Mumbai: Indian energy firms Reliance Industries and Oil and Natural Gas Corp are set to post robust quarterly profits on the back of rising oil prices, which are also seen keeping their medium-term outlooks rosy.

A 14 per cent rise in crude oil prices during October-December should expand margins for Reliance, helping India's largest listed company likely post a record quarterly profit and state-run ONGC its biggest quarterly percentage profit jump in nearly six years.

"The outlooks for both firms look positive as we do not expect crude prices to cool off substantially from current levels anytime soon," said K.K. Mital, CEO of portfolio management services with Globe Capital.

"Realisations for both firms are going to remain good."

Gas output, overseas foray

Reliance, controlled by Mukesh Ambani who is the world's fourth-richest man with a fortune of $29 billion according to Forbes magazine, is set to report a fifth straight quarterly rise in profit.

Gross refining margins at its flagship refining business should be higher at around $9 per barrel for the December quarter, up from $5.9 per barrel a year ago, analysts said.

But the petrochemicals-to-retail conglomerate's near-term prospects would depend on its ability to boost gas production - which has dipped in recent months, and investment plans for its various businesses, they said.

Reliance is pumping about 52-53 million cubic metres of gas a day from its KG D6 block off India's east coast, lower than the 60 million cubic metres seen last year, but the country's upstream regulator said earlier this month output could rise by April 2011.

Production is expected to peak at 80 million cubic metres a day by 2012/13, after a delay of almost two years.

The company has outlined plans to spend $4 billion to $4.5 billion by 2014 on three shale gas joint ventures with US firms.

Ambani has made no secret of Reliance's overseas ambitions, and is looking to widen its businesses beyond petrochemicals, refining, oil and natural gas exploration, and retail.

The company made a dramatic return to the telecom business last year with a $1 billion acquisition of Infotel Broadband, the only company to hold nationwide licence for broadband wireless spectrum.

ONGC

ONGC is expected to report a 75 per cent jump in quarterly net profit, helped by an increase in local gas prices in June.

Gains could, however, be offset by higher subsidy burden in the form of discounts the company is required to give to state-run refiners.

India granted autonomy to state-run refiners in June to fix retail prices for petrol, but the government continues to control prices of diesel, cooking gas and kerosene.

State-run energy producers are expected to have given total discounts of 51.98 billion rupees ($1.14 billion) to retailers on fuel sales in the December quarter, an industry source told Reuters on Tuesday.

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Of this, ONGC's subsidy burden is expected to be 42.22 billion rupees, compared to 34.97 billion rupees in the same period a year earlier.

The government allowed ONGC to charge higher prices for the gas produced since June and the company expects to add around 15 billion rupees to quarterly revenue on this account.