InvestorQ : Why did Oil India post a net loss in the Jun-20 quarter?
Mahima Roy made post

Why did Oil India post a net loss in the Jun-20 quarter?

9 months ago

You are right that Oil India reported a net loss of Rs.249 crore for the Jun-20 quarter. This was largely on the back of weak crude oil prices which in turn resulted in weak oil price realization during the quarter.

For the Jun-20 quarter, the total sales of Oil India nearly halved on a YOY basis to Rs.1744 crore. This was a combination of a number of factors. There was the impact of the lockdown, labour issues, logistics disruption as well as the fire at its Baghjan well in Assam.

The key reason for the fall in profit was visible in the average crude price realizations during the quarter. For example, in the Jun-20 quarter the average realization was just $30.43/bbl as against the average realization of $52.81/bbl in the Jun-19 quarter.

While crude prices were a major issue for Oil India, even natural gas realizations fell by one-third due to lower gas prices. Oil India breathed some sigh of relief after the demand of spectrum fees and AGR charges from Oil India was withdrawn by DOT on court order.