Oil and Natural gas Corporation had an under recovery of Rs 2,600 crore (Rs 26 billion) due to subsidies on cooking gas and kerosene during 2003-04 and it lost another Rs 1,300 crore (Rs 13 billion) due to appreciation of the rupee. 
 
A senior ONGC executive said that the company's gross realisation during the last financial year was estimated at $28 a barrel while net realisation was estimated $25 a barrel due to the subsidy burden that it had to carry. 
 
He added that there has been a slight improvement in per barrel realisation during the current financial year. 
 
Last year, ONGC and GAIL India were asked to share the subsidy burden on liquefied petroleum gas and kerosene sold through the public distribution system. 
 
The under recoveries on the sale of two cooking fuels was estimated at over Rs 8,000 crore (Rs 80 billion) during 2003-04 as the subsidy per cylinder of cooking gas alone was estimated at over Rs 100. 
 
The company is, however, going ahead with its investment plans and is planning to maintain its capital expenditure at Rs 10,000 crore (Rs 100 billion) during 2004-05. ONGC is spending heavily on exploration and is targeting discovery of around 6 billion tonnes of oil. Currently, ONGC is engaged in projects worth Rs 15,000 crore (Rs 150 billion). 
 
"Our revenues are going up because of higher crude oil prices this year. But our costs have also gone up," the executive said. ONGC project costs have gone up because of a sharp increase in steel prices, he added. 
 
Meanwhile, ONGC subsidiary Mangalore Refinery and Petrochemicals Ltd is expected to export around 2 million tonnes of oil products in 2004-05, as against 4 million tonnes last year. 
 
"From this year, MRPL's pro-rated capacity has been put at 9.69 million tonnes and thus increased product offtake by the oil marketing companies," Subir Raha, chairman, ONGC, told reporters on the sidelines of a seminar organised by Assocham. 
 
He said MRPL's capacity was been increased to 12 million tonnes through de-bottlenecking and it is likely to process a little over 10.5 million tonnes of crude oil in 2004-05. 
 
A detail feasibility report for raising the capacity of the 9.69 million tonnes refinery to 15 million tonnes in two stages at an estimated cost of Rs 2,000 crore (Rs 20 billion) has been commissioned. The expansion is likely to be completed by 2007.