Oil and Natural Gas Corporation Limited (NSE: ONGC) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Vivek Chandrakant Tongaonkar — Director, Finance
Arun Kumar Singh — Chairman & Chief Executive Officer
Rajarshi Gupta — Managing Director, ONGC Videsh Limited
Analysts:
Probal Sen — Analyst
Bhaskar Chakraborty — Analyst
Mayank Maheshwari — Analyst
Sabri Hazarika — Analyst
Varatharajan Sivasankaran — Analyst
Gagan Dixit — Analyst
Hardik Solanki — Analyst
Presentation:
Operator
Good afternoon, ladies and gentlemen. I’m Madhuri, moderator for the conference call. Welcome to ONGC’s Earnings Conference Call for quarter and year ended on 31st March 2025.
We have with us today, Shri Arun Kumar Singh, Chairman and CEO, ONGC Group of Companies; Shri Rajarshi Gupta, MD ONGC Videsh; Shri Vivek Tongaonkar, Director of Finance; ONGC team, who will interact with the investors and analysts to discuss Q4 earnings. [Operator Instructions] Please note, this conference is recorded.
I would now like to hand over the floor to Mr. Shri Vivek Tongaonkar for his opening remarks.
Vivek Chandrakant Tongaonkar — Director, Finance
Thank you. Thank you, Madhuri. Good afternoon, ladies and gentlemen.
I am Vivek Tongaonkar, Director of Finance ONGC over here. I welcome you all in this ONGC earnings call for Q4 and financial year ended 2025. Thank you all for joining us on this call. We have with us Shri Arun Kumar Singh, Chairman and CEO; ONGC; Sri Rajarshi Gupta, MD ONGC Videsh Limited. Also present with me are my colleagues from ONGC; Ajay Kumar Singh, Chief Corporate Planning; Shri Satish Kumar Dwivedi, Chief BD and JV; Yogesh Naik, Chief Corporate Finance; Shri Akhilesh Tiwari, Head Corporate Accounts; Prakash Joshi from Investor Relations; and Mr. Vinod Hallan, Head of Finance from ONGC Videsh Limited.
ONGC has compiled its financial results for the quarter and financial year ended 31st March 2025, which have been audited by the statutory auditors. The financial results have already been released on 21st May 2025 through a press note and sent to the stock exchanges. This has also been sent to the analysts who are on our mailing list. A brief synopsis of the result follows. The company has earned a profit after tax amounting to INR35,610 crores during financial year ’25 as against PAT of INR40,526 crores in financial year ’24, a decrease of INR4,916 crores, which is about 12.1% down. Sales revenue for financial year ’25 is INR1,37,361 crores against INR1,37,774 crores in financial year ’24 partly because of lower per barrel realization of crude oil.
During financial year ’25, operating expenditure increased marginally by INR753 crores, that is 2.8% from INR26,725 crores in financial year ’24 to INR27,478 crores in financial year ’25. During financial year ’25, there is an increase in exploration cost written off, survey and dry well costs by INR4,257 crores from INR5,569 crores in financial year ’24 to INR9,826 crores in financial year ’25. Major wells charged as dry during the financial ’25 were at Western Offshore Basin INR1,152 crores at KG basin INR1,808 crores, at Kaveri basin, INR779 crores and at Assam-Arakan basin INR359 crores. During the year, ONGC declared total 9 discoveries in its operated acreages. 8 hydrocarbon discoveries have been monetized during the year.
Reserve replacement ratio 2P from domestic fields, excluding JV share was 1.35. ONGC has achieved a reserve replacement ratio of more than 1 for the 19th consecutive year. During the year, ONGC drilled 578 wells, this is the highest recorded in the past 35 years, comprising of 109 exploratory wells and 469 development wells. ONGC invested around INR62,000 crores in capex during the year, thus achieving highest ever utilization, including acquisitions in a financial year. Exploration capex of INR10,300 crores was invested in during the year. This is up about 25% from the previous year. The stand-alone crude oil production during the previous year — during ’24-’25, was 18.558 million metric tonnes, which is an increase of 0.9% over the previous year.
The stand-alone natural gas production was 19.654 BCM as against 19.978 BCM in financial year ’24. To address the production decline in matured and marginal fields, ONGC is proactively enhancing well interventions and accelerating new well-drilling initiatives, which includes the recent engagement of technical services provider. The Board has recommended final dividend of 25%, that is INR1.25 per share. With a dividend payout ratio of 43.3%, the total dividend for financial year ’25 would be 245% which — with a total payout of INR15,411 crores. This is the highest quantum of dividend paid by ONGC.
The company at a consolidated level, has earned profit after tax of INR38,326 crores during financial year ’25 as against INR55,272 crores during financial year ’24. This is a decrease of about 30.7% of absolute terms INR16,976 crores. This decrease is mainly due to a decline in profit of subsidiaries HPCL, MRPL and Opal. At the consolidated level, gross revenue has increased by 1.5% from INR6,53,171 crores in financial year ’24 to INR6,63,262 crores in financial year ’25.
With this, I finish my briefing of the results of fourth quarter and financial year ’24-’25. Now I will request Shri Arun Kumar Singh, Chairman and CEO ONGC, to address the attendees. Thank you.
Arun Kumar Singh — Chairman & Chief Executive Officer
Good afternoon, ladies and gentlemen.
If you look at our performance, it can be classified or bucketed basically in 3 categories. One is our conventional E&P business, then second is renewable and third is our refining and petrochemical. So first category, let’s look at E&P. E&P, basically what our PAT going down by 12% is if you single only reason, you can say is out of INR4100-some-odd crores, INR4,200 crores is on account of exploratory well write-offs. Exploration in our business is something like investment. It gives — unless you explore, you don’t fund new finds, you don’t get.
And unless you get new finds, your future is not assured. So you would notice that this year, we have accelerated our exploration on both sides. So capital expenditure itself is now 25% up. And naturally, we had some discovery, we had some dryouts, dry wells too. So basically, if you discount these write-offs, then our profit is at the same level, PAT is at the same level. So that is the first thing which I wanted to say. The second part is that contrary to a general belief and numbers over many years, this year, last year. And basically, we — at a stand-alone level, our production went up on oil side. And this a very heartening news because we believe that our — this positive story will remain and because of the actions that we have taken.
Now you’ll say that why — what is it giving us confidence? That is also reflected in the fact that despite PAT going down by 12%, we kept dividends at the same level because we feel that we can sustain this, we can do better next year and primarily on account of production increase. Production, in fact, if you — the moment we are done with 98/2 gas production will go up. And also, you are aware that we are in the throes of doing 10 MMSCM more production capex work, which is absolutely on dot. And hopefully, in the last quarter of ’25, ’26, we’ll get 5 MMSCM additional from the project, which is almost 60%, 70% complete in Western Offshore.
Let’s come to oil. Oil side while we have done many interventions to make sure that we remain steady in our existing fields. We have big hopes from ESP that we have signed with BP and that is dot on course for April, all the resources of BP are in our establishment, and we are also thankful to them for giving the best talents for enhancing the production of Western Offshore, that is Mumbai. Hopefully, it should start showing results after some time, and that is the hope we have that and also some more improvement in 98/2 in oil production. So these 2 put together, we are sure of our oil going up, gas, I told you that 98/2 main platform is to be put in place. Everything is done except for one platform, which is basically living quarters. So that work once we do then we can enhance production there.
And then also DUDP that is the one upside and then we have another DSF in Western Offshore, which is also around 4 to 5 MMSCMD. So with this, we are very, very confident that we will have our growth story intact. At least what we have done is not flash in the pan. Earlier, we were going negative, but now you see at least we have turned positive and we hope to remain positive for years to come. That is so far the production side is concerned. And now 2, 3 more things just I’ll cover, one thing is that we are investing big into future out of INR62,000 crores. The capex we spent last year, we have INR38,000 crores we spent in conventional business, E&P, INR18,000 crores we infused into OPaL the ONGC ownership is now 95% plus. And also that basically that what we have promised to our shareholders, we have delivered.
When we’re investing in, OPaL you all had a lot of questions that what will happen to the gas, raw material, what will happen to the SEZ, what will happen to — third question was 3 factors, no, capital restructuring. So now you know that OPaL at least from this quarter onwards, we hope to have a very, very good performance compared to yesteryears. So all 3, we delivered. It is out of SEZ now which is giving a INR700 crores to INR800 crores per year boost. We invested INR18,000 crores. So now the finance cost is down to this extent because this was all money line, loan and we are paying interest, OPaL was paying interest. And of course, the big thing is gas, the input gas now is available to them in a new oil gas price, which is roughly $8 at current price against market price of $13 to $14. So OPaL turnaround is benefit both to ONGC and OPaL both, because it is a subsidiary.
You may be aware that one more subsidiary that is HPC, the going is good now. So naturally, we expect that this will also do very well. This quarter, even MRPL is doing very well. So if refining margin remains at this level, we can expect OPaL — MRPL also to do very well. So all 3 big ones. And this year is also — you may be aware that from OVL side, a big laggard was Mozambique delay. But now Mozambique is almost — work is happening almost now any day we expect force majeure to be called off, but work in any case has started in a big way. So we expect Mozambique to be delivering its best in next 3 — after 3 years. So that is something a very big upside for ONGC as well as for OVL.
Now coming back to dividend payout, or our friend Vivek convey to you, that is 245%. We are also proud at least to say that among CPSEs, not the banking sector. If you leave banking sector, CPSE, central public sector enterprise, ONGC is the highest profit-making CPSE, and even among any company of government in country. So that is something that we are very proud of.
Now I come to futuristic thing. We don’t mind sharing with you that OPaL, we are on the verge of closing everything for its ethane sourcing from 2028 right from terminaling to sourcing to shipping. So this is something that is a good boost for OPaL because OPaL will need ethane in bigger numbers. LNG business is something that is a natural bet for us because you will be aware that we can have a model where all the integrated oil companies or gas companies have lovely — those who produce — they have a natural hedge when they sell. So because oil and gas, if it links goes up, you make a lot of money there, if it goes down then you make a lot of money in the downstream side. For LNG downstream, we have big aspiration.
Hopefully, you’ll get to hear something big once we are — once we cross the threshold. Now you are aware that we have roughly 30% of — our offshore fleet is basically, we have lots of requirement of vessels and hydrocarbon transport vessels. So naturally, we are thinking of investing big in this resell business, too, because this is something that it is our line of business and also continues to be a good profit space. Green energy, I just want to tell you that in 1 year, I don’t know how many examples in the world is there where you jump from 0.1, 0.2 gigawatt to 2.5 gigawatt in 4 months, in January ’25, if I remember correctly, we were at 192 megawatt. As on date, we are almost 2.5, if I’m correct, but 2.23, 2.34 is INRplus PTC. And plus, you add our 192 we already had. So we have now 2.5 gigawatt.
Anybody having more than 1 gigawatt in the renewable space is considered formidably. So I’m very happy to see that ONGC has become formidable in no time. In no time, I repeat, in no time, it has become a formidable force for — in the renewable energy space. You may be aware, we have planned to work with 10 gigawatt. Today, we are 2.5, so 7.5 we have to add by 2030. So every year, our rally should be around, if you go by 1.5 additional to reach that goal of 10 gigawatt, which holds us in good state from both sides from a profitability point of view and also from renewable commitment to the world that being a fossil fuel company, we’ll do our bit of job to see that world is greener and better and also making a good business sense. So now this is something this area that we are doing well, and we hope to do better in the years to come.
Now coming to KG, KG as you know, your favorite 98/2, we are at 33,000, 34,000 barrels a day with peak production around 45,000 barrels a day. Peak production happens when the wells mature and also the reservoir all conditions satisfied. As you are aware, we started our production sometime in January ’24. And gradually, we have been ramping up to reach up to 34,000. So you should — so another 10,000 to 12,000, we should expect from this field over the period of time.
Now coming to gas, gas is something that we are producing well. And once we are done with everything, we should reach our target of 10 MMSCM. Now it is something that it is extremely good reservoir, and also, it is realizing good price for its crude because every month, we sell it on auction or something, there is a massive interest from everyone for this crude as visible in the rate that we get mostly better than Brent. So that is something that this year term contract we have signed with 1 other company for December ’24 to March ’26, for approximately 20 cargoes. And this is something that we want to tell you is a term contract with another company for 12 cargo. So this is something that this product of this field is something that has really stabilized.
Natural gas, I told you, KG basin and UA, both. Now we have some sales on exchange happening, IG sales. So that number — 1 big story, which I missed is, this year, our — roughly, we sell 42 MMSCM a day. And this year, our new well gas has already reached 20% of that. Today — this month, we are hovering around 20%. With every year, this is likely to go up by 10% to 15% more. Last year’s new well gas gave us because the price of new well gas is 12% of crude. Naturally, this is much better than the 12% of crude. Even if you take 65 and all that, it comes around $8 MMBtu, which is much better than 6 points, something that we get for APM. This additional revenue last year was around INR700 crores. This year is likely to become — if all goes well and the prices remain stable, this is at least should add to ONGC KT for not less than roughly around INR1,500 crores to INR2,000 crores additional.
So this is what I wanted to share with you, Mozambique, I shared with you. Mozambique, you know more than me because this has been in the air for quite some time. And that we have — I’ve shared with you the LNG, I think I’ve covered everything. But one more thing I want to share with you, while revenue you saw, but we are very proud to report that cost side, we have done very well. Cost side is almost ’24, ’25 cost, almost at flat level of ’23, ’24. So you can appreciate that point that against the natural inflation of 4%, 5% and natural increase in many things. It means management effort in containing costs is paying off.
So all I wanted to tell you that should the requirement be more to focus more on cost, we will not hesitate in taking drastic steps. Big improvement in cost around 2, 3 sites, like our logistic cost is much better now. Second, we have opened a new port because most of the new activities in Western Offshore is more closer to Gujarat. So we have created another base to serve our Western offshore from Pipavav, So that fields which are closer to Pipavav will be served from Pipavav so that we save a lot of money in logistic cost. And the field which is closer to Mumbai will be served from Mumbai. This is one opportunity that gradually, we see that a lot of savings will happen on that account because the distance of travel of everything, we have moved a chopper also to Surat.
So that we serve Gujarat side, we serve from Gujarat and this side we serve from here, which otherwise, we were serving. But need has arisen just now, just 1 year back because a lot of new exploration and new production is going closer to Tapti and the basin and satellite fields for gas, which I told you, DUDP or DSF, all are in that region. So naturally, this side we expect — so what I wanted to tell you that cost side, we will do as much as we can. However, tough it is to take that decision we will take. Revenue side, I told you, the future, I told you, renewable, I told you, OPaL, I told you, MRPL, I talked about, HPCL I’ve talked about. So this is some substance of the whole story.
Thank you.
Questions and Answers:
Operator
[Operator Instructions] The first question comes from Probal Sen from ICICI Securities.
Probal Sen
I have a couple of questions. Firstly, as far as KG 98/2, you mentioned the oil production level of 33,000 to 34,000 going to 45,000 barrels of oil per day. Can I give a similar number for gas in terms of when has production officially started? What is it right now? And when do we expect to get even as a range, when do we expect to get hit the 10 MMSCMD target?
Arun Kumar Singh
So once the platform that — just I want to share with you more, all wells are ready, all pipings are ready, all the gas flow lines are ready, platforms for processing platform is ready. All we have to do is to install a living quarter. Living quarter unless living quarter comes, that operation because controls are there. That work got delayed for some reason. And we are hopeful that we’ll get — it will get done because we’re waiting for weather to — once weather improves, then it will get done. So I want to give you a ballpark number. Right now, it is — we are producing roughly 2.75 or so. We will move to another level of 6 to 7 once the platform gets done because then we’ll open the process and all that. This is a minimum we’ll begin with. And then over some time, what time it will depend on the maturation of field and reservoir condition. We will reach our peak stated production of 10. So this is what the numbers look like.
Probal Sen
Sir, if I can try and summarize as per my understanding, current 2.8 will go to 6, 7, hopefully sometime in this financial year, and then maybe peak production or maybe sometime next year, assuming everything goes well. Is that a fair assumption?
Arun Kumar Singh
Yes. That is certain. But one thing I want to tell you, almost same number will come 5 MMSCM will start coming from January to March in Western Offshore from the new field for DUDP. That is…
Probal Sen
This will be January to…
Arun Kumar Singh
January, March of…
Probal Sen
January, March 2026?
Arun Kumar Singh
Yes, exactly. But financial year ’24, ’25 — ’25, ’26, sorry. So this will — and this project is on dot. All the rigs are in place, jacket has come. So drilling is going on. 4 months will take to drill a well. After that platform is already fabricated. We have to just mount on it. And then January to March, we’ll start opening the wells one after another. So that 5 MMSCM is additional you can take in our KT in last quarter. That is also a big number because 5 MMSCM is roughly approximately 1.75 million tonnes.
Probal Sen
Right. And sir, this 5 MMSCMD, what will be the pricing of it? This will also be based on HPHT pricing or which will be new well pricing?
Arun Kumar Singh
No, it is a new well pricing. KG basin is HPHT.
Probal Sen
Yes, sir. This is what I was clarifying. But this — the 5 MMSCMD from Daman upside will be on new well prices, right?
Arun Kumar Singh
New wells, yes.
Probal Sen
The second question, if I may, it was around OPaL, a couple of things I wanted to clarify. The first was in terms of the input requirement as of today, we are — correct me if I’m wrong, we are currently consuming for a mix of naphtha and gas in a certain mix. Is that correct?
Arun Kumar Singh
Exactly. The design is like that. It requires some naphtha and majority gas.
Probal Sen
Is it possible to share the exact volume, sir? How much of naphtha and how much gas has been consumed today?
Arun Kumar Singh
Currently, we are operating 60-40, 60% naphtha and 40% ethane.
Probal Sen
And this, we expect to move almost entirely to ethane, once our ethane import facilities are done?
Arun Kumar Singh
Naphtha and ethane.
Probal Sen
And this proportion will remain the same?
Arun Kumar Singh
Same, same, same. Right now, ethane we are getting from rich gas that will get replaced by US gas.
Probal Sen
Sir, one more, just last question on OPaL, when we say that moving away from SEZ has added or will add about INR700 crores to INR800 crores, I believe, is what you said. Just wanted to understand exactly what changes? How does this benefit actually come about?
Arun Kumar Singh
So basic comment is very simple. We conceived OPaL in 2006 based on the assumption that we’ll export the product. We took it in SEZ zone. But in next 10, 15 years, what happened in the country is that country’s own indigenous demand grew. So today, today, OPaL is 92%, 93% indigenous. So which was paying both the duty. When we are selling in domestic market, we would pay custom duty as well as excise. Now custom duty is gone. That money is coming to around because once it is out of SEZ notified. So now from effective 4th April, 8% to 9% saving is there in the — in this way. So it is exactly what we told you. Depending on price, it depends on what happens in the petchem price because you import parity and all that. But given the fact that — at one point in time, it was hovering around INR850 crores to INR900 crores. Now of course, the prices fall on maybe INR700 crores to INR650 crores or so.
Operator
[Operator Instructions] The next question comes from Bhaskar Chakraborty from Jefferies.
Bhaskar Chakraborty
It is very heartening to see daily core production rising 2 quarters in a row. Could you share with us whether this trajectory is going to remain like this over FY ’26 and ’27? And what kind of production targets do you have on the crude side?
Vivek Chandrakant Tongaonkar
So month-on-month, of course very difficult to say. But at least you know that we expect some number to kick in from in this FY itself and by the year-end from TSP initiative, some number. While all the numbers will come in ’26, ’27. ’27, ’28, but some number we expect to kick in ’25, ’26 itself. So for us, basically, we are saying that we are hoping at least in ’25, ’26, it should be around — is around 21.5 million tonnes. So that basically, this trend should continue. And because they have no reason to — because everything has stabilized now and you may be aware that surface facility in Western Offshore, we have improved as a part of our steps for not making a system lose any tonne. So pipelines, maybe everything, whatever we could have done that is on course.
Bhaskar Chakraborty
And just DSF field, is there a time line around which that is going to come online?
Arun Kumar Singh
DSF is ’26 December, if I remember correctly because DSF is around 4.5 or 4 MMSCM, that work is going on, but still because we have some — all orderings done, everything is getting fabricated. So once we have in January, March, we have both 98/2 upside and then such things. And then after that, 98/2 additional production and some ’25, ’26 end, this Daman — DSF block will come. So we’re hoping that for 2, 3 years, at least, we have planned everything for production to remain up.
Bhaskar Chakraborty
Like you share for crude, would it be possible for you to say the gas number also, for FY ’25?
Arun Kumar Singh
Gas number, we said that from now, we have roughly — we are saying that ’25, ’26, we are hoping around 21. And then ’26, ’27, we are hoping around 22, so 5%, 6% increase each year, year-on-year. Stand-alone I’m talking about.
Operator
The next question comes from Mayank Maheshwari from Morgan Stanley.
Mayank Maheshwari
Sir, my question was a bit more long-term question, which you kind of commented earlier in terms of trying to kind of grow your fleet yourself and invest in there. Can you just give us a bit of a view of how you’re thinking about those investments for yourself as well as on the cost side, you did talk about a few areas of cost controls. Can you give you detail out there as well of what you’re kind of doing incrementally for the next few years to kind of keep costs under control?
Arun Kumar Singh
So cost side, some tailwind from market itself because rig rates which was — we, at one point in time, we’re taking at $90,000 a day that is now down to $35,000 a day. So you can infer your own numbers because we have around 30 such rigs in our Western Offshore. So cost side, we are very, very bullish that whatever contract we signed — this contract, what we have signed is for 3 years. So if the same trend continues, it means our average rig cost and cost is out of INR40,000 crores, INR10,000 crores is our rig cost. So that is a major component.
Second is you — as I had mentioned to you that our chopper movement, our vessel movement, that is also around INR6,000 crores to INR7,000 crores. That we have organized in such a way that it has traveled less, by opening a base in Gujarat. So that also is supposed to give us some good money. And now, in fact, we have also some couple of more measures like internal measures, like better manpower deployment, better growth opportunity and all that. So naturally, that side also we have done well, and we’ll continue to do well. So these 3, 4 things could give us a good handle on cost. It has given half, we’ve almost achieved 50%. But 50% more we can achieve in next — this FY or next FY.
Fleet, your question was about fleet. Fleet, I’ll just say that we have — you can imagine, we have roughly 50 to 70 vessels, which we take from market. So as a strategy matter of strategy, our own — if you own the vessel also in some space of vessel will be more profitable because there is a shortage of vessel in the world, and we are paying — we feel that we are paying more than — acquisition would be probably a better model because some of that market is not responding to new investment in some category of vessels. So that is the opportunity we have before us. So that is what we are talking about.
Mayank Maheshwari
And sir, just one more follow-up on — I think on the point you made that 20% of your volumes on gas right now on the new gas, surprising. Do you — how do you see that kind of filter through in FY ’26 and ’27 now this number could kind of…
Arun Kumar Singh
Every year, you should expect 15% to 20% of gas coming to new well side, NWG. So in 5 years’ time, 6 years’ time, everything will be NWG, new well gas.
Mayank Maheshwari
Got it. So this year as well, so 20 another 20 could come in this year and then another 20 next year…
Arun Kumar Singh
Yes, exactly. Because now it is getting accelerated because you might have seen in our report annual result, we have drilled last year 578 wells which is highest in the history of ONGC in the last 35 years. So it is primarily attributed to 2 things. One, new well gas because we have drilled more and more because it’s more and more attractive. And therefore, you would notice that we have arrested decline rate of — normal decline rate of any gas field is not less than 6% to 7% a year. So we have compensated the full by drilling new wells, and it is very remunerative because prices are good.
And in our country, gas prices still I’m saying that though we’re getting it, but market today for a spot is still $13, $14. So sky is the limit as long as we keep — we don’t lose product — We don’t lose production and keep producing. So second thing we have done very well is the exploratory wells. So in fact, we have drilled high number of exploratory wells, and we have drilled a high number of new gas wells. So this is something that both are commercially very sound and also futuristic.
Operator
The next question comes from Sabri Hazarika from Emkay Global.
Sabri Hazarika
Sir, I have 2 questions. First one is with respect to the policy scenario. So the government has come up with a lot of response in the last few months, new rules as well as the act which has been amended. So how do you see the scenario panning out in terms of like tie-ups with global technology provider and also commercial agreement in some of the frontier assets, et cetera?
Arun Kumar Singh
So 2 areas. One area, you are aware that we have already signed with TSP with one of the IOC for Western Offshore, which is our crown jewel asset. There, in fact, reservoir is something that we were able to extract, but we want to extract better and faster. So this is something that has happened in Western Offshore.
Now second area, which — we are thinking of or we are in the process to find out some sort of — in one field, particularly, that is for cluster 3, a lot of gas is there, but somehow it is not coming to surface. So gas not being there is not an issue. Gas is there that every time we drill and we find. So there, we are seeking for some technology support in some form of partnership or something. And that we are in discussion with some people. And hopefully, something should happen. Then that area, we have not so far factored in, in our calculation because so far, we are only cluster 2 and cluster 1. Cluster 2, we are producing and cluster 1 we’ll shortly do something. But cluster 3 is something that — is something we are looking for some partnership to bring that gas to surface. So there is something, there’s something technology challenge problem because some would know and some would not. So there is something that we are looking for some partnership.
Sabri Hazarika
And just a small bookkeeping question. I think it was mentioned in the opening remarks also. So regarding the dry well write-off. So where exactly was it? And can we expect this run rate to continue or to keep fluctuating?
Arun Kumar Singh
No, what happens is that some year, you get more dry wells, some year you get less dry wells. So it is very difficult to predict at what will be next year, but this was a bad year in terms of more dry wells happen. But if we don’t drill, then we don’t get, at least 7 to 8, you would notice it out of every 7 to 8 wells globally, you have a discovery. So if we don’t drill, you don’t get discovery and they don’t accrete reserves. Oil companies — oil and gas companies, value comes out of reserve accretion. So that is the issue that we are — so one choice is to not drill and allow to deteriorate, second choice is to drill and accrete, more so for our country and our company. We need to explore more and more. It is investment into future as simple as that, like you invest in share market for long-term share market.
Operator
Our next question comes from Varatharajan from Antique Limited.
Varatharajan Sivasankaran
Just focus on this new investments which you referred to. So in the light of all the initial plans you have laid down. What would be the capex guidance year-on-year? And how much will be spent on each of them? What is the current thoughts process on that?
Arun Kumar Singh
So like last year, we have spent, capex — you mean E&P sector, right?
Varatharajan Sivasankaran
No, overall, if you’re looking other areas as well — going forward, how would we be looking at it?
Arun Kumar Singh
So now, with the services costs falling that likely we are expecting some fall there. And if whatever plans we have gone, our capex should hover anything between INR30,000 crores to INR35,000 crores. So this is something that will include all. In fact, there will be some renewals with some E&P because you are aware that we have — OPaL we are done with. So basically, E&P and renewable put together, we expect INR30,000 crores to INR35,000 crores max.
Varatharajan Sivasankaran
And how would the other new business like LNG and shipping?
Arun Kumar Singh
LNG doesn’t require capex. Basically, unless we buy some assets abroad or some LNG terminals we buy, otherwise, LNG we all have to do is to do a long-term deal. And that’s it, and they’ll provider us — it is opex kind of model where you buy and sell, the trading.
Varatharajan Sivasankaran
Fair enough, sir. And on the OVL front, you mentioned Mozambique, any update on the other assets such as Mozambique as well?
Arun Kumar Singh
So I’ll request MD OVL to answer this.
Rajarshi Gupta
Good afternoon. Thank you. As chairman sir has replied that Mozambique, we are doing very well. We see now the progress happening on a modular concept all over the world for the equipments and other things to happen. The beach lending for the equipment to come in and start construction has also been completed. We expect force majeure to be removed any time now, and all the vendors are in place. So we are confident that by late ’27, early ’28, we should have commissioning of these LNG claims.
On the other assets, we — our production in Russia is as normal as ever, and we had increased our production in Colombia, South Sudan, and then also we have added our production in Azerbaijan. We are doing well in Lower Zakum, it’s where the production is back to above 400,000. So on an operator, join operators project, when you see Videsh production has been — has increased by 9% last year. And so we see that there will be only the upside as we go ahead, there are a few other business development opportunities that we are pursuing. As and when that happens and that those fructify will come back and inform the market as soon as it is done.
Varatharajan Sivasankaran
Sir, if anything on structurally as well as potentially?
Rajarshi Gupta
Sakhalin — let’s come to Syria first, Syria, we had 2 projects. One was a AFPC Syria where Shell was operator, and we had 1 block, block 24 where we are the operator. Both were producing properties. Block 24 was under development. This recent development of the sanctions being lifted in Syria. We are trying to understand all the implications of that. The — how the things stand on the ground, how our partners will look at it going forward. But it’s a good sign that if things come back to normal, it will only help us. On Sakhalin, let me reiterate that, we got the approval of the Russian Federation in November 2023, that took a 20% stake in the incorporated entity. It also — and the production has been going on as normal there.
It was — it had come down to 0, and it had picked up to 180,000. Now it’s around 150,000, 160,000 barrels. Whereas an issue of our shares being issued from the registrar on our transfer of abandonment fund, which we hold here due to the banking channel restrictions. We are expecting that the requisite decrease for transferring those abandonment fund in rubles would come through soon. In parallel, as you are also hearing, we also hear that there is some discussion on the geopolitical scenario between the different stakeholders on how to resolve the Russia-Ukraine conflict, and we see only upside there also. If the sanctions are lifted and other things happen, it will quickly — then we can move ahead with that.
Operator
The next question comes from Gagan Dixit from Elara Securities.
Gagan Dixit
Just for the bookkeeping question. Since December, I’ve observed that you have changed the classification of the sales revenue in your release, that I mean this crude oil — this JV in the non-operated and operated JV and same for the gas, I think that you have done, but I think you have maintained the same production and sales volume at the earlier classification, I think. So it would be helpful, if you can tell what is your operated JV value or at least the operated — I mean operated JV sales volume and production that’s just easy for the apple-to-apple comparison actually.
Arun Kumar Singh
So Gagan, actually, if you see, previously, we were providing the entire revenue that was basically one was for nomination. The other one was for JV, which included our KG 98/2 and other 100% operated JV. Okay? Now if you see even see the data which we have sent and which is there on our website also, there we have segregated our production figure as well as sales figure in line with whatever areas, wherever we go and put up any figure, whether it’s a mystery site or whether it is our press release. So all the data are matching over there.
Gagan Dixit
Okay. So that is also in that…
Arun Kumar Singh
Yes, you can refer our site also for that purpose.
Operator
[Operator Instructions] The next question comes from Hardik Solanki from ICICI Securities.
Hardik Solanki
So there has been a restatement in the JV volumes when you look at. So may I know the reason for FY ’24, there’s restatement and there’s a decline we’ve seen in FY ’25, right?
Arun Kumar Singh
Sorry, come back, Hardik.
Vivek Chandrakant Tongaonkar
JV production. Restatement of JV.
Hardik Solanki
So basically, if you look at the volume numbers, which are being given in JV in the analyst file which you shared, right? So over there the JV volume — the JV volume have been reinstated for the FY ’24 if you look at the oil production and the gas production both.
Arun Kumar Singh
Yes, yes. So actually, I told to previously also, what was happening when we were putting JV, the NELP production was also part of it. And even our 100% operated JVs were also part of it. Now we have put all those under the stand-alone. So now whenever you see our stand-alone production, there you will find production, which includes KG 98/2, the non-operated JVs are only — they are under the head JV currently.
Hardik Solanki
So basically, it’s only our share, right?
Arun Kumar Singh
Yes, it’s our share only.
Hardik Solanki
Okay. So we reinstate this year for FY ’24 as well?
Arun Kumar Singh
Yes.
Hardik Solanki
Yes. And secondly, on the OVL part, even OVL if you look at there some revenue reinstatement of the crude oil, there was a major jump in the oil revenue for OVL. So can you please throw some light on that?
Arun Kumar Singh
Yes, I think there was a reinstatement for FY ’24. We sell our Lower Zakum crudes to our ONGC subsidiary. And we had taken it that as an agent, they were selling the crude. But now we have considered it as a principle and booked it to the main revenue part.
Hardik Solanki
Sure, sir. One more thing. From this year, we have also considered the OPaL, right?
Arun Kumar Singh
Yes.
Operator
That would be the last question. Now I hand over the floor to Shri Vivek Tongaonkar for closing comments.
Vivek Chandrakant Tongaonkar
Yes. Thank you all. Thank you all for being present in our analyst call. And on behalf of ONGC, on behalf of Chairman ONGC, I wish all of you all the best, and thank you very much.
Arun Kumar Singh
Thank you.
Vivek Chandrakant Tongaonkar
Thank you.
Operator
[Operator Closing Remarks]