State-backed Oil India's third-quarter profit falls on lower crude prices

BENGALURU (Reuters) - State-run explorer Oil India reported a 9.3% fall in third-quarter profit on Tuesday, hit by lower prices for crude oil and a windfall tax levied by the government.

Standalone profit was 15.84 billion rupees ($191 million) for the quarter ended Dec. 31, compared with 17.46 billion rupees a year earlier.

Average crude prices fell 6.5% in the December quarter, as per LSEG data. The Indian government's windfall tax on crude oil producers since July 2022 has also hurt its bottom line.

The government has set the tax rate at a level that ensures a steady range of $73-$76 per barrel net crude realisation for Oil and Natural Gas Corp and Oil India, analysts at ICICI Securities said in a note last month.

Last year, the government also reduced the prices of gas produced from old blocks to $6.50 per million British thermal units (mmBtu) from $8.57 per mmBtu, squeezing the realisation of ONGC and Oil India, which together operate old fields responsible for about 80% of India's annual gas output.

While revenue from Oil India's crude oil segment rose 5.7%, pre-tax profit fell 7.3%. Revenue from the natural gas business fell 15.1%, pulling down the overall revenue by 1% to 58.15 billion rupees.

Oil and Natural Gas Corp, another government-backed explorer, reported a 9.8% decline in quarterly revenue and a 13.7% fall in profit on Saturday. ONGC's crude oil price realisation fell 6.4% from the previous year.

Oil India shares closed 0.2% higher ahead of the earnings, after rising about 79% in 2023.

($1 = 82.9650 Indian rupees)

(Reporting by Ashish Chandra in Bengaluru; Editing by Dhanya Ann Thoppil)