Oil India

Oil India's Q1 FY26 standalone performance saw a significant decline, with PAT falling to INR813 crores from INR1,467 crores YoY. This was primarily driven by a 22% decrease in crude oil realization to $66.2 per barrel and provisions totaling INR514 crores for Bangladesh and Gabon blocks. Consequently, the standalone EBITDA margin compressed from 43% to 34%. However, consolidated PAT remained robust at INR2,047 crores, bolstered by strong contributions from NRL (INR488 crores PAT) and Russian investments (INR780 crores profit share).

Despite challenges, Oil India maintained consistent growth in oil and gas production. Crude oil production increased by 1.07% QoQ to 0.85 million metric tons, while natural gas production rose by 2.61% QoQ to 0.83 BCM. The company announced a new hydrocarbon discovery in the Namrup-Borhat OALP block in Upper Assam and commenced natural gas production from the Bakhritibba Discovered Small Field in Rajasthan, reflecting ongoing well intervention and field development efforts.

NRL demonstrated strong operational performance, achieving 106% capacity utilization with a crude throughput of 799 TMT, up from 764 TMT in the previous year. The refinery expansion project is 80% physically complete, and the crude oil pipeline (CNPCL) is 84% complete, with commissioning expected to begin in a phased manner from December 2025. The expanded capacity is projected to reach ~40% utilization by H2 FY27 and ~80% by FY28. NRL's GRM for Q1 FY26 was $5.02 per barrel, impacted by $2.93 per barrel due to inventory losses.

Oil India has ambitious capex plans, targeting INR6,995 crores for standalone operations in FY26, with INR3,350 crores already spent in Q1. This includes INR2,300 crores for E&D activities, INR300 crores for overseas investments, and INR550 crores for NRL. NRL itself plans a capex of INR9,133 crores for FY26 and INR7,300 crores for FY27, primarily for its refinery expansion and petrochemical unit. The combined capex for OIL and NRL is projected to be over INR16,000 crores for FY26 and nearly INR14,900 crores for FY27.

The company is committed to achieving net-zero emissions by 2040, backed by an earmarked investment of INR25,000 crores. Key initiatives include setting up approximately 25 Compressed Biogas (CBG) plants across various states and developing 1.9 GW of solar energy capacity in Assam and Rajasthan, targeted for completion by March 2026. Additionally, a bioethanol plant in the Northeast is scheduled for commissioning on September 8th, 2025.

Gas production faced challenges due to non-upliftment from customers undergoing shutdowns, though these issues are now resolving. The company is enhancing DNPL's capacity from 1 MMSCMD to 2.5 MMSCMD to supply Numaligarh. For broader connectivity, the IGGL network's first phase is commissioned, but the feeder line to Duliajan is targeted for March 2027, pending Ministry approval. Management indicated that new well gas must prioritize City Gas Distribution (CGD) networks, and selling surplus gas outside the Northeast would fetch IGX-based prices, not nomination prices.

Oil India's Russian investments, Taas-Yuryakh and Vankorneft, have shown strong returns, with 95% of the combined investment already recovered through dividends. In Q1 FY26, OIL received USD 11 million from Taas-Yuryakh and USD 11.2 million from Vankorneft. Management expects continuous dividend flow, with Taas-Yuryakh still producing at peak levels and Vankorneft's decline being addressed by infrastructure upgrades. The Russian investments contributed INR780 crores to the group's PAT in Q1 FY26.