Q & A Highlights
Q: What is the current crude oil production run rate, and can the company maintain the record daily production levels achieved in Q1 FY27?A: Trailukya Borgohain, Director of Operations, stated that the company is on a path to achieve close to 1 MMT of crude oil production each quarter, up from 0.95 MMT in Q1. He noted that daily production has already increased to 11,017 tonnes on August 3, 2026, from the record 10,921 tonnes on June 27, 2026. This growth is driven by improvements in well interventions, workovers, and integrated planning. The company is targeting a production level of around 4.2 MMT for FY29 from its main producing areas.
Q: Can you provide an update on the progress of gas monetization pipelines and when gas production can ramp up to the 5 BCM target?A: Management explained that gas evacuation is currently constrained by downstream shutdowns and seasonal variations. The key to unlocking production is the completion of the DPL (Duliajan-Numaligarh) pipeline and the IGGL (Indradhanush Gas Grid). A critical 200-meter connectivity line within the NRL campus is expected to be completed in 2-3 months, allowing gas to flow into the national grid. The IGGL is expected to be ready by the end of the next financial year (FY28). Once these are operational, the company expects to reach 5 BCM of gas production, with a target of 3.8 BCM for the next fiscal year (FY28).
Q: What is the company’s exploration and drilling plan for FY27 and FY28, and how will the government’s new support schemes impact the capital outlay?A: The company plans to drill 100 wells in FY27 (42 exploratory and 57 development) and aims to increase this by 10% annually. The new government schemes, such as ‘Samudra Manthan’, will provide significant financial support for deepwater and ultra-deepwater exploration, including a reimbursement ceiling of INR675 crores per well for drilling and INR10,000 crores for common infrastructure. This support will help fund the company’s deepwater campaign in the Mahanadi and KG basins, where the first rig is expected to arrive in June-July 2027 and the second by March 2028.
Q: What is the normalized GRM for NRL, given the exceptionally high reported GRM of $35.95 per barrel?A: Bhaskar Phukan, MD of NRL, clarified that the reported GRM includes an inventory gain of around INR2 crores. Excluding this, the normalized GRM would be approximately $33 per barrel. He attributed the high GRM to strong diesel and petrol cracks, which were partially offset by discounts given to OMCs to keep retail prices stable. These discounts, which were as high as INR13 per litre for petrol and INR10 per litre for diesel at the start of the quarter, were calibrated down to INR3 and zero, respectively, by the end of the quarter.
Q: What is the latest update on the NRL refinery expansion project and its commissioning timeline?A: Bhaskar Phukan stated that the SRU (Sulphur Recovery Unit) is mechanically complete and undergoing statutory inspections. The DCC (Delayed Coker Unit) is expected to be commissioned by October or November 2026. The remaining units are targeted for commissioning by March 31, 2027. Production will ramp up gradually, reaching around 75% of the 9 MMT capacity by the end of the second year of operations. The total project cost is estimated at INR34,000-35,000 crores, with an additional INR7,200-7,300 crores for the PPU (Paraffinic Petrochemical Unit) project.
Q: What are the next steps for the gas discoveries in the Andaman (Vijaya Puram) block, and when can we expect results?A: The company is preparing to test the first well (Vijaya Puram 1) using hydrofracking, which is expected to take about a month. A fourth exploratory well will be drilled in December 2026 using a jackup rig. New 3D seismic data (600 sq km) is being processed and will be interpreted by January 2027. Based on these results, appraisal wells will be planned for Vijaya Puram 2 and 3 to delineate the reservoir and estimate gas-in-place. A final assessment of the field’s potential is expected by March 2027.
Q: What is the company’s total debt position at the group level?A: The management provided a breakdown of the group’s total debt, which stands at approximately INR37,233 crores. This includes a $1.4 million loan for the Mozambique project, a $550 million bond at the Singapore subsidiary (due for repayment in May 2027), and around INR19,000 crores of debt at NRL for its expansion project.
Q: What is the status of the GST on royalty and the Assam land tax cases, and what is the financial impact?A: Abhijit Majumder, Director of Finance, confirmed that the company has been providing for GST on royalty since 2017, so the payment of the principal amount of approximately INR2,500 crores will not impact the P&L. The court has given six weeks to settle the payment. Regarding the Assam land tax, the government has given an undertaking to withdraw the law. The company has only recorded this as a contingent liability, so there is no impact on its financials.
Q: Why has gas production decreased by 8% year-on-year, and what is the outlook for gas offtake?A: The decrease is due to lower offtake from customers like BCPL and power plants. Power plants are preferring cheaper hydro power, and BCPL has been facing financial challenges. However, BCPL’s consumption has stabilized. The management emphasized that the long-term solution is the new pipeline infrastructure (DPL and IGGL), which will allow gas to be evacuated to the national grid, reducing reliance on the limited number of customers in the Northeast.
Q: What is the company’s operating cost per barrel, and how is it expected to evolve?A: The current operating cost is around $4.5 to $5 per barrel. Management expects this to decrease
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
