ONGC shares gain 7 per cent, as it gets license extension in Vietnam Oil block

The Shares of Oil and Natural Gas Corporation (ONGC), zooms about 7 per cent on Friday (28th August) as the company's overseas arm ONGC Videsh (OVL) gets a one year extension of exploration licence for a Vietnam oil block in the contested waters of the South China Sea. The stock closed at Rs 230.75 on Thursday (27th August) and touched a day high of Rs 246.25 on Friday in the Bombay Stock Exchange (BSE).

Earlier, OVL has signed Production Sharing Contract (PSC) for the Exploratory Block 128 having an area of 7058 square kilometres in Offshore PhuKhanh Basin, Vietnam on May 24, 2006. The Ministry of Planning & Investment (MPI), Vietnam issued an investment license for the Block effective from June 16, 2006, (date of the PSC.)

As per the reports, it is the third extension of the exploration licence, OVL first took a two year extension till June 2014 and then another one year. The block was under Exploration phase-1 upto June 15, 2015 and the company had applied extension of block to the Petrovietnam on May 28, 2015. In response of OVL request, Petrovietnam has granted extension of the block upto June 15, 2016. The company has so far invested USD 50.88 million in the block.

ONGC recently declared its June quarter results and the company reported a 4.46 per cent year on year increase in revenue, which stood at Rs 22825.25 crore in Q1FY16 compared to Rs 21851.27 crore in Q1FY15. Its net profit increased by 14.18 per cent to Rs 5459.90 crore in Q1FY16 as against Rs 4781.79 in Q1FY15. The company's EBITDA margin expanded by 579 basis points to 46.36 per cent and the PAT margin expanded by 204 basis points to 23.92 per cent in Q1FY16 as compared to the same period of previous financial year.

ONGC's shareholding pattern indicates that FII holdings expanded by 31 basis points to 7.23 per cent and DII holdings contracted by 16 basis points to 10.43 per cent during Q1FY16 as compared to the same period of last year.

ONGC is a multinational oil and gas company headquartered in Dehradun,Uttarakhand, India. It is a Public Sector Undertaking (PSU) of theGovernment of India, under the administrative control of the Ministry of Petroleum and Natural Gas. It is India's largest Oil and gas exploration and production company. It produces around 69 per cent of India's crude oil(equivalent to around 30 per cent of the country's total demand) and around 62 per cent of its natural gas.