very much. Thank you. Next question comes from Roshni Devi from Argus. Please go ahead. Yeah, hello, sir? Yeah, hi. Please go ahead. Hello. Please go ahead. Yeah. Regarding the Panna-Mukta oil fields, how has the production been there so far, and what is the outlook on it? Panna-Mukta. I think Panna-Mukta is producing very consistently, something about 7,000-8,000 barrels per day. We hope that we will be maintaining the same rate in the near future. Okay. Thank you. Thank you. There are no further questions. Now, I hand over the floor to Mr. K.C. Ramesh, Executive Director and Chief Corporate Finance, for closing comments. Yeah. Thank you, ma'am. We thank all the analysts and investors for being part of this call today. I think the outlook, as ma'am was explaining in the beginning itself, like, you know, it's pretty good now with you know the actual prices that we have for oil particularly. So in case of gas, the you know for the gas well intervention and the new wells which we are going to get 20% more. And with the KG-DWN-98/2, we are expecting that the you know the core revenue which we have from the ENP would continue to be you know more if we are getting the price that the government has assured for gas. Further with the new investments in other areas like Petchem and other areas, what Mr. Agarwal was explaining. So the overall outlook looks pretty good, and with your support, we keep continuing to perform well. So thank you once again. Thank you all for being part of this call today. Thank you. Thank you. Thank you. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Chorus Call Conference Call Service. You may disconnect your lines now. Thank you, and have a good day.