Oil And Gas Companies Expected To Report Steady Second Quarter Earnings

Crude oil prices and the average currency rate (dollar-rupee) fell 0.7 percent and 0.1 percent respectively on a quarter-on-quarter basis, ensuring that energy firms did not face any sharp volatility during the three-month period.

For upstream companies like Oil and Natural Gas Ltd. and Oil India Ltd., flat volumes and realisations and no subsidy sharing burden during the quarter will help sustain profitability. GAIL India Ltd., however, will benefit from higher gas volumes and lower gas prices.

Downstream companies, like Reliance Industries Ltd., Indian Oil Corporation Ltd., and Bharat Petroleum Corporation Ltd., could see their sales volume grow but gross refining margins are likely to decline or remain flat. For Indraprastha Gas Ltd., margins are expected to improve on account of lower gas prices.

Oil and Natural Gas Corporation

• Oil and gas volumes are expected to remain flat or decline in the range of 2.7 to 3.5 percent.
• Crude oil realisation is expected to remain flat quarter on quarter.
• Subsidy sharing details, guidance on future capital expenditure, commentary on oil and gas production volumes and new investments in KG basin will be key things to watch.