Exclusive conversation with Arun kumar singh , Chairman And CEO of ONGC on Q4 results

Thank you.

So, one big issue that ONGC was facing was this: you may be aware that there is a GST on royalty issue. Royalty is a tax, and tax on tax — ONGC believed that tax on tax should not happen. But since there was a demand from the GST authorities, ONGC was thinking that sooner or later the decision would come in our favor. But due to matters taking time, and because of the accounting principle of conservatism, we took a bold call that we should provide for the GST of about 12,000 crores. If you take out 25% tax on that 12,000 crores, it comes to about 9,000 crores. So if that 9,000 crores were not factored in, our profit after tax would have been 47,000 crores. Similarly, if you go back to last year, in the 40,000-crore PAT, about 8,000 crores was the tax effect because the regime changed. So against that 32,000, this is 45,000 — which means 51% more profit. But there is an optics issue, which is why you are asking this question. ONGC increased its profit from 32,000 to 47,000 on its own, but you did well to flag this.

We have factored this in, and that is why you see these numbers.

Last year, the gas price realization was around 7.3 something. But this year, per government policy, it's 6.5, so there will be roughly a $1 drop. Crude price realization last year was very good at 91-92, compared to 75 as of today — that's also about a 15% impact. So broadly, we understand that there will be about a 15% revenue loss. But compared to last year, there may be some gains in quantity, and there will again be some tax benefit. So overall, we see it as a manageable financial year.

If it's 10%, we'd be more than happy. But from next year onwards it will happen.

In my understanding, OPEC will need to take a very responsible call because the world is no longer what it used to be in the past. Secondly, this will impact the world economy if responsible cuts are not made. If it impacts them, it will also impact OPEC. And the other thing is that renewables acceleration will happen. If on one side there's a mountain, on the other side there's something else. In my view, China's story is a bit different right now — demand is not as strong as the world was expecting. So there needs to be a lot of responsibility. Taking extreme positions on both sides won't work; they need to take the middle path.

There are two scenarios. I'll be very frank with you — the best scenario can be as early as August for oil production, and as far as gas is concerned, that's October. So it's a timeline between August and October for oil production.

For our economics, for our country — we are an energy-deficient country — so naturally we always look at opportunities. If it's commercially viable and the geopolitical situation permits, and if the political situation of that country permits, we will be going forward with acquisitions. It could be in any place of interest. This is a normal exercise we keep doing, and as soon as it comes within striking distance, we will absolutely go for it.

It's a company with 12-13 million tonnes of production whose share is short.