SHRI RAMSWAROOP MEMORIAL
ENGINEERING & MANAGEMENT
A Project Report
Under the Guidance of Submitted by
Mr. TRIPUTI MISHRA ATUL KUMAR TIWARI
OVERVIEW OF THE OIL INDUSTRY
In current scenario there is one section in economy which is really hot and
boiling and it is oil sector. With crude oil at $146 per barrel and raring to cross
$200 per barrel this sector is suddenly giving sleepless nights to all the major
economies of the world. It is also responsible for increase in inflation
throughout the world. The major oil consumer are US and China with India at
sixth position the irony is that none of these countries is major producer of oil
so they have t rely on other countries like OPEC, Russia for their needs. OPEC
(organization of petroleum exporting countries) has 11 member countries and
they together account for 40% of total oil production in the world and they have
the market share of around 78% in potential crude reserves. As OPEC is the
largest exporter of oil so it directly impacts the price of crude oil in the market.
The whole oil sector is divided in to two categories
Upstream – It involves exploration and production of crude oil. With limited
crude reserves on the earth this field has suddenly become the cynosure for all
Downstream – It involves the refining and transportation of oil. The major
companies in this field are Shell, BP, and IOCL etc
It is an upstream company as it deals with exploration and production of oil. Oil
and Natural Gas Corporation Limited (ONGC) (incorporated on June 1993) is
an Indian public sector petroleum company. It is a Fortune Global 500 company
ranked 335th, and contributes 77% of India's crude oil production and 81% of
India's natural gas production. It is the highest profit making corporation in
India. It was set up as a commission on August 14, 1956 Indian government
holds 74.14% equity stake in this company.
ONGC is engaged in exploration and production activities. It is involved in
exploring for and exploiting hydrocarbons in 26 sedimentary basins of India. It
produces about 30% of India's crude oil requirement. It owns and operates more
than 11,000 kilometres of pipelines in India.
It has one subsidiary ONGC Videsh Limited for exploration and production of
oil outside India. It has its major exploration site at Bombay high near Mumbai.
Headquarters- Dehradun, India
Key Person- Mr. R.S. Sharma
Revenue- US$ 24.04 billion (2008)
Net Income- US$ 04.934 billion (2008)
Total Assets- US$ 35.35 billion (2008)
Employees- 34,000 (2008)
ONGC has been ranked at 198 by the Forbes Magazine in their Forbes
Global 2000 list for the year 2007.
ONGC has featured in the 2008 list of Fortune Global 500 companies at
position 335, a climb of 34 positions from rank of 369 in 2007.
ONGC is ranked as Asia’s best Oil & Gas company, as per a recent survey
conducted by US-based magazine ‘Global Finance’
2nd biggest E&P company (and 1st in terms of profits), as per the Platts
Energy Business Technology (EBT) Survey 2004
Ranks 24th among Global Energy Companies by Market Capitalization in
PFC Energy 50 (December 2004).
Economic Times 500, Business Today 500, Business Baron 500 and
Business Week recognize ONGC as most valuable Indian corporate, by
Market Capitalization, Net Worth and Net Profits.
To be a world-class Oil and Gas Company integrated in energy business with
dominant Indian leadership and global presence.
• Focus on domestic and international oil and gas exploration and
production business opportunities.
• Provide value linkages in other sectors of energy business.
• Create growth opportunities and maximize shareholder value.
• Retain dominant position in Indian petroleum sector and enhance India's
While ONGC is an oil producing company so the only product it sells is oil. The oil
produced by upstream companies is not sufficient enough so we have to import oil
from other countries and we are the 6th largest producer of oil.
While ONGC is among the highest profit making companies in the country and
has made it to the Forbes top 100 list. Recently it has posted the profit of Rs
Leadership Style – The Company is a Navratna PSU's. Since government is the
major equity holder in the company so it controls all the decision of the board of
directors of the company as it controls the BOD's. The head of the company is
appointed by the government and even the pricing of its product is controlled by
Stakes & Subsidiaries
• Mangalore Refinery & Petrochemicals Ltd. (MRPL) (71% equity stake)
• ONGC Videsh Ltd.
• Indian Oil Corporation.(9.6% equity stake)
• Mansarovar Energy Columbia Ltd.
• A 50:50 JV between OVL & SINOPEC of China.
• Western Offshore Basin, Mumbai
• Western Onshore Basin, Baroda
• KG Basin, Rajamundry
• Cauvery Basin , Chennai
• Assam & Assam-Arakan Basin , Jorhat
• CBM- BPM Basin , Kolkata
• Frontier Basin , Dehradun
REGIONS & PLANTS
Uran Plant, Uran
Hazira Plant, Hazira
Mumbai Region, Mumbai
Western Region, Baroda
Eastern Region, Nazira
Southern Region, Chennai
Central Region, Kolkata
1. Drilling Services, Mumbai
2. Well Services, Mumbai
3. Geo- Physical Services, Dehradun
4. Logging Services, Baroda
5. Engineering Services, Mumbai
6. Offshore Logistics, Mumbai
7. Technical Services, Dehradun
8. Info-com Services, New Delhi
9. Corporate Planning, New Delhi
10. Human Resource Development, Dehradun
11. Employee Relations, Dehradun
12. Security, Dehradun
13. Company Secretary, New Delhi
14. Marketing, New Delhi
15. Corporate Affairs &Co-ordination, New Delhi
16. Corporate Communication, New Delhi
17. Health, Safety & Environment, Mumbai
18. Material Management, Dehradun
19. Legal, New Delhi
20. Medical, Dehradun
21. Internal Audit, New Delhi
22. Commercial, New Delhi
23. Exploration & Development, Dehradun
One of the biggest advantages & strength of the company is that it is state
owned. This led the company have great infrastructure with the
governments support. The policy making also becomes easier due to the
same reason. Moreover any undue and sustained pressure creates due
impact on the government as well.
2. Growing demographics
ONGC went to global fields through its subsidiary, ONGC Videsh Ltd.
(OVL). ONGC has made major investments in Vietnam, Sakhalin and
Sudan and earned its first hydrocarbon revenue from its investment in
3. Top Technology
ONGC is the technological advancements that were implemented over
the last few years. The advancements were substantial and improved the
company's ability to extract the greatest amount of oil and gas.
4. Hard Industry for Competitor to Enter
The oil sector is an industry wherein not many competitors can enter
owing to the scale and government intervention.
5. Strives to be environmentally friendly
The Company has in its guiding principles to cut down emission and
become nature friendly in due course of time
6. Strong Infrastructure
The company implemented some well needed improvements to the
infrastructure and created a strength for the company.
Ever changing laws
The ever changing laws pose a big threat to the company. The Company
is bleeding due to the rising crude oil prices in the international market
but the government has its own priorities.
O.N.G.C is facing difficulties to produce oil from aging reservoirs.
Security of personnel & property especially crude oil continues to be a
cause of concern in certain area.
In some exploration Campaign Company involves high technology, high
technology, High investment and high risks.
1. Possible Mergers with Smaller Companies
ONGC has always great opportunities to get into mergers & acquisitions
with companies across the globe
2. Finding Alternative Fuels before competitor
It may itself get into the research operations in terms of finding
alternative fuels before its competitors
3. Expanding into more areas
The company has great opportunities to expand in offshore locations
4. Grow their hold in the energy market
The company can become more aggressive in locating new oil-fields
across the globe.
1. Threat of Alternative Fuels
The company may be facing some real threat from alternative fuels in the
next decade or so
2. Corrupt Government may not have the company's best interest in mind
3. Could fall behind technology with the everything changing so quickly
this day and age .
1). OUTSOURCING contracts
Since ONGC is continuously loosing employees it painstakingly trains a good
short term strategy would be to start outsourcing to Private firms .There are
actually lot of private firms competing for outsourcing contracts of PSUs. Also
because of its image as a "SLOW working PSUs" people problem can be
avoided by outsourcing.
2) Attracting top notch talent with good payment package and giving
challenging tasks to them. Also they can be employed on contract basis for
limited time period
3) With economic environment depleting, ONGC can start purchasing future
contracts on energy. This will thus hedge their risk if energy prices increase
further. Also market seems will deplete further due to environment boiling over
attack on IRAN by US and Israel.
After studying the detail of O.N.G.C LTD I reached at conclusion that O.N.G.C
has achieved its entire desire goal with its hard work and unique idea. O.N.G.C
is having a good manpower and provides good facilities to their employees. The
majority of the company's profitability ratios show an increasing trend. The
performance of the company can be considered as satisfactory. As per my
opinion that O.N.G.C LTD has a wide scope to develop in coming years.