Oil and Natural Gas Corporation Limited (NSE: ONGC) Q2 2025 Earnings Call dated Nov. 12, 2024
Corporate Participants:
Vivek Tongaonkar — Director, Finance
Ajay Kumar Singh — Chief Corporate Planning
Vinod Hallan — Chief Financial Officer, ONGC Videsh Ltd.
Analysts:
Kirtan Mehta — Analyst
Sabir Hazarika — Analyst
Probal Sen — Analyst
Varatharajan Sivasankaran — Analyst
Mayank Maheshwari — Analyst
Gagan Dixit — Analyst
Vikash Jain — Analyst
Nitin Tiwari — Analyst
Yogesh Patil — Analyst
Kishan Mundra — Analyst
Hemang Khanna — Analyst
Presentation:
Operator
Good afternoon, ladies and gentlemen. I’m Pelcia, moderator for the conference call. Welcome to ONGC’s Q2 FY ’25 Earnings Conference Call. We have with us today Mr. Vivek Tongaonkar, Director, Finance and team who will interact with investors and analysts to discuss Q2 earnings. [Operator Instructions] Please note that this conference is recorded.
I would now like to hand over the floor to Mr. Vivek Tongaonkar for his opening remarks. Thank you, and over to you, sir.
Vivek Tongaonkar — Director, Finance
Yeah. Thank you very much. Good afternoon, ladies and gentlemen. To introduce, I am Vivek Tongaonkar, Director, Finance ONGC. I welcome you all in this ONGC earnings call for Q2 and H1 ended financial year ’25. Thank you all for joining us on this call. I’m joined over here by my colleagues from ONGC Mr. Ajay Kumar Singh, who is our Chief Corporate Planning; Mr. Satish Kumar Dwivedi, our Chief of JV and BD; Mr. Devendra Kumar, Chief Corporate of Finance; Mr. Akhilesh Tiwari, Head Corporate Accounts; Mr. Prakash Joshi from Investor Relations; Mr. Lakshman Gora. From OVL, we have Mr. Vinod Hallan and Mr. Raj Kumar.
ONGC has compiled its financial results for the quarter and six months ended 30 September, 2024, which have been reviewed by the statutory auditors. The financial results have already been released on 11 November, ’24 through a press note and sent to the stock exchanges. This has also been sent to the analysts who are on our mailing list. I’ll present a brief synopsis of the results. The company has earned a net profit that is profit after tax of INR11,984 crore during the second quarter of financial year ’25 as against INR10,238 crore during the second quarter of financial year ’24, which is an increase of INR1,746 crore that is 17.1%.
Correspondingly for the H1 financial year ’25, the profit after tax has increased by INR157 crores that is 0.8% from INR20,765 crores in H1 financial year ’24 to INR20,922 crores in H1 financial year ’25. The sales revenue for Q2 financial year ’25 has decreased by INR1,218 crore, 3.5% as against the corresponding quarter of previous year due to lower crude prices. However, volume [Phonetic] has increased by INR276 crores that is 0.4% for H1 FY ’25 as against the corresponding H1 of previous year mainly on account of increased sale revenue from value-added product sales.
The realization of crude in rupee terms stood at INR6,561 per barrel in Q2 FY ’25 vis-a-vis INR7,013 per barrel in Q2 FY ’24 that is a decrease of INR452 per barrel, 6.4% in INR terms. Similarly, realization for crude in rupee terms stood at INR6,744 per barrel in H1 FY ’25 vis-a-vis INR6,641 per barrel in H1 FY ’24, which amounted to an increase of INR103 per barrel, 1.6% in INR terms. The expenditure on statutory levies, royalty and excise duty have decreased during Q2 FY ’25 by INR2,960 crore, 27.4% and in H1 FY ’25 by INR642 crores, 3.5% in comparison with similar period for the previous years. This decrease in statutory levies is attributable mainly to decrease in average sale price of crude oil, levy of special additional exercise duty by Government of India on production of petroleum crude at a rate revised every fortnight based on international crude prices.
This SAED on crude has been levied with effect from 1 July, 2022 and it amounted to INR3,352 crore in Q2 FY ’24 and to INR1,127 crore during Q2 FY ’25. SAED from the second fortnight of September ’24 is nil. There is an increase of INR4 crore in exploration costs written off in Q2 FY ’25 and INR631 crores in H1 FY ’25 vis-a-vis the corresponding periods for the quarter and half year of the previous year. The increase is mainly on account of increase in 3D data acquisition and to charging off of drivers at Western Offshore Basin, Assam and Arakan Basin and Vindhyan Basin.
The operating expenditure has increased by INR277 crores, 4.5% from INR6,112 crores in Q2 FY ’24 to INR6,389 crore in Q2 FY ’25. Similarly, the operating expenditure in H1 FY ’25 has also increased by INR390 crore that is 3.2% from INR12,080 crore in H1 FY ’24 to INR12,470 crores in H1 FY ’25. This increase is mainly on account of increase in activities at KG-DWN-98/2 and increase in repair and maintenance at Mumbai offshore and other production expenditures.
DD&I cost for Q2 FY ’25 and H1 FY ’25 stood at INR5,598 crore and INR11,495 crores, respectively, as against INR4,721 crore and INR9,718 crore during the corresponding period of previous years. This increase is due to increase in ONG assets, increase in depletion rate and increased number of workout days and major capitalizations of INR166 crore at Western Offshore. At the consolidated level, the company has earned a net profit that is profit after tax of INR9,878 crores during the second quarter of FY ’25 as against INR16,171 crore during the second quarter of FY ’24. This is a decrease of INR6,293 crores that is 38.92%.
At the consolidated level, the company has earned a net profit of — profit after tax of INR19,689 crore during H1 FY ’25 as against INR33,666 crore during H1 FY ’24 that is a decrease of INR13,944 crore, which is 41.52% decrease. This decrease is mainly due to decline in profit of subsidiaries HPCL and MRPL. After this profits, the Board has approved an interim dividend of 120% that is INR6 per share of INR5 each. The total payout on this account will be INR7,548 crore. In the previous year, the company had declared an interim dividend of INR5.75 on each equity share of INR5 crores.
The government has approved additional investment in OPAL by ONGC and it has also allocated gas from new wealth up to 3.2 MMSCMD. This gives assured feedstock supply and paves the way for sustainability of OPAL. Investment totaling INR18,365 crore by ONGC in OPAL will result in an increase in ONGC stake from 49.36% to 95.69%. ONGC has already infused INR13,200 crore in OPAL, which has been used to retire high interest debt of OPAL. OPAL is now the seventh subsidiary of ONGC.
Lastly, before I finish, I would like to add that with focused approach and continuous thrust on increasing domestic production, ONGC has been able to reverse the declining trend in its crude oil production. The standalone crude oil production excluding condensate during Q2 FY ’25 was 4.576 million metric tons registering a growth of 0.7% over corresponding quarter of financial year ’24. Similarly, the standalone crude oil production during H1 FY ’25 was 9.204 million metric tons with an increase of 0.8% over H1 FY ’24. We are happy to mention that three oil wells of A field of deep water block KG-DWN-98/2 have been opened on 30 October, ’24, thereby enhancing the total oil production from the KG 98/2 field to 25,000 plus barrels of oil per day from eight flowing wells. We also plan to open the remaining five oil wells shortly.
Similarly, on the gas production front also, ONGC has been able to arrest the de-growth. The decline which was 3.6% in Q1 FY ’25 over Q1 FY ’24 has been brought down to 2.1% in Q2 FY ’25.
Friends, with this, I finish my briefing of the second quarter results for financial year ’24, ’25 and H1 financial year ’25 and we will be happy to take questions from you. We would request you to restrict your queries on financial results only. Thank you very much and the floor is open for questions, please.
Questions and Answers:
Operator
[Operator Instructions] The first question comes from Kirtan Mehta from BOB Capital Markets. Please go ahead.
Kirtan Mehta
We have notified — mentioned about two contracts during this press release, one we have awarded on the L&T and second we have awarded on the Mazagon Dock with the potential of 5 MMSCMD and 4 MMSCMD. Would you give us more color on the project timeline and the ramp-up that we can expect from these projects?
Vivek Tongaonkar
Yeah. Both these projects have been awarded recently and both these projects are likely to be completed by the end of ’25, ’26. Both would be producing gas majorly from Daman upside project also and as well as the DSF 2 project. So both these projects would be gas projects as such.
Kirtan Mehta
These projects are primarily for the wellhead platforms. So are the drilling contracts also awarded?
Vivek Tongaonkar
So the drilling contracts we hire — charter higher rigs or we have our own rigs, which would be carrying out the drilling of the wells subsequently whenever these well platforms are ready. And the amount of gas that we are looking at is 5 MMSCMD in case of Daman upside and around 4 MMSCMD from DSF 2 project.
Kirtan Mehta
So when we say about FY ’26, this is basically the completion of the wellhead platforms and drilling contracts would be subsequently after that. So when do we start seeing the gas production?
Vivek Tongaonkar
What would happen is as the platforms get installed, we open them up for bringing our rigs over there and start the drilling of those wells from those particular platforms. So generally, what we will find is within about say six months latest from the completion date of all these platforms, we would have started with the production of crude oil or gas as such.
Kirtan Mehta
Right, sir. Understood. Second question was about the new well gas or well intervention gas. We understand that we have been allocated around 4 MMSCMD of gas is new well gas. How do we sort of — is it basically that any decline over and above the 8% rate that we have been able to arrest that will get considered as the new well gas for us? And how do we expect this to ramp-up over next two, three years?
Vivek Tongaonkar
So the new well gas is the gas which is from any new wells that are drilled or it is also from any interventions that happen in existing wells. That gas would be new gas — qualify for new gas. Over a period of time, what we are seeing is that we expect a decline in our production to up to 6% to 7%. With this new gas coming up because we keep on drilling new wells as well as well interventions are carried out on a regular basis, we expect the quantum of new gas to increase. And what we are expecting is that over a period of say maybe seven to eight years, most of the gas which would be there from the existing field should qualify to be new gas as it replaces the existing gas coming out from the existing wells.
Kirtan Mehta
Right. So as of now, there is no sort of the decline rate criteria that we have to meet or so over and above this particular decline rate only this will considered as a new wells. Is it any gas which comes out of the new wells for interventions will be treated as a new gas?
Vivek Tongaonkar
Generally the decline rate that is considered is 7.5% or what has been specified by the government. And we make-up — we would be making up any gas which comes beyond — above this decline rate would be the new gas as such.
Kirtan Mehta
So in terms of the H1, we have just said that we have around 2.3% as sort of the gas decline. So roughly around 4.5% to 5% would qualify as the new well gas as we end the FY ’25. Is that the way to think about this?
Vivek Tongaonkar
No. See, whatever new gas we get from — gas we get from new wells that are drilled in existing fields or if we do any well intervention on existing wells, all that gas would qualify for the new gas purposes.
Kirtan Mehta
Fine, sir. And the last question, if I may squeeze in one more. On the KG-DWN-98/2, would you sort of say the latest guidance on the — both oil as well as the natural gas ramp-up.
Vivek Tongaonkar
So we have already mentioned that we are producing 25,000 plus barrels of oil per day from KG 98/2 and we would be opening — further opening of new wells over there. So earlier on, we have given a guidance of 45,000 barrels of oil per day being the peak towards the end of this year, financial year ’25. So as of now, we believe we are on track for that guidance. As far as gas is concerned, we have from the East Coast about 2.5 MMSCMD being produced. We have mentioned that it would be around 10 MMSCMD towards the end of this financial year or just in the first — in the new year ’26, ’27 also — ’25, ’26. So we…
Kirtan Mehta
This will also be related to the five wells that we are planning to open up. So the same well will contribute to this new gas production growth.
Vivek Tongaonkar
So these wells would contribute to the new production of oil and gas as such.
Kirtan Mehta
Thank you, sir, for this clarification.
Vivek Tongaonkar
There are three more wells that are being planned.
Operator
[Operator Instructions] Next question comes from Sabir Hazarika from Emkay Global. Please go ahead.
Sabir Hazarika
Yeah, congratulations on good set of numbers. So I have a few questions. So first one is relating to this new well gas. So it has — I mean, this has been effective from 16 October. Is that right, I mean, in terms of accounting?
Vivek Tongaonkar
Yeah. First week of — 8 August.
Sabir Hazarika
8 August, it has been effective in your books, right?
Vivek Tongaonkar
Exactly.
Sabir Hazarika
Okay. And…
Ajay Kumar Singh
Yeah. Actually if you see, this notification had come on 8 August, okay, and the billing has been started from September 2024, yeah.
Sabir Hazarika
Okay. So this quarter also some impact is there. I mean, some portion of the volumes is getting that $9 to $10 prices. Is that right?
Vivek Tongaonkar
New gas is getting higher price. You’ll see from November 2024 previously it was 4 MMSCMD, which was allocated. Currently it is 4.68 MMSCMD. Out of that C2, C3 plant is 2.76.
Sabir Hazarika
Okay. So right now, if I have to do a modeling of this, then I have to like basically take the total production minus this 4.68, this 4.68 will be basically be $9 to $10 and the remaining will be $6.5. Is that right?
Ajay Kumar Singh
Yeah. Then you have to minor that HPHT and deep water also.
Sabir Hazarika
Okay. So this includes HPHT and deep water also, 4.68?
Ajay Kumar Singh
No. What you said from the total you are going to subtract it, it’s not…
Sabir Hazarika
[Speech Overlap] That’s right. I’m talking about, I mean, ex [Indecipherable] maybe like nominated — from nominated block, this has to be…
Ajay Kumar Singh
Yeah.
Sabir Hazarika
Okay. And your KG 98/2 I think I mean that gas currently what is the production of —
Operator
I mean you mentioned 2.6, so this is like — this includes I think VA and S1 also, right? So pure 98/2 cluster 2 gas will be how much? That would be 1.85.
Sabir Hazarika
That would be 1.85 MMSMD and that will go up to say 7 to 8 MMSMD. Is that right?
Vivek Tongaonkar
Yeah, broadly we are on track for that.
Sabir Hazarika
And there you are basically getting the ceiling.
Vivek Tongaonkar
We are getting the — sorry?
Sabir Hazarika
Ceiling price, right?
Vivek Tongaonkar
Ceiling price, yes.
Sabir Hazarika
Okay. Is there anything specific formula? It’s just the ceiling only which is being like currently applicable?
Vivek Tongaonkar
As of now that is all.
Ajay Kumar Singh
It’s a formula based on fuel oil, LNG, it has got a basket. So it is based out of that.
Sabir Hazarika
Right sir. And I think this is also being sold — just one second, sir. So yeah, fair enough. And — okay, fair enough. And second question is on your capex. I think from the government data, I think your capex for this year has — I mean, H1 itself has been like something like INR24,000 crore. So any comments on that, I mean, given that full year number is generally INR32,000 crores to INR33,000 crores for you?
Ajay Kumar Singh
See, as you know, there you can see the amount which we have paid to OPAL that is also part of it. So when you say INR24,000 crore, out of that INR6,000 — roughly around INR6,000 crores, if it is September, so balance was for our AP…
Vivek Tongaonkar
Capex.
Sabir Hazarika
Okay, sir. So ideally it should be INR17,000 crore, INR18,000 crore only for H1. So INR24,000 crore includes INR6,000 crore of OPAL infusion as well. Okay.
Vivek Tongaonkar
Yes.
Sabir Hazarika
Okay, sir. Fair enough. Thank you so much. I’ll come back in the queue. Yeah.
Vivek Tongaonkar
Thank you.
Operator
Thank you. Next question comes from Probal Sen from ICICI Securities. Please go ahead.
Probal Sen
Thank you for the opportunity. With respect to OPAL, just following-up on the briefing that was done. Hello.
Vivek Tongaonkar
Yeah. Yes, go ahead.
Probal Sen
Am I audible, sir?
Vivek Tongaonkar
Yes.
Probal Sen
Yeah. Sir, just wanted to understand if you can kindly — I did not get all the numbers in the — how much is the total investment done in OPAL till date by ONGC?
Vivek Tongaonkar
Yeah. Just hold on. For what we have done now?
Probal Sen
Including what we have done now, sir, what is the total number?
Vivek Tongaonkar
So currently we have done INR18,365 crores.
Ajay Kumar Singh
Till date we have done INR10,655 crores.
Vivek Tongaonkar
So out of INR18,365 crores, we have infused INR13,200 crores just now for this year after it’s getting…
Ajay Kumar Singh
Till date.
Probal Sen
INR13,200 crores has been infused and INR18,350 odd crores.
Vivek Tongaonkar
INR13,200 crores.
Probal Sen
Got it. And the total investment envisaged is INR18,350 crores, which will happen over H2 as well.
Vivek Tongaonkar
INR18,365 crores.
Probal Sen
INR18,365 crores. Now, if I can ask, after this investment is fully done, what will be the residual net debt in OPAL, if I can get a sense?
Vivek Tongaonkar
Yeah, just give a moment.
Probal Sen
Sure, sir. Hello?
Vivek Tongaonkar
Just a moment.
Probal Sen
Sure, sir. I’m sorry, I thought I had gotten disconnected, my apologies.
Vivek Tongaonkar
OPAL after this infusion of INR18,365 crores, we would be left with around INR14,000 odd crores as debt balance after we input INR18,000 crores.
Probal Sen
Got it, sir. Got it. So almost INR30,000 crore, INR32,000 crore plus of debt will get reduced to the extent of our infusion, right?
Vivek Tongaonkar
Yeah, just hold on for a second.
Probal Sen
Sure, sir.
Vivek Tongaonkar
Yeah, go ahead. Yeah.
Probal Sen
Right. So sir, in terms of just looking forward at what OPAL’s performance would look like, now that we are resolving two things, one is the debt burden as well as you know getting gas also at a slightly more competitive rate, thanks to the allotted business. What kind of profitability are we expecting from this business, let’s say, over FY ’26, ’27 versus where we are now?
Vivek Tongaonkar
Yeah. ’24, ’25, we are still expecting that the figures maybe a little bit subdued. But from next year onwards, we are expecting that things should be a turnaround in OPAL barring any unforeseen changes to product prices, etc, or feedstock prices.
Probal Sen
Any number in terms of EBITDA per ton even in U.S. dollars we can put on it, sir, as a range?
Vivek Tongaonkar
We would not be able to give any distinctively.
Probal Sen
No problem, sir. And secondly, with respect to the gas production, has there been any change in terms of the gas production ramp-up from previous guidance or are we sort of — this is what we have sort of been working with for the last six months?
Vivek Tongaonkar
Currently, the ramp-up what or whatever that we are expecting has already been mentioned that it will come from KG 98/2, which we have already given a guidance that it is likely to go up to — from the East Coast up to 10 MMSCMD by the year end. So that is — as of now, we are looking at those gas figures.
Probal Sen
Got it, sir. Thank you so much for the detailed answer. I’ll come back in the queue. Thanks.
Operator
Thank you. Next question comes from Varatharajan Sivasankaran from Antique Stock Broking Limited. Please go ahead.
Varatharajan Sivasankaran
Thank you for the opportunity, sir. Sir, if you can once again revisit the overall production guidance?
Ajay Kumar Singh
Overall production guidance, okay. Yeah. Good afternoon, everybody. I’m Ajay Singh. I’m Chief Corporate Planning. The guidance for next two years, we are expected to produce and enhance from current year production to 22.8 million ton of oil and similarly 22.1 million ton of gas equivalent. So both put together is about 44.9 million ton of oil and oil equivalent in ’24 — ’25, ’26. And next year, we are planning to have cumulative production of 46.2 million ton oil and oil equivalent in ’26, ’27 is the guidance.
Varatharajan Sivasankaran
Any breakup between oil and gas for [Indecipherable]?
Ajay Kumar Singh
Yeah, this is a 41.9 million is from the current year and 44.97 million is the next year ’25, ’26, the oil and oil equivalent both put together.
Varatharajan Sivasankaran
Okay. And sir, if you can provide an update on the — our OVL assets, all of them — each of them, let me know if you have any specific status which you can highlight?
Vivek Tongaonkar
Yeah. Yes, Mr. Hallan will provide that update, update on OVL assets.
Vinod Hallan
Yeah. OVL, we have currently 32 assets in 15 countries and of those, there are three assets in Russia, one in Mozambique. Am I audible?
Varatharajan Sivasankaran
Yes, sir. If you can be a little more louder.
Vinod Hallan
Yeah. So we have 32 assets in 15 countries. And of these, we have 11 exploratory, 14 producing, four development and three pipeline assets. And the country-wise distribution is three assets in Russia, one in Mozambique, two in Venezuela, two in Colombia and six in Myanmar and two in Vietnam. This is a broad distribution. And our production last year was 10.518 million oil plus oil equivalent and the guidance for this year is around the same number, 10.5 million. Of this, we have already — H1, we have already produced 5.039 million. And the Russian assets, three assets because of the conflict Russia, Ukraine, the production is slightly lower than as it used to be in the year ’23, ’24. The other assets are producing better than average, which has been targeted for the year ’24, ’25 and the current year average production is something around 194,000 barrels per day against a yearly average of 201,000 barrels in ’23, ’24. Yeah.
Varatharajan Sivasankaran
Okay, no, sir. Any update on Venezuela or — and…
Vinod Hallan
Venezuela, we are still — actually, Venezuela, the sanctions were lifted from October to April — 18 April, 2024. During that period, negotiations were on and Venezuela PDBSA have proposed for taking over the operatorship. But again, the sanctions have been imposed after April. We have sought this OFFEC approval and in case that is coming, we’ll try to make further progress on that, whether we can actually operate those assets and then — because right now, the restrictions are in place for oil movement as well as the plant restrictions.
Varatharajan Sivasankaran
Thanks, sir. If I can squeeze one more question, sir, with regard to the Western Offshore Bombay high technical assistance tender you floated. Is there anything like which you can provide us an update? And also like when the technical assistance does come through, any kind of a best case and worst case upside in terms of production we can actually look at? I mean, just to get a quantum of improvement we can get.
Vivek Tongaonkar
Okay. So that tender is still on, it has not yet been closed, but it should reach maturity in December that is what we are expecting. And once that is done, we will be having some technical service provider to work with us. It would be a long-term process. As of now, we would not be able to quantify any gains, etc, that are likely because it would depend from TSP to TSP and what sort of work goes in after they have looked into all the data that is available for Mumbai.
Varatharajan Sivasankaran
Thank you, sir. Thanks a lot.
Operator
[Operator Instructions] Next question comes from Mayank Maheshwari from Morgan Stanley. Please go ahead.
Mayank Maheshwari
Thank you for the call, sir. My first question [Technical Issues] to OVL. If you see this quarter, we have seen a significant increase in depreciation. And also if you could highlight what is the net realization after taxes in…
Ajay Kumar Singh
Mayank ji, there is an issue with your…
Vivek Tongaonkar
We are not able to hear you properly.
Mayank Maheshwari
Hello. Can you hear me?
Vivek Tongaonkar
Now better.
Mayank Maheshwari
Yeah. I was just on OVL. I had a couple of questions. One was on the depreciation side, there is increase in depreciation during this quarter.
Operator
I’m sorry to interrupt. Can you join back the queue, sir? The voice is not clear. Thank you. The next question comes from Gagan Dixit from Elara Capital. Please go ahead.
Gagan Dixit
Yeah, thanks for taking my question, sir. Am I audible, sir?
Vivek Tongaonkar
Yeah, Gaga, you are.
Gagan Dixit
Yeah. Sir, so you mentioned in the press release that you are getting the 12% of the price of the Indian crude basket that’s from the new well gas. So is this new well gas is the new wells from the nominated blocks or this KG block or is it something other…
Vivek Tongaonkar
Nominated blocks.
Gagan Dixit
Okay. So what I know is that it’s some 20% premium that was the — earlier that was the case is over the $6.5. So is there any — is anything missing something here, sir?
Vivek Tongaonkar
Can you come back what you mentioned in the last statement, 30% what?
Ajay Kumar Singh
No, he said 20%.
Gagan Dixit
So what I know is that 20% premium over the $6.5 gas on the nominated blocks that the case is. So it should be at $7.8 that should be the case.
Vivek Tongaonkar
Gagan, the issue is it is 12% on the Indian basket, crude oil basket. So what the government has also said that gas price in India would be 10% of that Indian crude oil basket. Now Indian crude oil — but there was a ceiling of $6.5 per MMBtu. If it is $70 crude oil basket, then [Foreign Speech] it should be $7 per MMBtu, but the government restricts it to $6.5 as of now. New case — in new gas, it is — it would be 20% above the price that is there for the APM gas. So even if it is $70 per barrel is the Indian crude, then 12% of that because 10% plus, 20% of that is 12%, 12% of [Indecipherable] is $84.4 per MMBtu would be the price, not 12% on $6.5.
Gagan Dixit
Okay. It’s not a 20% over $6.5, it’s — okay. It’s a 12% of the current crude basket. Okay.
Ajay Kumar Singh
Of the Indian crude basket and this is basically announced every month.
Gagan Dixit
Yes. Okay. And sir, my second question is, you mentioned just that your natural decline rate is 7.5%. So is it safe to assume that this nominated block old gas, I mean, $6.5 gas that production will continue to decline at 7% to 8% rate Y-o-Y from now on? And it will it replace by the new wells something.
Vivek Tongaonkar
Yeah. That is what I mentioned earlier on that if you consider $7.5 as the decline on a normal basis and then we are — if you are able to maintain the production at current levels, it effectively means we are replacing all the old gas with the new gas for nominated fuels over a period of time.
Gagan Dixit
Okay. So how much is the percentage of your — I mean in the — I mean, this $6.5 old gas, how much is the percentage of that at present?
Vivek Tongaonkar
So as of now, the new gas would not be very substantial.
Ajay Kumar Singh
But it will be continuously increasing on…
Vivek Tongaonkar
Because we started off in September, we said — as we said that we started billing in September only. So over a period of time, they should increase. From next year onwards, I think we would see a marked difference in the revenue generated from this new gas.
Gagan Dixit
Okay. So older gas is somewhere around 1 to 2 — I mean, something like every year it will decline. Okay.
Vivek Tongaonkar
Broadly.
Gagan Dixit
Okay. Yeah, okay. That’s from my end, sir. Thank you.
Vivek Tongaonkar
Yeah.
Operator
Thank you. Next question comes from Vikash Jain from CLSA India. Please go ahead. Your line is open.
Vikash Jain
Thanks for taking my questions. I have a couple of them and maybe one suggestion as well. If we look at your guidance for the KG field, it is — can you just give a sense of the broad guidance at which you will reach 45,000 barrels. Can I take that as end of this fiscal that is March ’25 roughly or — and what is the guidance to broadly when you will reach 10 MMSCMD? When you said end of the year, does that mean end of 2025 or the gas guidance?
Vivek Tongaonkar
So when we are saying oil 45,000 is what we are targeting for this year end — financial year end broadly, we already have got 25,000 plus producing. We keep that with the existing wells that are there and which we are going to open, we should be reaching our target at the peak production around that time. Coming to gas, new wells are being opened up and these along with the oil and gas — along with the oil, gas would also be produced, we are expecting that this gas production what we have mentioned would be around end of this year financial year ’25 and maybe it may spill over to ’25, ’26, but it will be there towards the end of this financial year.
Vikash Jain
So basically, I mean, let’s keep it broadly, say somewhere around May before the middle of calendar year 2025 somewhere around March, April, May, you will — you are thinking — you’re targeting to get to 10 MMSCMD?
Vivek Tongaonkar
We are estimating that as of now.
Vikash Jain
Okay. And the second question that I have is just for this calculation of decline rate to get to the volume of gas which will get the higher 12% slope. Is FY ’23 the right starting point of what your production was from nomination fields? And then if you are declining less than 7.5%, like for example, to keep it simple, is FY ’23 nomination field is 100 and is if in FY ’25 or is it FY ’24, what is the starting base that I should be looking at firstly?
Ajay Kumar Singh
It’s FY ’23 — FY ’24.
Vivek Tongaonkar
’23, ’24.
Vikash Jain
So FY ’24, so if it is 100 and in FY ’25, your average production stays at 100, then 7.5 units of gas will be getting a 12% slope starting FY ’26. Is that what it means?
Vivek Tongaonkar
No, it would be from whenever that gas gets produced. Yes.
Vikash Jain
No. So what I’m missing is that when do you — your decline rate is to be 7.5% for the year. So it’s average to average. So FY ’26 is when you start getting the higher volumes or that is the bit that I’m not able to understand.
Vivek Tongaonkar
So it could also happen that [Foreign Speech] I have drilled new well in this year that gives me gas. So that would also earn me that higher price.
Vikash Jain
Okay. So any kind of new wells that you drill even in your existing areas, so nomination fields so that you can separate out and say that this is volumes coming from new fields, right?
Vivek Tongaonkar
Yes.
Vikash Jain
So it is not just a simple 7.5% formula, but even that interventions that you do, which will give that extra volumes, which will get that extra price, right? So finally, sir, just one suggestion. Since now we have three different prices operating and no real easy way for us to know for sure what is the volume that you’re getting from intervention. Of course, there could be a simpler formula, which is not the complete solution. Why don’t we give a breakup of our gas volumes and the gas price for each of those three things? Maybe that will become more significant starting a couple of quarters from now as well because when KG field also comes in, then there is that significant proportion, which is the HPHT formula plus next year onwards, there’ll be a big proportion, a reasonably large proportion, which will have the 12% slope, which will be almost similar price as HPHT effectively. So why can’t we spill that volumes out separately for ease of everybody to kind of be able to model and look at things differently?
Vivek Tongaonkar
Okay. We’ll have a look at it. And if possible, we’ll certainly try and provide those figures if possible.
Vikash Jain
But roughly — so from your understanding, what is the volume likely to be in FY ’26, which you will get this 12% slope? Is it 5 MMSCMD, 7 MMSCMD, any rough numbers?
Vivek Tongaonkar
As of now, it would be very difficult to say that because it depends upon the new wells that are drilled, whether I get new gas out of it or the interventions that are done and whether we get gas out of it. So as of now, it would may be difficult for us to hazard a guess. Next year onwards, we may get a better sort of a idea about this thing because we have just started from September onwards. Rather August this got — notification came up. September we have started the billings and because this also requires us to look into what are the new wells and what production is likely to come up.
Vikash Jain
Sorry. Currently, what is the volume roughly?
Vivek Tongaonkar
4.68 MMSCMD.
Vikash Jain
4.68, that is the number that you mentioned. Sorry. Thank you so much. Thanks a lot for taking my question.
Ajay Kumar Singh
And this will change every monthly basically.
Vikash Jain
Correct. But it is likely to go up and the share of the 6.5 will keep coming down, right?
Ajay Kumar Singh
Yes, exactly.
Vikash Jain
Thank you so much.
Operator
Thank you. Next question comes from Nitin Tiwari from PhillipCapital India Limited. Please go ahead.
Nitin Tiwari
Good evening, sir. Thank you for the opportunity. Sir, just a few clarificatory questions. So staying on the topic of new well gas, just wanted to understand the mechanism. So how does the gas get certified as new well gas? Is there a basically approval required from DJH? And then how does the mechanism with the customer work? So I mean, when you’re offering that gas, does this gas gets offered under the usual APM mechanism or it is free to market and you’re marketing it on IGX? And the reason I’m asking is that would the NWG gas be marketed by you or would it be marketed by Gail on your behalf? How would the marketing angle work?
Vivek Tongaonkar
So broadly, if you see, the new gas that is being produced or would betted by DJH or would be [Indecipherable]
Nitin Tiwari
Sorry, sir, your voice is breaking, sir. I’m not able to hear you properly.
Vivek Tongaonkar
Actually, there is a lot of background from your side, Nitin.
Nitin Tiwari
I’ll mute my line, sir. I’ll my line.
Vivek Tongaonkar
Yeah. Nitin, there would be — DJH would be looking into this new gas visas also and then accordingly, it would be declared as new gas. There would also be — the next question was whether we market it ourselves or we give it to Gail, wherever it is Gail, we are selling it to Gail. And if this new wells are connected to or sold to Gail, then Gail will market it at the higher price. They’ll buy it from us at a higher price. And if it is a direct customer, we would be selling it directly to the customer at this new price because this is what has been mandated by the government.
Nitin Tiwari
Okay, sir. So there is no fixed sort of marketing mechanism, which is mandatory for NWG gas. Great, sir. And secondly, sir, on OPAL, I wanted to understand it’s a dual feed cracker, correct me if I’m wrong over there. So given that it can also process naptha, so what was actually the need for allocation of domestic NWG gas for basically the platter to be profitable?
Vivek Tongaonkar
So it can work on naptha as well as gas ethane and what was earlier plan was that naptha was from ONGC, Uran as well as Hajira and the LNG was — which was being imported that from that C2, C3 was being extracted by our Dahej plant and then being supplied to this OPAL plant. However, once this LNG prices have gone up, now today LNG prices are $14 per MMBtu broadly. So with this, if you — instead of that, if you can get a new gas, which is still at around $8.4 or maximum $9 as of now, it is much cheaper as far as OPAL is concerned. They save around $4.5 to $5 in this process. So it becomes that they have an assured feed also as well as a cheaper rate. So this allocation by the government makes per plant more sustainable and viable.
Nitin Tiwari
No, sir. Why I’m asking that question is that I just wanted to understand that when we say dual feed cracker, so is it the same cracker which can — I mean, we can take in both naptha and natural gas or you have two separate crackers, one taking naptha, one taking one taking natural gas? And secondly, a corollary to that, that did the company explore the option of importing ethane and then using that as a feed rather than like banking upon NWG gas domestically?
Ajay Kumar Singh
Yeah, just a second, Nitin. So it is a dual gas cracker — dual cracker, so which can be used both naptha as well as gas. Earlier, the gas portion was through C2, C3 portion was being imported through rich LNG, which was coming from Qatar and which was — out of which part of this C2, C3 was being extracted by Dahej plant and provided to OPAL and the balance used to be returned back to Gail who was the owner of that gas as such and the differential between those two was being made up through ONGC gas — makeup gas. However, that allocation of gas was stopped earlier on by the government and now this has been made good again. So it is at $9 — $8.4, $9, it is cheaper than importing LNG and providing it back. So if your question is why we have not used ethane, bringing in ethane requires much more infrastructure and which would take some time to build up also. And as of now, we are not sure whether it will come out to be cheaper than this allocated gas.
Nitin Tiwari
No. Understood. Sir. And lastly on the Daman guidance that you provided that 5 MMSCMD of gas from Daman and another 4 from another field, I missed the name, sorry, is expected. So if you can give some timeline regarding that production.
Vivek Tongaonkar
So I said completion of these projects is expected in FY ’26 and gas on those fields should start up coming in ’26, ’27 onwards.
Nitin Tiwari
’27. All right, sir. Understood. Thank you.
Operator
Thank you. Next question comes from Yogesh Patil from Dolat Capital. Please go ahead.
Yogesh Patil
Thanks for an opportunity. Sir, question related to survey cost. Survey cost decline any particular reason? And sir, your plans to drill number of wells in FY ’25?
Vivek Tongaonkar
Just a moment. Second quarter you are talking, there is a decline in survey cost. That is your question?
Yogesh Patil
Yes, sir.
Vivek Tongaonkar
So broadly it is because of monsoon only.
Yogesh Patil
But sir, we have seen the decline on a Y-o-Y basis also. So last year also we have seen the monsoon.
Vivek Tongaonkar
Yeah. So the quantum, if it is lesser in this period, what has been planned that would result in lesser quantum of — sorry, there’s a quantum of expenditure one.
Yogesh Patil
So sir, my second question is related to other income. So other income also gone up sharply. Can you share the dividend part of that other income, which you have received during the quarter?
Vivek Tongaonkar
Yes. So the quantum that we have received is from IOC 1,404, from OVL 75, from HPCL 1,285, MRPL 251, Petronet LNG 56 and this is total is 3,071.
Yogesh Patil
Okay. Thanks. Sir, second question is related to again a 4.6 MMSCMD, which is notified by the government recently as NWG gas. So is this allotted to consumer for the next five years? I mean, as per my last reading, it will be alerted for the next five years. So just wanted to confirm the timeframe. Is it a five years allotment or lesser than that?
Vivek Tongaonkar
So it is the allocation for five years is for OPAL only. That is one thing. For the rest of the cases, whatever would be a contract duration for that period, the price of that gas if I am supplying partly from APM and partly from this new gas, accordingly, the price will change for the quantum that are being supplied to the customer, whether it’s existing and it would be for the term of the contract with that existing customer.
Yogesh Patil
Okay. And lastly on the OPAL side, if you could share some numbers on the EBITDA levels, PAT levels for the first half FY ’25, OPAL plant utilization levels?
Vivek Tongaonkar
Yeah, we can do that. So the utilization for Q2 as far as OPAL was concerned was 94%. Revenue was INR3,664 crore. EBITDA was INR78.67 crore and PAT was negative, but that was minus INR637 crore. It was lesser than the previous quarter PAT [Foreign Speech] loss rather. Previous quarter in Q1, it was INR983 million loss, whereas in this it has improved to INR637 crore loss.
Yogesh Patil
Okay. And do we expect based upon the new NWG gas allocation to the OPAL, we will come into the profitability in the second half FY ’25 and based upon the current run rate, you might guide us.
Vivek Tongaonkar
Like I mentioned earlier on, we would — we are not expecting any — we would be not be able to comment upon that as of now, but we do expect that from next year onwards we should be in a much better position. OPAL should be in much better position because the interest cost also will go down substantially for OPAL. And with ONGC pumping in or being the main shareholder, we are looking at ensuring that there is sort of a turnaround or the performance goes up and the capacity utilization also goes up.
Yogesh Patil
Okay. Thanks a lot, sir.
Operator
Thank you. Next question comes from Kishan Mundra from DAM Capital. Please go ahead.
Kishan Mundra
Hi, sir. Sir, you were exploring — hi, sir. You were exploring setting up a new oiled refinery at Prayagraj. So is there any update on that? Have you made any progress?
Vivek Tongaonkar
So as far as Prayagraj is concerned, I don’t think we have declared anywhere that we are doing any refinery or etc, as such. What we have already mentioned earlier on in the press is that we would be looking at petrochemical projects as such. On that also, we have not yet declared where it would be there. The studies are still going on. So I would not be able to comment about a refinery in Prayagraj.
Kishan Mundra
Okay. Understood. Sir, second question is on OPAL. If you could give the bifurcation between how much naptha did you use last year in FY ’24 and how much gas did you use?
Vivek Tongaonkar
I think it is broadly 60/40, 60% naphta, 40% of LNG, but for exact figures, I may have to check that out again.
Kishan Mundra
So this works, 60/40 works. And lastly, sir, on capex guidance, if you could give the capex numbers for FY ’26 and ’27?
Vivek Tongaonkar
Yeah. Just hold on. ’26, ’27, it is INR36,000 odd crores as of now.
Kishan Mundra
For both the years?
Vivek Tongaonkar
No. Which one? ’26, ’27 I told you.
Kishan Mundra
Okay.
Ajay Kumar Singh
’25, ’26 and 26 ’27 would be in the same range.
Vivek Tongaonkar
Yeah, more or less.
Ajay Kumar Singh
From INR34,000 crore to INR36,000 crore.
Kishan Mundra
Understood. Thank you.
Operator
Thank you. The last question of the day comes from Hemang Khanna from Nomura. Please go ahead.
Hemang Khanna
Hi, sir. Thank you for taking my question. Sir, I just wanted a clarification on the new gas volumes. So 4.68 MMSCMD new gas does not include 1.85 from KG, right?
Vivek Tongaonkar
No. It does not include that 1.85 from KG.
Hemang Khanna
Okay. Entire 4.68 is roughly at $9 per MMBtu of realization.
Ajay Kumar Singh
That is a free gas.
Vivek Tongaonkar
See, that is basically HPHT deep water gas, what you are talking about KG 98/2. This is from our nominated field what we were talking about, that 20% management.
Hemang Khanna
Correct. So the entire 4.68 is roughly at about, let’s say, $9 odd.
Vivek Tongaonkar
Exactly.
Hemang Khanna
Got it, sir. Got it. Thank you so much. Very clear. Thanks.
Operator
Thank you, sir. Now I hand over the floor to Mr. Vivek Tongaonkar for closing comments.
Vivek Tongaonkar
Yeah. Thank you very much and thank you all for those questions also and the interest that is being shown in our company. If you want any further clarifications or with the clarifications given here, do not meet or you require further information also, please feel free to contact our IRC cell and we would be happy to come back to you and provide you the necessary information. So thank you all and thank you from ONGC. Over here.
Operator
[Operator Closing Remarks]