ONGC's Profit Soars 57% to ₹15,489 Crore on High Crude Prices, and It Declares a Record ₹8 Dividend Worth ₹10,064 Crore

Oil and Natural Gas Corporation, India's largest oil and gas producer, reported a sharp jump in quarterly profit as high global crude prices, driven by the conflict involving Iran, boosted the value of its output, even as production volumes edged lower.

The state-owned company posted a standalone net profit of ₹15,489 crore for the July-September quarter, the second quarter of the 2026-27 financial year, up 57.3% from a year earlier, according to its results announced on Thursday, November 5, and reported by PSU Connect. Standalone gross revenue rose 32.8% to ₹43,875 crore.

For the first half of the financial year, ONGC's standalone net profit was ₹32,522 crore, up 82%, its highest ever for a first half, and gross revenue rose 38.9% to ₹90,336 crore.

On a consolidated basis, including subsidiaries such as Hindustan Petroleum and Mangalore Refinery and Petrochemicals, net profit rose 46.9% to ₹18,535 crore, and net profit attributable to owners rose 55.3% to ₹16,744 crore, on gross revenue of ₹1,98,263 crore.

A record dividend

ONGC's board declared an interim dividend of 160%, or ₹8 per share on a face value of ₹5, amounting to ₹10,064 crore, the company's highest ever in a single instalment, according to PSU Connect. The record date is November 12, 2026.

The government, which owns a majority stake in ONGC, will be the largest recipient of the dividend, providing a boost to public finances at a time when high oil prices are straining India's import bill.

Crude prices drive profits

The surge in profit was driven by much higher prices for ONGC's crude oil. The company realised $92.33 per barrel for crude from its nominated fields in the quarter, up 37.1% from a year earlier, according to PSU Connect. In rupee terms, the realisation rose 50.2% to ₹8,826 per barrel, reflecting both higher dollar prices and a weaker rupee. Crude from joint venture fields fetched $97.02 per barrel, up 41.9%.

Global oil prices have risen sharply this year because of the conflict involving Iran, which has disrupted supplies from the Middle East, including through the Strait of Hormuz, a critical route for global oil shipments.

Gas prices also rose. ONGC received $7.00 per million British thermal units for gas from its nominated fields, up 3.7%, under India's administered pricing formula, and $10.24 for gas from new wells, up 22.5%. Revenue from new well gas in the first half was ₹7,050 crore, more than 34% of the revenue from ONGC's nominated gas portfolio.

Production slips

Despite the higher profits, ONGC's production declined. Standalone crude oil output fell to 4.437 million tonnes in the quarter from 4.630 million tonnes a year earlier, and gas output fell to 4.839 billion cubic metres from 4.918, according to PSU Connect. Total standalone oil and gas output, excluding joint ventures, fell about 3% to 9.515 million tonnes of oil equivalent.

The company attributed the year-on-year decline to reservoir complexities at its KG-98/2 asset in the Krishna-Godavari basin, monsoon-related challenges, pipeline replacement delays and lower gas offtake by onshore consumers. "ONGC maintained broadly stable production during Q2FY'27," the company said, compared with the previous quarter.

Reversing the decline in output from ageing fields has been a long-standing challenge for ONGC, and a key priority for India, which imports more than 85% of its crude oil needs.

Investing in new production

ONGC is investing in projects to boost output. In its western offshore region, which includes the Mumbai High field, it awarded two development projects at a combined cost of about ₹11,800 crore, with estimated potential of 22 million tonnes of oil equivalent, according to PSU Connect. It also awarded a pipeline replacement project costing more than ₹4,300 crore.

ONGC has engaged bp as a technical service provider for the entire western offshore region, with bp's team mobilised in August 2026, to help improve production from mature fields. It also took over operations of the CB-OS/2 block in July.

New discoveries

ONGC notified two onshore discoveries in the quarter: Amraghat-1, a new prospect in the Assam-Arakan fold belt, and Vadatal-48, a new pool in the Cambay basin. Under the government's Samudra Manthan deepwater exploration mission, its first exploratory well in the Mahanadi deepwater basin was found to be gas-bearing.

Deepwater exploration is seen as crucial to India's efforts to increase domestic production, as many of its onshore and shallow-water fields are mature.

Energy security

ONGC's results highlight the double-edged impact of high oil prices on India. For ONGC and other domestic producers, high prices increase profits. For the economy as a whole, they raise the import bill, put pressure on the rupee and push up inflation. India's government has sought to cushion consumers from higher prices through measures affecting fuel taxes and the pricing of products such as LPG.

Oil price outlook

Oil prices fell sharply on November 4, with prices dropping nearly 9% to a two-month low on hopes that the US midterm election result could speed an end to the conflict involving Iran. Prices rebounded later in the week, with Brent at about $99.70 a barrel on November 6, according to FinancialJuice. Future movements will significantly affect ONGC's profitability.

Why it matters for investors

ONGC offers investors exposure to oil prices, high dividend yields and India's energy security efforts. Its shares have been supported by strong profits and dividends, but they remain sensitive to government policy, including windfall taxes and pricing decisions that can limit the company's ability to benefit from high prices.

The government's windfall

High oil prices have delivered a significant financial boost to the government through ONGC's record dividend and higher tax revenues from the oil sector. At the same time, the government faces pressure to cushion consumers from higher fuel prices and to manage subsidies on cooking gas. ONGC's dividends help offset some of these costs.

The company's strong cash flows also give it the capacity to invest in exploration and production, which the government sees as essential to reducing India's dependence on imported oil and gas.

What comes next

Investors will watch ONGC's progress in arresting production declines, the results of its exploration programme and the trajectory of global oil prices. The company's investments in western offshore projects and deepwater exploration will be crucial to its long-term growth. For now, high oil prices have delivered record profits and a record dividend.