UPDATE 1-India ONGC net falls in Q1 for fourth successive qtr

(Adds company quotes, financial and production details)

NEW DELHI, July 23 (Reuters) - Indian state-run explorer Oil & Natural Gas Corp (ONGC.BO) posted a fourth straight decline in quarterly profit on Thursday, and said it would invest to boost output from its ageing fields.

The firm is required to partially subsidise the sale of fuel to state-run retailers, who sell fuel at government-set, below-market prices, which affects it profit.

The sharp fall in oil prices from record highs in mid-2008 has cut ONGC's subsidy cost, which was 4.29 billion rupees ($88.5 million) during the quarter, down nearly 96 percent from year earlier.

"Current quarter results will depend on oil prices and subsidy. Both of which are not in our hands," finance director D.K. Sarraf told reporters.

Chairman and Managing Director R. S. Sharma said crude oil prices would definitely move up.

Hedeclined to comment on whether ONGC was interested in Kosmos Energy's stake in an oil field in Ghana or if it had hired Citigroup as an adviser.

"We keep on hiring merchant bankers for various evaluations, but would not like to disclose which banker is working on what," Sharma said.

Earlier this week, sources familiar with the deal told Reuters ONGC had hired Citigroup (C.N) to advise it on a bid for Kosmos Energy's stake in the oil field in a deal that could be worth between $3 billion and $5 billion. [ID:nHKG40219]

ONGC Videsh, the offshore arm of ONGC, has interests in the Asia Pacific region, the Middle East, Africa and Latin America.

PROFIT FALLS

ONGC, India's second-most valuable listed company with a market worth of $48.5 billion, said net profit fell 27 percent to 48.48 billion rupees ($1 billion).

That was still better than the average forecast in a Reuters poll for a profit of 46.62 billion rupees. [ID:nBOM527986]

The company's crude oil production in the quarter fell 4.5 percent to 6.12 million metric tonnes, and Sharma said ONGC was spending 600 billion rupees to ramp up production from ageing fields.

He said ONGC would announce the commissioning of three new offshore production sites next month.

Separately, unit Mangalore Refinery and Petrochemicals (MRPL.BO) said ONGC had approved its plan to set up a 440,000 tonnes-per-annum polypropylene plant to be integrated with its phase-3 refinery plant, which would cost 18 billion rupees.

Ahead of the results, shares in ONGC closed flat at 1,092.85 rupees in a Mumbai market .BSESN that rose 2.6 percent. ($1=48.45 rupees) (Reporting by Devidutta Tripathy; Writing by Ami Shah; Editing by John Mair)