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  • 1. A CPP Report Titled „OIL & NATURAL GAS CORPORATION LIMITED.‟ For fulfilling the requirement of the award of degree of BBA Subject CPP (IMS-306) Under The Supervision of Dr Rajan Sharma Assistant Professor Submitted to: Submitted by: The Director Name: SANKET Class : BBA (3rd sem) Roll. No: 20 Registration No:12-UD-57 Institute of Management studies Kurukshetra University, Kurukshetra (September2013)
  • 2. DECLARATION I, SANKET hereby declare that I have completed the corporate profile report entitled OIL & NATURAL GAS CORPORATION LIMITED assigned to me by the Institute, to be submitted in the partial fulfillment of the Integrated MBA 5 Year Degree from Kurukshetra University. Further, I declared that this is original work done by me and the information provided in the study is authentic to the best of my knowledge and belief. Signature SANKET
  • 3. ACKNOWLEDGEMENT In this study report, I have made an honest and dedicated attempt to compile the Project Report on “Oil & Natural Gas Corporation Ltd.” I am deeply indebted to my esteemed Professor & our chairman Prof. M.K. Jain, K.U.K. to give me an opportunity for preparing project report as hereinafter. I want to pay my honor to my Professor Dr.Rajan Sharma for his insightful comments & suggestions to complete this report. I am also thankful to my father Er. Kulbir Singh as he deluged me the requisite material to prepare said report. SANKET
  • 4. Contents Chapter No. Title of the Chapter 1. 1. Energy Sector in India 1.1. Introduction 1.2. Sector 1.3. Players in the Sector 2. Oil & Natural Gas Corporation Ltd. 1.1. Introduction 1.2. Vision & Mission 1.3. History 1.4. Subsidiaries & JV’s. 1.5. Organizational Structure 1.6. Products & Services 3. Analysis & Discussion 1.7. Operational 1.8. Financial 1.9. Marketing & Others 4. SWOT Analysis & Conclusion 5. Learning from The Report References 1.10. 1.11. Articles, Papers, Journals, etc. Internet References Page No(s).
  • 5. Chapter: 1 1. A Study on Energy Sector 1.1. Energy Sector- Introduction:The Energy Sector is the totality of all of the industries involved in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution. Modern society consumes large amounts of fuel, and the energy industry is a crucial part of the infrastructure and maintenance of society all over the world. In particular, the Energy Sector comprises:the petroleum industry, including oil companies, petroleum refiners, fuel transport and end-user sales at gas stations the gas industry, including natural gas extraction, and coal gas manufacture, as well as distribution and sales the electrical power industry, including electricity generation, electric power distribution and sales the coal industry the nuclear power industry the renewable energy industry, comprising alternative energy and sustainable energy companies, including those involved in hydroelectric power, wind power, and solar power generation, and the manufacture, distribution and sale of alternative fuels traditional energy industry based on the collection and distribution of firewood, the use of which, for cooking and heating, is particularly common in poorer countries 1.1.2. History:The use of energy has been a key in the development of the human society by helping it to control and adapt to the environment. Managing the use of energy is inevitable in any functional society. In the industrialized world the development of energy resources has become essential for agriculture, transportation, waste collection, information technology, communications that have become prerequisites of a developed society. The increasing use of energy since the Industrial Revolution has also brought with it a number of serious problems, some of which, such as global warming, present potentially grave risks to the world. In society and in the context of humanities, the word energy is used as a synonym of energy resources, and most often refers to substances like fuels, petroleum products and electricity in general. These are sources of usable energy, in that they can be easily transformed to other kinds of energy sources that can serve a particular useful purpose. This difference via energy in natural sciences can lead to some confusion, because energy resources are not conserved in nature in the same way as energy is conserved in the context of physics. The actual energy content is always conserved, but when it is converted into heat for example, it usually becomes less useful to society, and thus appears to have been "used up". Ever since humanity discovered various energy resources available in nature, it has been inventing devices, known as machines that make life more comfortable by using energy resources. Thus, although the primitive
  • 6. man knew the utility of fire to cook food, the invention of devices like gas burners and microwave ovens has increased the usage of energy for this purpose alone manifold. The trend is the same in any other field of social activity, be it construction of social infrastructure, manufacturing of fabrics for covering; porting; printing; decorating, for example textiles, air conditioning; communication of information or for moving people and goods (automobiles). 1.1.3. Energy economics:Production and consumption of energy resources is very important to the global economy. All economic activity requires energy resources, whether to manufacture goods, provide transportation, run computers and other machines. Widespread demand for energy may encourage competing energy utilities and the formation of retail energy markets. Note the presence of the "Energy Marketing and Customer Service" (EMACS) sub-sector. 1.1.4. Energy Demand Management:Since the cost of energy has become a significant factor in the performance of economy of societies, management of energy resources has become very crucial. Energy management involves utilizing the available energy resources more effectively that is with minimum incremental costs. Many times it is possible to save expenditure on energy without incorporating fresh technology by simple management techniques. Most often energy management is the practice of using energy more efficiently by eliminating energy wastage or to balance justifiable energy demand with appropriate energy supply. The process couples energy awareness with energy conservation. 1.1.5 Energy Sector Classification: Government Classifications:The United Nations developed the International Standard Industrial Classification, which is a list of economic and social classifications. There is no distinct classification for an energy industry, because the classification system is based on activities, products, and expenditures according to purpose.
  • 7. Countries in North America use the North American Industry Classification System (NAICS). The NAICS sectors #21 and #22 (mining and utilities) might roughly define the energy industry in North America. This classification is used by the U.S. Securities and Exchange Commission. Financial Market Classification:The Global Industry Classification Standard used by Morgan Stanley define the energy industry as comprising companies primarily working with oil, gas, coal and consumable fuels, excluding companies working with certain industrial gases. 1.1.6 Environmental impact of the Energy Industry:Government encouragement in the form of subsidies and tax incentives for energy-conservation efforts has increasingly fostered the view of conservation as a major function of the energy industry: saving an amount of energy provides economic benefits almost identical to generating that same amount of energy. This is compounded by the fact that the economics of delivering energy tend to be priced for capacity as opposed to average usage. One of the purposes of a smart grid infrastructure is to smooth out demand so that capacity and demand curves align more closely. Some parts of the energy industry generate considerable pollution, including toxic and greenhouse gases from fuel combustion, nuclear waste from the generation of nuclear power, and oil spillages as a result of petroleum extraction. Government regulations to internalize these externalities form an increasing part of doing business, and the trading of carbon credits and pollution credits on the free market may also result in energy-saving and pollution-control measures becoming even more important to energy providers. Consumption of energy resources, (e.g. turning on a light) requires resources and has an effect on the environment. Many electric power plants burn coal, oil or natural gas in order to generate electricity for energy needs. While burning these fossil fuels produces a readily available and instantaneous supply of electricity, it also generates air pollutants including carbon dioxide (CO2), sulfur dioxide and trioxide (SOx) and nitrogen oxides (NOx). Carbon dioxide is an important greenhouse gas which is thought to be responsible for some fraction of the rapid increase in global warming seen especially in the temperature records in the 20th century, as compared with tens of thousands of years worth of temperature records which can be read from ice cores taken in Arctic regions. Burning fossil fuels for electricity generation also releases trace metals such as beryllium, cadmium, chromium, copper, manganese, mercury, nickel, and silver into the environment, which also act as pollutants. The large-scale use of renewable energy technologies would "greatly mitigate or eliminate a wide range of environmental and human health impacts of energy use". Renewable energy technologies include Bio-fuels, solar heating and cooling, hydroelectric power, solar power, and wind power. Energy conservation and the efficient use of energy would also help.
  • 8. In addition, it is argued that there is also the potential to develop a more efficient energy sector. This can be done by:_ Fuel switching in the power sector from coal to natural gas; Power plant optimization and other measures to improve the efficiency of existing CCGT power plants; Combined heat and power (CHP), from micro-scale residential to large-scale industrial; Waste heat recovery Best available technology (BAT) offers supply-side efficiency levels far higher than global averages. The relative benefits of gas compared to coal are influenced by the development of increasingly efficient energy production methods. According to an impact assessment carried out for the European Commission, the levels of energy efficiency of coal-fired plants built have now increased to 46-49% efficiency rates, as compared to coals plants built before the 1990s (32-40%).[10] However, at the same time gas is can reach 5859% efficiency levels with the best available technology.[10] Meanwhile, combined heat and power can offer efficiency rates of 80-90%.[10] 1.1.7. Politics:Since now energy plays an essential role in industrial societies, the ownership and control of energy resources plays an increasing role in politics. At the national level, governments seek to influence the sharing (distribution) of energy resources among various sections of the society through pricing mechanisms; or even who owns resources within their borders. They may also seek to influence the use of energy by individuals and business in an attempt to tackle environmental issues. The most recent international political controversy regarding energy resources is in the context of the Iraq wars. Some political analysts maintain that the hidden reason for both 1991 and 2003 wars can be traced to strategic control of international energy resources. Others counter this analysis with the numbers related to its economics. According to the latter group of analysts, U.S. has spent about $336 billion in Iraq as compared with a background current value of $25 billion per year budget for the entire U.S. oil import dependence. 1.1.8. Energy Policy:Energy policy is the manner in which a given entity (often governmental) has decided to address issues of energy development including energy production, distribution and consumption. The attributes of energy policy may include legislation, international treaties, incentives to investment, guidelines for energy conservation, taxation and other public policy techniques. 1.1.9. Energy Security:Energy security is the intersection of national security and the availability of natural resources for energy consumption. Access to cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led to significant vulnerabilities. Threats to energy security include the political instability of several
  • 9. energy producing countries, the manipulation of energy supplies, the competition over energy sources, attacks on supply infrastructure, as well as accidents, natural disasters, the funding to foreign dictators, rising terrorism, and dominant countries reliance to the foreign oil supply. The limited supplies, uneven distribution, and rising costs of fossil fuels, such as oil and gas, create a need to change to more sustainable energy sources in the foreseeable future. With as much dependence that the U.S. currently has for oil and with the peaking limits of oil production; economies and societies will begin to feel the decline in the resource that we have become dependent upon. Energy security has become one of the leading issues in the world today as oil and other resources have become as vital to the world's people. However with oil production rates decreasing and oil production peak nearing the world has come to protect what resources we have left in the world. With new advancements in renewable resources less pressure has been put on companies that produce the worlds oil, these resources are, geothermal, solar power, wind power and hydro-electric. Although these are not all the current and possible future options for the world to turn to as the oil depletes the most important issue is protecting these vital resources from future threats. These new resources will become more useful as the price of exporting and importing oil will increase due to increase of demand. 1.1.10. Energy Development:Producing energy to sustain human needs is an essential social activity, and a great deal of effort goes into the activity. While most of such effort is limited towards increasing the production of electricity and oil, newer ways of producing usable energy resources from the available energy resources are being explored. One such effort is to explore means of producing hydrogen fuel from water. Though hydrogen use is environmentally friendly, its production requires energy and existing technologies to make it, are not very efficient. Research is underway to explore enzymatic decomposition of biomass. Other forms of conventional energy resources are also being used in new ways. Coal gasification and liquefaction are recent technologies that are becoming attractive after the realization that oil reserves, at present consumption rates, may be rather short lived. See alternative fuels. 1.1.11. Energy Transportation:All societies require materials and food to be transported over distances, generally against some force of friction. Since application of force over distance requires the presence of a source of usable energy, such sources are of great worth in society. While energy resources are an essential ingredient for all modes of transportation in society, the transportation of energy resources is becoming equally important. Energy resources are frequently located far from the place where they are consumed. Therefore their transportation is always in question. Some energy resources like liquid or gaseous fuels are transported using tankers or pipelines, while electricity transportation invariably requires a network of grid cables. The transportation of energy, whether by tanker, pipeline, or transmission line, poses challenges for scientists and engineers, policy makers, and economists to make it more risk-free and efficient.
  • 10. 1.1.12. Energy Crises:- Graphical Image of Oil prices from 1861 to Present Economic and political instability can lead to an energy crisis. Notable oil crises are the 1973 oil crisis and the 1979 oil crisis. The advent of peak oil, the point in time when the maximum rate of global petroleum extraction is reached, will likely precipitate another energy crisis. 1.2. Sector:Here, in this study, we will prepare a report on Energy Sector- Explorer, Producer & Supplier of “Oil & Natural Gas,” especially engaged in our country having Global presence to meet the Energy Demand of our Nation at the very competitive prices. 1.3. Players in the Energy Sector:The following is a list of the world's largest Oil and gas companies, ordered by revenue in millions of U.S. dollars according to the Fortune Global 500. Currently all companies with revenue greater than $25 billion are included. Company Revenue Headquarters World Fuel Services 34,623 United States Valero Energy 125,095 United States Ultrapar 29,073 Brazil Total 231,580 France TNK-BP 48,909 Russia Tesoro 29,927 United States Surgutnefte gas 25,663 Russia Sunoco 45,765 United States Suncor Energy 40,231 Canada
  • 11. Statoil 119,561 Norway Sinopec 375,214 China Showa Shell Sekiyu 28,497 Japan Schlumberger 39,540 United States S-Oil 28,808 South Korea Royal Dutch Shell 484,489 Netherlands Kingdom Rosneft 65,093 Russia Repsol YPF 81,122 Spain Reliance Industries 76,119 India PTT 79,690 Thailand Plains All American Pipeline 34,275 United States PKN Orlen 36,100 Poland Petronas 97,355 Malaysia Petrobras 145,915 Brazil Company Revenue Headquarters Pertamina 70,924 Indonesia Pemex 125,344 Mexico PDVSA 124,754 Venezuela OMV Group 47,349 Austria Oil and Natural Gas Corporation 30,746 India Ltd. Murphy Oil 31,446 United States MOL Group 26,698 Hungary Marathon Petroleum 73,645 United States / United
  • 12. Lukoil 111,433 Russia Korea Gas 25,721 South Korea JX Holdings 119,258 Japan International Petroleum Investment 35,495 United Arab Emirates Company Indian Oil 86,016 India Idemitsu Kosan 48,828 Japan Hindustan Petroleum 38,885 India Hess Corporation 37,871 United States GS Caltex 43,280 South Korea GDF Suez 126,076 France Gazprom 157,830 Russia GasTerra 29,332 Netherlands Gas Natural 29,305 Spain Formosa Petrochemical Company 27,179 Taiwan Exxon Mobil 452,926 United States Enterprise Products 44,313 United States ENI 153,676 Italy Ecopetrol 35,520 Colombia
  • 13. CPC Corporation 32,769 Taiwan Cosmo Oil Company 33,672 Japan Conoco Phillips 237,272 United States China National Petroleum 352,338 China China National Offshore Oil 75,514 China China National Aviation Fuel Group 34,352 China Chevron 245,621 United States Centrica 36,860 United Kingdom BP 386,463 United Kingdom Bharat Petroleum 44,582 Corporation India SOURCE : INTERNET Here, we will prepare a project report on “Oil & Natural Gas Corporation Ltd.,” an Indian company in Energy Sector as in next chapters.
  • 14. Chapter: 2 Oil & Natural Gas Corporation Ltd. 2.1. Introduction:- 2.1.1. ONGC at Glance:- Oil and Natural Gas Corporation Type Traded as Public Sector Undertaking NSE: ONGC, BSE: 500312 BSE SENSEX Constituent Founded 14 August 1956 Headquarters Tel Bhavan, Dehradun, India Key people Revenue Operating income Sudhir Vasudeva (Chairman & MD) US$ 027.65 billion (2012) US$ 06.55 billion (2012) Profit US$ 04.22 billion (2012) Total assets US$ 43.01 billion (2012) Total equity US$ 25.74 billion (2012) Employees 32,862 (2012) 2.1.2. ONGC- In Brief:Oil and Natural Gas Corporation Limited (ONGC); (NSE: ONGC, BSE: 500312) is an Indian multinational oil and gas company headquartered in Dehradun, Uttra Khand, India. It is one of the largest Asia-based oil and gas exploration and production companies, and produces around 72% of India's crude oil (equivalent to around 30% of the country's total demand) and around 48% of its natural gas. It is one of the largest publicly traded companies by market capitalization in India. ONGC has been ranked 357th in the
  • 15. Fortune Global 500 list of the world's biggest corporations for the year 2012. It is also among the Top 250 Global Energy Company by Platt’s. ONGC was founded on 14 August 1956 by the Indian state, which currently holds a 69.23% equity stake. It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India, and owns and operates over 11,000 kilometres of pipelines in the country. Its international subsidiary ONGC Videsh currently has projects in 15 countries.ONGC has discovered 6 of the 7 commercially-producing Indian Basins, in the last 50 years, adding over 7.1 billion tonnes of In-place Oil & Gas volume of hydrocarbons in Indian basins. Against a global decline of production from matured fields, ONGC has maintained production from its Brown fields like Mumbai High, with the help of aggressive investments in various IOR (Improved Oil Recovery) and EOR (Enhanced Oil Recovery) schemes. . Recovery Factor has improved from 28 per cent [in 2000] to 33.5 per cent (in 2011). Significantly Reserve Replenishment Ratio for the last 7 years, has been more than one. 2.2. ONGC- History:- 2.2.1. Foundation to 1961:During the pre-independence period, the Assam Oil Company in the North-Eastern and Attock Oil Company in North-Western part of the undivided India were the only oil companies producing oil in the country, with minimal exploration input. The major part of Indian sedimentary basins was deemed to be unfit for development of oil and gas resources. After independence, the national Government realized the importance of oil and gas for rapid industrial development and its strategic role in defence. Consequently, while framing the Industrial Policy Statement of 1948, the development of petroleum industry in the country was considered to be of utmost necessity. Until 1955, private oil companies mainly carried out exploration of Hydrocarbon resources of India. In Assam, the Assam Oil Company was producing oil at Digboi (discovered in 1889) and Oil India Ltd. (a 50% joint venture between Government of India and Burmah Oil Company) was engaged in developing two newly discovered large fields Naharkatiya and Moraan in Assam. In West Bengal, the Indo-Stanvac Petroleum project (a joint venture between Government of India and Standard Vacuum Oil Company of USA) was engaged in exploration work. The vast sedimentary tract in other parts of India and adjoining offshore remained largely unexplored. In 1955, Government of India decided to develop the oil and natural gas resources in various regions of the country as part of the Public Sector development. With this objective, an Oil and Natural Gas Directorate was set up towards the end of 1955, as a subordinate office under the then Ministry of Natural Resources and Scientific Research. The department was constituted with a nucleus of geoscientists from the Geological survey of India. A delegation under the leadership of Mr. K D Malviya, the-then Minister of Natural Resources, visited several European countries to study the status of oil industry in those countries and to facilitate the
  • 16. training of Indian professionals for exploring potential oil and gas reserves. Experts from Romania, the Soviet Union, the United States and West Germany subsequently visited India and helped the government with their expertise. Soviet experts later drew up a detailed plan for geological and geophysical surveys and drilling operations to be carried out in the 2nd Five Year Plan (1956-57 to 1960-61). In April 1956, the Government of India adopted the Industrial Policy Resolution, which placed mineral oil industry among the schedule 'A' industries, the future development of which was to be the sole and exclusive responsibility of the state. Soon, after the formation of the Oil and Natural Gas Directorate, it became apparent that it would not be possible for the Directorate with its limited financial and administrative powers as subordinate office of the Government, to function efficiently. So in August, 1956, the Directorate was raised to the status of a commission with enhanced powers, although it continued to be under the government. In October 1959, the Commission was converted into a statutory body by an act of the Indian Parliament, which enhanced powers of the commission further. The main functions of the Oil and Natural Gas Commission subject to the provisions of the Act, were "to plan, promote, organize and implement programmes for development of Petroleum Resources and the production and sale of petroleum and petroleum products produced by it, and to perform such other functions as the Central Government may, from time to time, assign to it ". The act further outlined the activities and steps to be taken by ONGC in fulfilling its mandate. 2.2.2 ONGC 1961 to 2000:Since its inception, ONGC has been instrumental in transforming the country's limited upstream sector into a large viable playing field, with its activities spread throughout India and significantly in overseas territories. In the inland areas, ONGC not only found new resources in Assam but also established new oil province in Cambay basin (Gujarat), while adding new petro-liferous areas in the Assam-Arakan Fold Belt and East coast basins (both inland and offshore). ONGC went offshore in early 70's and discovered a giant oil field in the form of Bombay High, now known as Mumbai High. This discovery, along with subsequent discoveries of huge oil and gas fields in Western offshore changed the oil scenario of the country. Subsequently, over 5 billion tonnes of hydrocarbons, which were present in the country, were discovered. The most important contribution of ONGC, however, is its self-reliance and development of core competence in E&P activities at a globally competitive level. ONGC became a publicly held company in February 1994, with 20% of its equity were sold to the public and eighty percent retained by the Indian government. At the time, ONGC employed 48,000 people and had reserves and surpluses worth 104.34 billion, in addition to its intangible assets. The corporation's net worth of 107.77 billion was the largest of any Indian company. In 1958 the then Chairman, Keshav Dev Malaviya, held a meeting with some geologists in the Missouri office of the Geology Directorate where he accepted the need for ONGC to go outside India too in order to enhance Indian owned capacity for oil production. The argument in support for this step by L. P.
  • 17. Mathur and BS Negi, was that Indian demand for crude would go up at a faster rate than discoveries by ONGC in India. Malaviya followed this up by making ONGC apply for exploration licences in the Persian Gulf. Iran gave ONGC four blocks and Malaviya visited Milan and Bartlesville to request ENI and Phillips Petroleum to join as partners in the Iran venture. This resulted in the discovery of the Rostum oilfield in the early 'sixties, very soon after the discovery of Ankleshwar in Gujarat. This was the very first investment by the Indian public sector in foreign countries and oil from Rostum and Raksh was brought to Cochin where it was refined in a refinery built with technical assistance from Phillips. 2.2.3. ONGC 2000 to present:In 2003, ONGC Videsh acquired Talisman Energy's 25% stake in the Greater Nile Oil project. In 2006 a commemorative coin set was issued to mark the 50th anniversary of the founding of ONGC, making it only the second Indian company (State Bank of India being the first) to have such a coin issued in its honour. In 2011, ONGC applied to purchase of 2000 acres of land at Dahanu to process offshore gas. ONGC Videsh, along with Statoil ASA (Norway) and Repsol SA (Spain), has been engaged in deepwater drilling off the northern coast of Cuba in 2012. On 11 August 2012, ONGC announced that it had made a large oil discovery in the D1 oilfield off the West coast of India, which will help it to raise the output of the field from around 12,500 barrels per day (bpd) to a peak output of 60,000 bpd. In November 2012, ONGC Videsh agreed to acquire ConocoPhillips' 8.4% stake in the Kashagan oilfield in Kazakhstan for around US$5 billion, in ONGC's largest acquisition to date. The acquisition is subject to the approval of the governments of Kazakhstan and India and also to other partners in the Caspian Sea field waiving their pre-emption rights. ONGC is currently the most profitable Public Sector Firm of India. It has topped the coveted list of top ten most profit-making PSUs of India for the year of 2011-12. ONGC is currently executing various projects across India. ONGC in the year 2013 August has posted a net profit of Rs 4,015 crores for the first quarter of FY14. 2.2.4. ONGC Videsh:ONGC Videsh Limited (OVL) is the international arm of ONGC. It was rechristened on 15 June 1989. It currently has 14 projects across 16 countries. Its oil and gas production reached 8.87 MMT of O+oEG in 2010, up from 0.252 MMT of O+OEG in 2002/03. 2.2.5. ONGC Tripura Power Company:ONGC Tripura Power Company Ltd (OTPC) is a joint venture which was formed in September 2008 between ONGC, Infrastructure Leasing and Financial Services Limited and the Government of Tripura. It is developing a 726.6 MW CCGT thermal power generation project at Palatana in Tripura which will supply electricity to the power deficit areas of the North-Eastern states of the country.
  • 18. 2.2.6 ONGC Synopsis:ONGC was set up under the visionary leadership of Pandit Jawaharlal Lal Nehru. Pandit Nehru reposed faith in Sri Keshav Dev Malviya who laid the foundation of ONGC in the form of Oil and Gas division, under Geological Survey of India, in 1955. A few months later, it was converted into an Oil and Natural Gas Directorate. The Directorate was converted into Commission and christened Oil & Natural Gas Commission on 14th August 1956. In 1994, Oil and Natural Gas Commission was converted in to a Corporation, and in 1997 it was recognized as one of the Navratna’s by the Government of India. Subsequently, it has been conferred with Maharatna status in the year 2010. Over 56 years of its existence ONGC has crossed many a milestone to realize the energy dreams of India. The journey of ONGC, over these years, has been a tale of conviction, courage and commitment. ONGCs’ superlative efforts have resulted in converting earlier frontier areas into new hydrocarbon provinces. From a modest beginning, ONGC has grown to be one of the largest E&P companies in the world in terms of reserves and production. ONGC as an integrated Oil & Gas Corporate has developed in-house capability in all aspects of exploration and production business i.e., Acquisition, Processing & Interpretation (API) of Seismic data, drilling, work-over and well stimulation operations, engineering & construction, production, processing, refining, transportation, marketing, applied R&D and training, etc. Today, Oil and Natural Gas Corporation Ltd. (ONGC) is, the leader in Exploration & Production (E&P) activities in India having 72% contribution to India’s total production of crude oil and 48% of natural gas. ONGC has established more than 7 Billion Tonnes of in-place hydrocarbon reserves in the country. In fact, six out of seven producing basins in India have been discovered by ONGC. ONGC produces more than 1.27 million Barrels of Oil Equivalent (BOE) per day. It also contributes over three million tonnes per annum of Value-Added-Products including LPG, C2 - C3, Naphtha, MS, HSD, Aviation Fuel, SKO etc. 2.3. ONGC- Vision & Mission:“To be global leader in integrated energy business through sustainable growth, knowledge, excellence and exemplary governance practices.” 2.3.1. ONGC-World Class:  Dedicated to excellence by leveraging competitive advantages in R&D and technology with involved people.  Imbibe high standards of business ethics and organizational values.  Abiding commitment to safety, health and environment to enrich quality of community life.  Foster a culture of trust, openness and mutual concern to make working a stimulating and challenging experience for our people.  Strive for customer delight through quality products and services. 2.3.2. ONGC- Integrated In Energy Business:
  • 19.  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. 2.3.3. ONGC As Dominant Indian Leadership:  Retain dominant position in Indian petroleum sector and enhance India's energy availability. 2.4. ONGC Manpower Strength:2.4.1. ONGC- Our People Today, ONGC is the flagship company of India; and making this possible is a dedicated team of nearly 33,000 professionals who toil round the clock. It is this toil which amply reflects in the aspirations and performance figures of ONGC. The company has adopted progressive policies in scientific planning, acquisition, utilization, training and motivation of the team. At ONGC, everybody matters, every soul counts. ONGC has a unique distinction of being a company with in-house service capabilities in all the activity areas of exploration and production of oil & gas and related oil-field services. Needless to emphasize, this was made possible by the men & women behind the machine. Over 18,000 technically-competent experienced scientists, engineers and specialist professionals, mostly from distinguished Universities / Institutions of India and abroad form the core of our executive profile. They include geo-logists, geo-physicists, geo-chemists, drilling engineers, reservoir engineers, petroleum engineers, production engineers, engineering & technical service providers, financial and human resource experts and IT professionals. “As on 31 March 2013, the company had 32,923 employees, out of which 2,091 were women (6.35%) and 143 were employees with disabilities (0.43%).” 2.4.2. ONGC- HR Vision, Mission & Objectives HR Vision "To build and nurture a world class Human capital for leadership in energy business". HR Mission leaders through engaged empowered and enthused employees". HR Objectives  Enrich and sustain the culture of integrity, belongingness, teamwork, accountability and innovation.  Attract, nurture, engage and retain talent for competitive advantage.  Enhance employee competencies continuously.  Build a joyous work place.  Promote high performance work systems.  Upgrade and innovate HR practices, systems and procedures to global benchmarks.
  • 20.  Promote work life balance.  Measure and Audit HR performance.  Promote work life balance, integrate the employee family into the Organisational Fabric.  Inculcate a sense of Corporate Social responsibilities among employees. Measuring HR Performance HR Parameters have been incorporated in the MOU by ONGC since 1994-95, to systematically and scientifically evalua"To adopt and continuously innovate best-in-class HR practices to support business te effectiveness of HR Systems, which enables and facilitates time bound initiatives. HR Parameters of MoU for 2009-2010  Mentoring and coaching  HR Audit  Engagement Survey  Continuous professional education credit course for finance executives of ONGC. A Motivated Team HR policies at ONGC revolve around the basic tenet of creating a highly motivated, vibrant & selfdriven team. The Company cares for each & every employee and has in-built systems to recognise & reward them periodically. Motivation plays an important role in HR Development. In order to keep its employees motivated the company has incorporated schemes such as Reward and Recognition Scheme, Grievance Handling Scheme and Suggestion Scheme. Incentive Schemes to Enhance Productivity  Productivity Honorarium Scheme  Job Incentive  Quarterly Incentive  Reserve Establishment Honorarium  Roll out of Succession Planning Model for identified key positions  Group Incentives for cohesive team working, with a view to enhance productivity 2.4.3. ONGC- Training & Development An integral part of ONGC’s employee-centred policies is its thrust on their knowledge upgradation and development. ONGC Academy, previously known as Institute of Management Development (IMD), which has an ISO 9001 certification, along with 7 other training institutes, play a key role in keeping our workforce at pace with global standards. ONGC Academy is the premier nodal agency responsible for developing the human resource of ONGC. It also focuses on marketing its HRD expertise in the field of Exploration & Production of Hydrocarbons. ONGC’s Sports Promotion Board, the Apex body, has a Comprehensive Sports Policy through which top honours in sports at national and international levels have been achieved. 2.4.4. ONGC- Transforming the Organization
  • 21. ONGC has undertaken an organization transformation exercise in which HR has taken a lead role as a change agent by evolving a communication strategy to ensure involvement and participation among employees in various work centres. Exclusive workshops and interactions/brainstorming sessions are organized to facilitate involvement of employees in this project. 2.4.5. ONGC- Participative Culture Policies and policy makers at ONGC have always had the interests of the large and multi-disciplined workforce at heart and have been aware of the nuances and significance of cordial Industrial Relations. By enabling workers to participate in management, they are provided with an Informative, Consultative, Associative and Administrative forum for interactive participation and for fostering an innovative culture. In fact, ONGC has been one of the few organizations where this method has been implemented. It has had a positive impact on the overall operations since it has led to enhanced efficiency and productivity and reduced wastages and costs. 2.4.6. ONGC- A Model Corporate Citizen Respect and dignity are the key values that underline the relationship ONGC has with its human assets. Conscious about its responsibility to society ONGC has evolved guidelines for Socio-Economic Development programmes in areas around its operations all over the country.  Education  Health Care and Family Welfare  Community Development  Promotion of Sports and Culture  Calamity Relief  Development of Infrastructural Facilities  Development of the Socially & Economically Weaker Sections of Society Benefit and Welfare 2.4.7. ONGC- Sports Around 150 sportspersons including 95 international level performers are on the rolls of ONGC representing your Company in 15 different games.  ONGC hosted the ONGC Nehru Cup International Invitational Tournament during 2007-08.  Chess Queen Koneru Humpy was conferred with Padmashri and Badminton ace Chetan Anand received the Arjuna Award.  Reigning World Billiards Champion Pankaj Advani retained his title after an 'all ONGC Final' in which Dhruv Sitwala was the Runner-up  Arjuna Awardee Virender Sehwag became the first Indian and third cricketer to score two triple Test centuries.  Your Company won the Petroleum Minister's PSPB Trophy for Overall Best Performance in 2007-08 for the fifth year in succession 2.4.8. Corporate Social Responsibility
  • 22.  ONGC is spearheading the United Nations Global Compact - World's biggest corporate citizenship initiative to bring Industry, UN bodies, NGOs, Civil societies and corporate on the same platform.  During the year, your Company has undertaken various CSR projects at its work centres and corporate level. 2.4.9. Women Empowerment Women employees constitute about 5% of ONGC's workforce. Various programmes for empowerment and development, including programme on gender sensitization are organized regularly. 2.5. ONGC Group of Companies:2.5.1. ONGC Videsh Limited (OVL) : OVL is the wholly own subsidiary of ONGC which has been mandated to carry out international E&P business operations of the parent company. 2.5.2. Mangalore Refinery and Petrochemicals Limited (MRPL) : This is a 71.60% subsidiary of ONGC. It is the only other listed company besides parent ONGC within the ONGC group. 2.5.3. ONGC Nile Ganga BV (ONG BV) : This is the wholly owned subsidiary of ONGC Videsh Limited which, in turn, is 100% owned by ONGC. The company was incorporated in Netherlands and has 25% participating interest in the Greater Nile Oil Project in Sudan producing crude oil from on-shore blocks earmarked for the purpose. 2.5.4. ONGC Mittal Energy Ltd. (OMEL) : This is the joint venture between ONGC Videsh Limited and Mittal Investments SARL in the ratio of 49.98% : 48.02% with SBI Capital holding the remaining 2%. This joint venture aims to source equity oil and gas from abroad for securing India's energy independence. 2.5.5. ONGC Mittal Energy Services Limited (OMESL) : This is the joint venture between ONGC Videsh Limited and Mittal Investments SARL with the same ownership structure as that of OMEL. This joint venture will be involved in trading and shipping of oil and gas (including LNG) sourced by OMEL from abroad. 2.5.6. ONGC Tripura Power Company Pvt. Ltd. (OTPCL) : ONGC has embarked upon a project for generation of power with 750 MW gas based closed-cycle power plant. The project is being developed by a SPV between IL&FS, Government of Tripura and ONGC with an equity share of 50%, 24% and 26% respectively. The project is estimated to cost around Rs 3800 Crores and is expected to be commissioned during the first quarter of 2008. 2.5.7. Kakinada Refinery & Petrochemicals Limited (KRPL) : This is a public private joint venture company formed pursuant to an MOU between MRPL, Kakinada Seaport Limited (KSPL), IL&FS and AP Government, to set up an export-oriented refinery of 7.5 MMTPA capacity at Kakinada in coastal Andhra Pradesh which is envisaged to be integrated with bio-diesel facility.
  • 23. 2.5.8. Kakinada SEZ Limited: In tune with the recent initiatives of Ministry of Commerce and Industry, Govt. of India, for declaring Special Economic Zones (SEZs) to boos industrial growth in the country, ONGC/MRPL has become co-promoter under public-private partnership to form this joint venture company and it is envisaged that KRPL and other gas infrastructure units will be located within the Kakinada SEZ to leverage financial initiatives and to bolster economic growth 2.5.9. Mangalore SEZ Limited: With a view to providing synergy with MRPL, large petroleum and petrochemicals based projects are envisaged to be developed at Mangalore. With view to optimizing the capital cost during the construction of the project and subsequently promoting sale of petrochemical intermediates, a decision was taken to associate with a special economic zone (SEZ) Contemplated for development at Mangalore. The SEZ will be an SPV with Karnataka Industrial Areas Development Board (KIEDB), Karnataka Chambers of Commerce and Industry (KCCL) and ONGC between them bringing in 49% equity with ONGC contributing 26%. IL & FS has offered to take the remaining 51% equity. This SPV is in the process of being incorporated. 2.5.10. Dahej SEZ Limited: ONGC participating in the initiative of Govt. of Gujarat has formed a joint venture company under public private partnership to establish and develop necessary infrastructure facilities within a land of 1740 hectares in cooperation with Gujarat Industrial Development Corporation. ONGC is currently engaged in implementing its C2-C3 extraction project, which will be located within this SEZ. 2.5.11 Rajasthan Refinery Limited (RRL) : With the recent discovery of waxy oil in Mangla and other adjoining structure by Cairn Energy India, its PSC partner in Rajasthan Block, MRPL has been nominated by Govt. of India as its nominee for buying the crude oil to be produced from this block. MRPL, in coordination with Cairn Energy, and as per due facilitation by Rajasthan Govt., has proposed to form a joint venture company named Rajasthan Refinery Limited (RRL), which will examine the techno-economic viability of establishing a well-head refinery of 7.5 MMPPA Capacity and if found feasible will implement the same at a suitable location in Rajasthan. 2.6. ONGC- Organization: 2.6.1. ONGC- Board of Directors: The Company is managed by the Board of Directors, which formulates strategies, policies and reviews its performance periodically. The Chairman& Managing Director (CMD) and Six Whole-Time Directors viz. Director (Onshore), Director (Technology & Field Services), Director (Finance), Director (Offshore), Director (Exploration) and Director (Human Resource), manage the business of the Company under the overall supervision, control and guidance of the Board.
  • 24. The Board of Directors has an adequate combination of Executive (Functional) and Non-executive Directors. As on 11th December, 2012,the Board of Directors had 14 members, comprising of 6 Functional Directors (including the Chairman & Managing Director) and 8 Non-executive Directors (comprising 2 parttime official nominee Director and 6 part-time non-official Directors) nominated by the Government of India. To share the global experience and business strategies, Managing Director, ONGC Videsh Limited (OVL) is a permanent invitee to the meetings of the Board. CMD & Functional Directors:- Mr. Sudhir Vasudeva, Chairman & Managing Director K. S. Jamestin, (HR Director) A. K. Benrjee,(Director, Finance) S. Shanker, (Director, T & FS) P. K. Borthakur,(Director, Offshore) N. K. Verma, (Director, Exploration) Govt. Nominees A. Girdhar, Joint Secretary, Exploration Additional Secretary, EA (Ministry of Oil, Petroleum & Natural Gas) Permanent Invitees Shakti Kanta Dass, (Ministry of Finance)
  • 25. D. K. Sarraf, Managing Director, OVL Independent Directors K. Narsimha Murthy Dr. D. Chandrasekharn Deepak Nayyar Prof. S. K. Barua Arun Ramanathan O. P. Bhatt 2.8. ONGC- Products & Services:- ONGC supplies crude oil, natural gas, and value-added products to major Indian oil and gas refining and marketing companies. It primary products crude oil and natural gas are for Indian market. Product-wise revenue breakup for FY 2012-13 ( Cr. )
  • 26. Chapter: 3 Analysis & Discussion 3.1 OPERATIONAL ONGC Ltd. has a track record in market in the field of Exploration & Production of Oil & Natural Gas. Here, we will summarize a study on Production, Financials & Marketing Strategies of ONGC. A.2. Global Recognition:- The ONGC moved up 16 positions to be ranked 155th in the 2013 Forbes Global 2000 list of world's biggest companies and is ranked 23rd among global oil and gas companies based on sales, profits, assets and market value. It is my privilege to bring to your kind notice that in “2012 EU Industrial R&D Scoreboard'' listed ONGC at the 36th position in the list of oil and gas companies based on Research and Development (R&D) expenditure. You will be pleased to know that ONGC is the only company in this list from India. As per the Product Name Unit % of Stock % Cap. Util. Inst. Prod. Cap Prodn Oil-Crude MT 64.0 100.0 0 26,127,115 23,678,804 53,326.85 22,520.92 Natural Gas (000'M3) Naphtha NM3 19.9 MT 9.2 100.0 0.0 0 0 25,335,211 20,155,100 16,540.00 0 1,519,702 7,680.45 8,206.36 50,539.18 Liquefied Petroleum Gas Ethane/Propane Other Operating Revenue MT MT NA 3.8 1.6 0.9 100.0 100.0 0.0 0 0 0 1,006,623 1,004,721 3,148.39 427,708 425,450 1,343.96 0 0 737.53 31,335.96 31,589.14 - Superior Kerosene Oil Low Sulphur Heavy Stock MT MT 0.4 0.1 100.0 100.0 0 0 108,326 24,503 105,623 24,394 368.63 106.25 34,900.54 43,555.79 ATF High Speed Diesel Oil MT MT 0.0 0.0 100.0 100.0 0 0 11,466 36,786 5,400 2,861 31.75 17.02 58,796.30 59,489.69 Motor Spirit-Traded Mineral Turpentine Oil MT MT Rs. 0.0 0.0 0.0 100.0 0 0 0 562 55 474 4.16 3.13 756,363.64 66,033.76 0.0 0.0 0.0 0.0 0 0 0 0 0 21 0.72 0.12 57,142.86 KL MT MT Rs. Rs. 0.0 0.0 0.0 0.0 0.0 0.0 0 0 0 0 0 0 0 0 0 0.00 0.00 0.00 - 0.0 0.0 0.0 0.0 0 0 0 0 0 0 0.00 0.00 - Rs. MT 0.0 0.0 0.0 0.0 0 0 0 0 0 0 0.00 0.00 - Superior Kerosene Oil KL Superior Kerosene Oil-Traded KL 0.0 0.0 0.0 0.0 0 0 0 0 0 0 0.00 0.00 - Gasolene-Natural Motor Spirit 0.0 0.0 0.0 0.0 0 0 0 0 0 0 0.00 0.00 - Others High Diesel gas oil - Traded High Speed Diesel Oil Light Diesel Oil Heavy Cut Transportation Receipts Price Revision Arrears Adventitious Gain Naphtha-Aromatic Rich KL MT KL Sales Qty Sales (Cr.) Sales (Rs.) / Unit Platts 2012 rankings, your Company is ranked as the 31 largest listed E&P Company in the world. As a fitting acknowledgment of your Company's motto to ''Grow GREEN'' and a testament of its green credentials, ONGC has been ranked at 386 by the Newsweek Green Ranking 2012 and 15th among the
  • 27. energy companies, above global energy majors like Chevron, Luk oil, ConocoPhillips, Gazprom, Sinopec, Exxon Mobil and Petro China. Top rankers in the list are mostly the companies from retail, IT or Banking sectors which have minimal carbon footprints due to the inherent nature of their businesses. 3.2 FINANCIAL Despite volatile markets and sharing of highest-ever under-recoveries of Rs. 494,207 million during the year, your Company has earned a Profit after Tax (PAT) of Rs. 209,257 million (Rs. 251,229 million in 2011-12), down 16.70 per cent. During the year under review, your Company registered Gross revenue of Rs. 833,090 million (Rs. 768,871 million in 2011-12), up 8.35 per cent. B.1. Highlights:- Gross Revenue: Rs.833, 090 million - Profit After Tax (PAT) : Rs.209,257 million - Contribution to Exchequer: Rs.408,806 million - Return on Capital Employed: 38.27% - Debt-Equity Ratio: 0.00 - Earnings per Share (Rs.): 24.46 - Book Value per Share (Rs.): 144 (Rs. in millions) Particulars 2012-13 2011-12 Revenue from operations 833,090 768,871 Other Income 54,367 44,529 Revenues 887,457 813,400 Profit before Interest Depreciation & Tax (PBIDT) 389,455 410,327 Profit before Tax (PBT) 305,443 366,425 Profit after Tax (PAT) 209,257 251,229 Interim Dividend 76,999 66,305 Proposed Final Dividend 4,278 17,111 Tax on Dividend 13,012 13,286 Transfer to General Reserve 114,968 154,527 TOTAL 209,257 251,229 APPROPRIATION (Previous year figures have been regrouped wherever necessary.) Reduction in FY 12 -13 profit as compared to FY 11-12 is primarily due to increase in share of under recoveries (Rs. 49,550 Million), additional Cess (Rs. 42,140 Million) and exceptional income accounted for in FY 11-12 on account of Royalty adjustment for JV Block with M/s Cairn in Rajasthan, partly offset by increase in gross revenue. It would also be pertinent to mention that the stand-alone PAT of ONGC for
  • 28. 2012-13 contribute more than 86% of the Group's PAT whereas ONGC (stand alone) accounts for just 50.2% of the Group's revenues. However, if the present trend of under-recoveries and Cess burden on ONGC continues, the profitability and surplus generating capacity of the Company would be affected adversely; thereby may have impact on future growth of the group. B.2. Dividend:Your Company paid interim dividend of Rs. 9.00 per share (180 per cent) in two phases (Rs. 5.00 and Rs. 4.00). The Board of Directors have recommended a final dividend of Rs. 0.50 per share (10 per cent) making the aggregate dividend at Rs. 9.50 per share (190 per cent) as compared to Rs. 9.75 per share (195 percent) paid in 2011-12. The total dividend will absorb Rs. 81,277 million, besides Rs. 13,012 million as tax on dividend and works out to 45.06 percent of PAT against 38.49 percent in 2011-12 B.3. Management Discussion and Analysis Report As per the terms of Clause 49(l V) (F) of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report (MDAR) has been included and forms part of the Annual Report of the Company. B.4. Financial Accounting The Financial Statements have been prepared in accordance with the Generally Accepted Accounting Principles (GAAP) and in compliance with all applicable Accounting Standards (AS-1 to AS-29) and Successful Efforts Method as per the Guidance Note on Accounting for Oil & Gas Producing Activities issued by The Institute of Chartered Accountants of India (ICAI) and provisions of the Companies Act, 1956. Further, as per Ministry of Corporate Affairs (MCA) notification, the financial statements have been prepared under the Revised Schedule VI format of the Companies Act, 1956. B.5. Subsidiaries:B.5.I. ONGC Videsh Limited (OVL) ONGC Videsh Limited (OVL), the wholly-owned subsidiary of your Company for E&P activities outside India, achieved the highest-ever profit (PAT) ofRs.39, 291 Million during FY'' 13, an increase of 44.4 per cent As compared to the PAT of Rs.27, 211 Million during FY''12. OVL''s share in production of oil and oil equivalent gas (O OEG), together with its wholly-owned subsidiaries ONGC Nile Ganga B.V., ONGC Amazon Alaknanda Limited, Imperial Energy Limited and Carabobo One AB, was 7.260 MMtoe during FY''13 as compared to 8.753MMote during FY'' 12. The oil production decreased from 6.214 MMT during FY''12 to 4.341 MMT during FY''13 primarily due to the geopolitical situation in Sudan, South Sudan and Syria and the natural decline in different matured fields in Sakhalin- 1, Russia, San Cristobal Project, Venezuela and BC-10, Brazil. OVL has resumed its production from Block 5A, South Sudan on April 6, 2013 and from Blocks 1,2 & 4, South Sudan on April 13,2013. However, the operations of Al Furat Project (AFPC), Syria would resume only after improvement in geopolitical situations and softening of sanctions. OVL Furat Project
  • 29. presently has participation in 32 assets in 16 countries out of which 11 are producing assets, 5 discovered/under-development assets, 14 exploratory assets and 2 pipelines. Significant highlights of OVL during FY' 13 are:i. Acquisition of Hess Corporation's 2.7213% participating interest in the Azeri, Chirag and the Deep Water Portion of Guneshli Fields in the Azerbaijan sector of the Caspian Sea (ACG) and 2.36% interest in the Baku-Tbilisi-Ceyhan (BTC) Pipeline was completed on March 28,2013. The acquisition would bring about 9.00% additional proved reserves to the portfolio of OVL and daily oil production of about 19,000 barrels (aboutO.9 MMT per annum. ii. OVL has won two exploration blocks in Colombia under Colombian Bid Round 2012 (i) Offshore block Guaoff-2 in Guajira Basin with 100% Participative Interest (PI) and (ii) Onshore Llanos-69 (LLA-69) block in prolific llanos basin of Colombia was won by Mansarovar Energy Colombia Limited (MECL); a 50:50 joint venture between OVL and Sinopec of China. iii. OVL discovered Oil in the first well of the onshore exploration block CPO-5 in Colombia in which it is the Operator with 70 per cent participating interest. The first of the two commitment wells i.e. Kamal-1 was speeded on October 29,2012 and drilled up to the target depth of 10,500 feet with oil discovery. The second well is currently under testing with encouraging results. iv. The development of Lan-Do field in Block 06.1, Vietnam, where OVL has 45 per cent PI, has been completed and the field was put to production on October 7,2012. The completion of Lan-Do field enhanced the production capacity of the Block 06.1 by 0.20 BCM. v. OVL has relinquished/ surrendered its interest from three non-operated exploration blocks namely N-25 to 29 & N-36 in Cuba; BM-S-74and BM-BAR-1, both in Brazil due to unsuccessful exploratory wells. vi. Project Carabobo-1 in Venezuela is under development and had started early production in January 2013. vii. OVL made an inaugural US$ bond offering in international capital market with a duel tranche US$ 800 million Notes in April, 2013 to part finance the ACG and BTC acquisition. The offering was well received with the order book closing at about US$ 3 billion. The 5 year tranche of US$ 300 million was priced at a spread of 190 basis point above the 5 year US treasury at yield of 2.574 per cent per annum and the 10 year tranche of US$ 500 million was priced at a spread of 210 basis point above the 10 year US treasury at yield of 3.756 per cent per annum. This inaugural bond offering, guaranteed by the parent company ONGC, represents the largest REG-S only issuance by an Indian issuer in the US$ bond markets at the lowest coupon rates and has set a benchmark in pricing by Indian issuer. B.5.1.1. Direct Subsidiaries and Joint Ventures of OVL i. ONGC Nile Ganga B.V. (ONGBV) ONGBV, a subsidiary of OVL, is engaged in E&P activities in Sudan, South Sudan, Syria, Venezuela, Brazil and Myanmar. ONGBV holds 25 percent Participating Interest (PI) in Greater Nile Oil Project (GNOP), Sudan with its share of oil production of about 0.596 MMT during 2012-13. ONGBV holds 25 per cent Participating Interest (PI) in Greater Pioneer Operating Company (GPOC), South Sudan
  • 30. but due to adverse geo-political conditions, OVL could not produce any oil in GPOC, South Sudan during FY'13. ONGBV holds 16.66 per cent to 18.75 per cent PI in four Production Sharing Contracts in Al Furat Project (AFPC), Syria with its share of oil and gas production of about 0.126 MMtoe during FY'' 13. ONGBV holds 40 percent PI in San Cristobal Project in Venezuela through its wholly owned subsidiary ONGC Nile Ganga (San Cristobal) BV with its share of oil production of about 0.800 MMT during FY’13. ONGBV holds 15 percent PI in BC-10 Project in Brazil through its wholly owned subsidiary ONGC Campos Ltd a with its share of oil and gas production of about 0.303 MMtoe during FY'' 13. ONGBV held 43.5 per cent PI in exploratory block BM-S-74 and 25 per cent PI in exploratory block BM-BAR-1 and holds Block BM-SEAL-4 all located in deep-water offshore, Brazil through its Wholly owned subsidiary ONGC Campos Ltda. ONGBV also holds 8.347 percent PI in South East Asia Gas Pipeline Co. Ltd., (SEAGP) Myanmar for Pipeline project, through its wholly owned subsidiary ONGC Caspian E&P B.V. ii. ONGC Narmada Limited (ONL) ONL has been retained for acquisition of future E&P projects in Nigeria. iii. ONGC Amazon Alaknanda Limited (OAAL) OAAL, a wholly-owned subsidiary of OVL, holds stake in E&P projects in Colombia, through Mansarovar Energy Colombia Limited (MECL), a 50:50 joint venture company with Sinopec of China. During FY'' 13, OVL''s share of oil production in MECL wasabout0.552MMT. iv. Imperial Energy Limited (Erstwhile Jarpeno Limited) Imperial Energy Limited (Name changed from Jarpeno Limited with effect from April 19, 2013), a wholly-owned subsidiary of OVL incorporated in Cyprus, holds Operatorship with 100 per cent PI in Imperial Energy Having its main activities in the Tomsk region of Western Siberia, Russia. During FY'' 13, Imperial Energy''soil production was about0.560 MMT. v. Carabobo One AB Carabobo One AB, a wholly-owned subsidiary of OVL incorporated in Sweden, holds 11 per cent PI in Carabobo-1 Project, Venezuela. The early production has already started from first well (CG0005) on 27th December 2012 @ 300 bopd. vi. ONGC (BTC) Limited ONGC (BTC) Limited holding 2.36 per cent interest in the Baku-Tbilisi-Ceyhan Pipeline (BTC) with effect from 28th March, 2013 owns and operates 1,768 km oil pipeline running through Azerbaijan, Georgia and Turkey. The pipeline mainly carries crude from the ACG fields from Azerbaijan to Mediterranean Sea. vii. ONGC Mittal Energy Limited (OMEL)
  • 31. OVL along with Mittal Investments Sari (MIS) promoted OMEL, a joint venture company incorporated in Cyprus. OVL and MIS together hold 98% equity shares of OMEL in the ratio of 49.98 per cent (OVL) and 48.02 per cent (MIS) with the balance 2 per cent shares held by SBI Capital Markets Ltd. OMEL held 45.5 per cent PI in exploration Block OPL 279, Nigeria and holds 64.33 per cent PI in exploration Block OPL 285, Nigeria. OMEL also holds 1.11 per cent of the issued share capital of ONGBV by way of Class-C shares issued by ONGBV exclusively For AFPC Syrian Assets; such investment being financed by Class-C Preference Shares issued by OMEL in the ratio of 51:49 to OVL and MIS respectively. B.5.2. Mangalore Refinery and Petrochemicals Limited (MRPL) ONGC continues to hold 71.62 per cent equity stake in MRPL, a Schedule A Mini Ratna, which is a single location 15 MMTPA Refinery on the west coast. B.5.2.1 Performance Highlights FY2012-13:MRPL achieved the highest-ever-thru put of 14.40 MMT and it produced 13.4 MMT of petroleum products, the highest-ever. - MRPL exported 6.82 MMT of products against5.59 MMT in the previous year. - Crude sourcing: 14.2 MMT; Iran (28.8 per cent), Saudi Arabia (19.4 per cent), ADNOC (15.9 per cent), Kuwait (8.9 per cent), Mumbai High (12.3 percent), Azeri (4.2 percent) & Spot (10.6 percent). -MRPL achieved all its MOU targets. - MRPL incurred a net loss of Rs. 7,569.10 million during FY''13 mainly on account of reduced gross margins and foreign exchange fluctuation loss of Rs. 5,364.9 million. Accordingly, no dividend has been declared for the FY''13. 3.3 Marketing & Others:In view of the continued under recoveries in retail marketing of Auto fuels, the Company operated in a limited way, thereby keeping the under recoveries to the minimum. The Company is in all readiness to take up retail marketing within a short time, if the under recoveries are eliminated. C.1. Retail Operations :Govt, has announced complete decontrol of HSD prices for bulk consumers and MRPL has already made inroads in the bulk HSD market. In line with the Govt, policy towards eventual decontrol of HSD in retail segment, MRPL has taken cautious steps to set up few retail outlets in select markets and the advertisement for the same has been released. MS prices remain decontrolled and market determined and sales from existing retail outlets continue to grow. C.2. Phase III - Brownfield expansion Project & SPM
  • 32. Under Phase-Ill expansion of MRPL, Hydrogen generation unit and Diesel Hydro-Treating Unit have been commissioned along with Amine Treating Unit and Stripped sour water units. At the same time, SBM/SPM trial run was also undertaken. Commissioning of SRU-3 will be done after the replacement of the gaskets. The Phase-Ill project is expected to be complete by this year end. C.3. Exemption in respect of Annual Report of Subsidiaries and Consolidated Financial Statement Ministry of Corporate Affairs (MCA) vide circular dated February 8, 2011 and clarification dated February 21, 2011 decided to grant a general exemption from the applicability of Section 212 of the Companies Act, 1956 from attaching the Balance Sheet and Profit & Loss Account prepared regarding the financial year ending on or after March 31, 2011, in relation to subsidiaries of those companies which fulfil various conditions including inter-alia approval of the Board of Directors for not attaching the balance sheet and profit & loss account of the subsidiary concerned. ONGC Board has accorded necessary approval in this regard for not attaching the Balance Sheet and Profit & Loss Account of its subsidiaries (i) ONGC Videsh Limited (OVL) and (ii) Mangalore Refinery and Petrochemicals Ltd. (MRPL). All the conditions mentioned in the circular are being complied with by ONGC. Full Annual Report of ONGC including its subsidiaries will be made available to any shareholder, if he/she desires. Further, Annual Reports of MRPL and OVL are also available on website respectively. In accordance with the Accounting Standard (AS)21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interests in Joint Ventures, audited Consolidated Financial Statements for the year ended March 31, 2013 of the Company and its subsidiaries form part of the Annual Report. C.4. Joint Ventures/ Associates i. ONGC Petro-additions Limited (OPAL) ONGC has promoted OPAL, a Joint Venture (JV) Company, with envisaged equity stake of 26% along with GAIL (15.5%) and GSPC (5%); the balance equity is to be tied up from Strategic Partners / FIs / IPO. It is a mega downstream petrochemical integrated project at Dahej SEZ put in place for utilizing the inhouse production of C2-C3 and Naphtha from various units of ONGC. It is scheduled to be completed by 01 2014. Present status Overall Cumulative progress is 77.65 per cent as on March 31, 2013. Total cumulative expenditure as on March 31, 2013 is Rs. 137,081 million. Approved project cost is Rs. 213,960 million. Debt closure has been attained with the execution of Rupee Term Loan agreement, forRs. 149,770 million on 29.01.2013. ii. ONGC Mangalore Petrochemicals Limited (OMPL)
  • 33. OMPL isa value-chain integration project for manufacturing Para-Xylene and Benzene from the Aromatic streams of MRPL promoted by ONGC with an envisaged equity participation of 46% along with MRPL (3%) with balance equity being tied up. Present status of OMPL:Overall cumulative progress is 91.83 percent as on March 31, 2013. Total cumulative expenditure on the project is Rs. 40,170 million. Approved project cost is Rs. 57,500 million. The scheduled completion of the project is slated for Q3 of FY 2013-14. iii. Dahej SEZ Ltd (DSL) It is envisioned as a multi-product SEZ at Dahej in coastal Gujarat for setting up world-class mega infrastructure facilities which would anchor ONGC''s upcoming C2-C3 Extraction Plant and a value-chain Integration project (OPAL). Paid up capital: ONGC: 49.99% &GIDC: 49.99% Envisaged equity structure: ONGC: 23%; GIDC: 26%; balance equity is Being tied up. Present status of DSL:SEZ is already operational and units in SEZ have clocked export of Rs. 8,640 million in the FY'12 and Rs. 14,200 million in FY'13. 92 percent of the leasable land has already been allotted and the remaining land is expected to be leased in the next two years. iv. ONGC Tripura Power Company Ltd (OTPC) OTPC is setting up a 726.6 MW (2 X 363.3 MW) gas based Combined Cycle Power Plant at Palatana, Tripura. The basic objective of the project has been to monetize idle gas assets of ONGC in landlocked Tripura State and to give further boost to exploratory efforts in the region. Your Company has promoted OTPC with an envisaged stake of 50% along with Govt, of Tripura (0.5%) and IL&FS Energy Development Co. Ltd. (IEDCL- an IL&FS subsidiary) (24.5%); the balance is proposed to be tied up through IPO. Present status of OTPC:The total expenditure incurred on the project till March 31, 2013 is Rs. 28,353 million against approved project cost of Rs. 34,180 million. Entire debt for the project has been tied up with Power Finance Corporation at a Debt: Equity ratio of 3:1. Physical Progress: In Unit-I, unforeseen technical problems had arisen since first full-load trial operations in early Jan 2013. The same have been attended and the Unit-I has been restarted to commence trial operations to achieve commercial operations by July 2013. Unit-ll commissioning is now scheduled in August 2013. The Palatana-Bongai Gaon transmission line being implemented by NETC is now commissioned up to Byrnihat. This would facilitate full evacuation of power generated from Unit-I. For complete evacuation of Unit-ll power, the Byrnihat-Bongai Gaon section of the line needs to be completed by December 2013 subject to resolution of certain issues related to forest clearance in Assam state.
  • 34. v. Mangalore Special Economic Zone Limited (MSEZ) With an envisaged equity stake of 26% along with KIADB (23%), IL&FS (50%), OMPL (0.96%) and KCCI (0.04%), ONGC has proposed to set up MSEZ to serve as site for development of necessary infrastructure to facilitate and locate ONGC/ MRPL''s Aromatic complex being promoted by ONGC. Present status of MSEZ:In respect of Pipeline Corridor development, Ministry of Environment & Forest (MOEF) clearance is awaited for construction works at Reach 2 (about 1.8 km). Pursuant to the presentation made by MSEZ to Expert Committee of MOEF on Feb 18-19, 2013, the committee has favourably recommended the case to MOEF. As far as land acquisition issues at Reach 3 (about 1.5 km) are concerned, Gazette notification has already been issued by the Government of Karnataka; however, land price fixation is yet to be done by the Government. Required work for river water infrastructure has been completed. Trial runs to MRPL and OMPL have also been conducted successfully. Facilities are ready for supply of water. Water supply agreement is under finalization. vi. ONGC TERI Biotech Limited (OTBL) OTBL is a Joint Venture company of ONGC which was incorporated on March 26, 2007, in association with ''The Energy Research Institute'' (TERI) with shareholding of 49 per cent each. Balance 2 per cent equity is held by the Financial Institutions. The JV has been promoted for addressing the requirement of Bioremediation of oily sludge, Microbial Enhanced Oil Recovery, prevention of wax deposition in tubular’s and solution for other oil field problems. The turnover of OTBL in FY'13 is Rs. 136.61 million and Profit after Tax is Rs. 40.05 million as against turnover of Rs. 129.96 million and Profit after Tax is Rs. 32.78 million in FY'12. vii. Petronet MHB Limited (PMHBL) PMHBL is a JV company where in ONGC (28.766%), HPCL (28.7%) and PIL (7.898%) have equity stakes. Balance 34.57 per cent of equity is held by leading banks. It owns and operates a multiproduct pipeline to transport MRPL''s products to hinterland of Karnataka. Throughput in FY''13 is 2.816 MMT against 2.771 MMT during the last year. As per audited results for the year 2012-13, the turnover and PAT of PMH BL are Rs. 834.53 million and Rs. 273.09 million, respectively. viii. Petronet LNG Limited (PLL) ONGC has 12.5 per cent equity stake in PLL, identical to stakes held by other Oil PSU co-promoters viz., IOCL, GAIL and BPCL. Dahej LNG terminal of PLL having a capacity of 10 MMTPA is currently meeting around 20 per cent of the total gas demand of the country. A new LNG terminal of 5 MMTPA capacity is under construction at Kochi and is expected to be completed by the 2nd quarter of FY''13. The turnover of PLL during 2012-13 is Rs.314,674 million (previous year Rs. 226,959 million) and net profit is Rs. 11,493million (previous year Rs. 10,575million).
  • 35. ix. Pawan Hans Limited (PHL) ONGC has 49 per cent equity stake in PHL (previously known as Pawan Hans Helicopters Limited). Balance 51 per cent equity is held by the Government of India. PHL is one of Asia's largest helicopter operators having a well-balanced operational fleet of 40 helicopters. It provides helicopter support for i ONGC''s offshore operations. PHL was successful in providing all the 12 Dauphin N and N3 helicopters fully compliant with AS-4 as per the new contract with ONGC. The accounts of PHL for 2012-13 are under finalisation. C.5. Other Projects/ Business initiatives:a. C2-C3-C4 Extraction Plant ONGC has set up a C2-C3-C4 extraction plant at Dahej with LNG from Petronet LNG Limited (PLL) as the feed stock. This plant will be supplying C2-C3-C4 extracts as feedstock to OPAL. Presently, the plant systems are under preservation and periodic inspection of static and rotary equipment is continuing as per Preservation Plan. b. Urea Fertilizer Business ONGC signed a Memorandum of Understanding (MoU) with M/s Chambal Fertilizers and Chemicals Ltd. (CFCL) and the Government of Tripura for setting up a 1.3 MMTPA capacity urea fertilizer plant in Tripura. MoU Was signed on April 9, 2013 at Agartalain presence of Shri Manik Sarkar, Hon'ble Chief Minister of Tripura. Feedstock for the proposed plant (Natural gas) will be supplied from Khubal field in AA-ONN2001/1 block where substantial gas reserves have been established. Gas requirement for the plant is estimated to be 2.4 mmscmd. The project cost is estimated to beRs. 50,000 million. Government of Tripura will have 10 per cent equity in the venture. c. LNG terminal ONGC along with its consortium partners BPCL and Japanese conglomerate Mitsui signed an MoU with the New Mangalore Port Trust (NMPT) on March 18, 2013. The MoU documents the Port's NoObjection to carry out the Feasibility studies and intention to extend all cooperation to the consortium in this regard. The MoU was executed in presence of Hon'ble Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily and the erstwhile Chief Minister of Karnataka Shri Jagadish Shettar. The consortium expects to commission the facility by 2018. C.6. Alliances & Partnerships for Business Growth:a) MoU with Eco-petrol: - ONGC signed a MoU with Eco-petrol, Ecuador for collaboration on jointly studying the fan belt traps of the Cachar Region in India and cooperating on studying and developing EOR and IOR technologies during 7th National Oil Companies (NOC) Forum held during May 25-27, 2012 at Istanbul. b) Collaboration Agreements with GAIL ONGC signed the following four agreements with GAIL on July 21, 2012:
  • 36. 1. Gas Cooperation Agreement, 2. Gas Swap Agreement for C2-C3 Plant, 3. OPAL Shareholders' Agreement, 4. Side Letter for polymer marketing rights for GAIL. While the Gas Cooperation agreement bestows rights on GAIL to market gas produced from ONGC fields on a case-by-case basis, the gas swap agreement is of importance for C2 extraction plant at Dahej as it facilitates swapping of domestic non-APM gas for shrinkage due to extraction of C2 components from PLL's LNG. The Shareholders' Agreement spells out the ownership pattern in the OPAL project wherein ONGC and GAIL are inter-alia sponsors and the Side Letter bestows marketing rights on GAIL, which is running/expanding petrochemical plant at Pata and is in the process of setting up another one in Assam, for partial quantity of polymers produced by OPAL facility. c.) Farm-out agreement with M/s INPEX for block KG-DWN-2004/6 ONGC entered into a strategic partnership with M/s lNPEX CORPORATION (INPEX), Japan's largest national oil company. ONGC signed a Farm-Out Agreement (FOA) on November 5,2012, at New Delhi for handing over 26 per cent participating interest to M/s INPEX in the deep water exploration Block KG-DWN-2004/6 of Krishna-Godavari Basin, which was awarded to ONGC-led consortium under the NELP-VI licensing round. ONGC Chapter-4: ONGC-SWOT Analysis & Conclusion Category Sector Tagline/ Slogan USP STP Segment Target Group Positioning SWOT Strength Oil & Gas Energy Making tomorrow brighter; Nibhaye zimmedari bharose se India's biggest oil and gas exploration organisation Corporate’s, countries, individuals looking to fulfil energy needs Enterprises looking for energy for production, people for petrol diesel for vehicles and domestic uses The future of India's energy 1.Indias largest 2.Strong 3.High crude oil and brand profit natural gas producer name making
  • 37. 4.Has over 40,000 employees 5.It produces about 30% of India's crude oil requirement 6.Contributes 77% of India's crude oil production and 81% of India's natural gas production 7.Commemorative Coin set was released to mark 50 Years of ONGC 1.Legal issues 2.Employee management 3.Bureaucracy 4.Human rights and rehabilitation issues 1.Increasing fuel/oil prices 2.Increasing natural gas market 3.More oil well discoveries 4.Expand export market 1.Government regulations 2.High Competition 3.Hybrid and electric cars in the market Competition 1.Bharat Petroleum 2.Hindustan Petroleum 3.Reliance Industries 4.IOCL Weakness Opportunity Threats Competitors 41. SWOT Analysis of ONGC: Oil and Natural Gas Corporation is India’s largest exploration and production company. It produces around 77% of country’s total crude production and around 81% of natural gas production. It cumulatively produced 803 mn MT of crude and 485 bn cubic meters of natural gas from 111 fields. ONGC currently possesses 56 deepwater blocks which were allocated to it under the New Exploration Licensing Policy (NELP) regimes between 1997 and October 2010. Over the years, the company has discovered 6 of the 7 producing basins in India and added 6.4 billion tonnes of Oil and Gas reserves. It has a market capitalization of INR 235,000Crores and ranks 3rd in Oil & Gas Exploration & Production Industry globally. It holds largest share of hydrocarbon field in the country. IS Advisors takes you through the Company information and a detailed SWOT Analysis of the company in this report. The report provides useful and comprehensive information about the company. This coupled with SWOT Analysis can be utilized for investment related decision. Strengths Weaknesses Opportunities Threats marketplace 2. Expertise at Shortage of consultants at Well established position Large consultancies operating level rather than with a well defined market operating at a minor level partner level 1. Reputation in niche Unable to deal with multi- Identified market for Other small consultancies
  • 38. partner level in disciplinary assignments consultancy in areas other looking to invade the HRM consultancy because of size or lack of than HRM marketplace ability 4.2 ONGC-SWOT Analysis Report 4.3 ONGC- Conclusion:- a) Global Ranking  Only Indian energy major in Fortune's Most Admired List 2012 under 'Mining, Crude Oil Production' category.  It is ranked 171th in Forbes Global 2000 list of the World's biggest companies for 2012 based on Sales (US$ 26.3 billion), Profits (US$ 5 billion), Assets (US$ 51 billion) and Market Capitalization (US$ 46.6 billion).  ONGC has been ranked 39th among the world's 105 largest listed companies in 'transparency in corporate reporting' by Transparency International making it the most transparent company in India. b) ONGC is India's Most Valuable Public Sector Enterprise  The Company won Petro-fed Oil & Gas Industry Awards 2011 in three categories – “Environmental Sustainability: Company of the Year", "Human Resource Management: Company of the Year" and "Innovator of the Year: Team (Won by IOGPT)".  It was bestowed with "Most Attractive Employer" Award in Randstad Awards 2011  Won "Golden Peacock Award for Sustainability" for the year 2011  Awarded with the Gold Trophy of SCOPE Meritorious Award for "Environmental Excellence & Sustainable Development" for the Year 2010-11 by former President Smt. Pratibha Devisingh Patil  Anointed "Outstanding PSU of the Year" at AIMA Managing India Awards 2012  Awarded the Best overall Performance PCRA Award in the Upstream Sector (Oil & Gas) for 3rd consecutive year  Awarded the "ICSI National Award for Excellence in Corporate Governance for 2011"- Certificate of Recognition  Awarded NIPM National Award for Best HR Practices – 2011  Adjudged amongst 20 Top Companies for Leaders 2011 in Aon Hewitt Awards  "Best Enterprise Award" for the organization in the Maharatna and Navaratna Category at the 22nd National Meet of Women in Public Sector (WIPS)  It was bestowed with Safety Innovation Award 2011 in the Oil & Gas sector for innovative safety measures
  • 39.  OVL Honoured with SCOPE Excellence Award for Excellence and Outstanding Contribution to the Public Sector Management c) ONGC Represents India's Energy Security Through its Pioneering Efforts ONGC is the only fully–integrated petroleum company in India, operating along the entire hydrocarbon value chain. It has single-handedly scripted India's hydrocarbon saga. Some key pointers:  ONGC has discovered 6 out of the 7 producing basins in India:  It has 7.59 billion tonnes of In-place hydrocarbon reserves. It has to its credit more than 320 discoveries of oil and gas with Ultimate Reserves of 2.69 Billion Metric tonnes (BMT) of Oil Plus Oil Equivalent Gas (O+OEG) from domestic acreages.  It has cumulatively produced 851 Million Metric Tonnes (MMT) of crude and 532 Billion Cubic Meters (BCM) of Natural Gas, from 111 fields.  ONGC has won 121 out of a total 235 Blocks (more than 50%) in the 8 rounds of bidding, under the New Exploration Licensing Policy (NELP) of the Indian Government.  ONGC's wholly-owned subsidiary ONGC Videsh Ltd. (OVL) is the biggest Indian multinational, with 30 Oil & Gas projects (9 of them producing) in 15 countries.  Produces over 1.24 million barrels of oil equivalent per day, contributing over 64% of India's domestic production. Of this, over 75% of crude oil produced is Light & Sweet.  The Company holds the largest share of hydrocarbon acreages in India (51% in PEL Areas & 67% in ML Areas).  ONGC possesses about one tenth of the total Indian refining capacity.  ONGC has a well-integrated Hydrocarbon Value Chain structure with interests in LNG and product transportation business as well.  A unique organization in world to have all operative offshore and onshore installations (403) accredited with globally recognized certifications. d) Competitive Strength  All crudes are sweet and most (76%) are light, with sulphur percentage ranging from 0.02-0.10, API gravity range 26°-46° and hence attract a premium in the market.  Strong intellectual property base, information, knowledge, skills and experience  Maximum number of Exploration Licenses, including competitive NELP rounds. ONGC has bagged 121 of the 235 Blocks (more than 50%) awarded in the 8 rounds of NELP.  ONGC owns and operates more than 26,600 kilometers of pipelines in India, including sub-sea pipelines. No other company in India operates even 50 per cent of this route length. e) Perspective Plan 2030 (PP2030) PP2030 charts the roadmap for ONGC's growth over the next two decades. It aims to double ONGC's production over the plan period with 4-5 per cent growth against the present growth rate of 2 percent. In physical terms the aspirations under Perspective Plan 2030 aims for -
  • 40.  Production of 130 mmtoe of oil and oil equivalent gas (O + OEG) per year and accretion of over 1,300 mmtoe of proven reserves.  Grow ONGC Videsh Limited (OVL) six fold to 60 mmtoe of international O+OEG production per year by 2030.  More than 20 mmtoe of O+OEG production per year in India coming from new unconventional sources such as shale gas, CBM, deepwater and HPHT (High Pressure & High Temperature) reservoirs.  Over 6.5 GW power generation from nuclear, solar and wind and 9 MTPA of LNG.  Scaling up refining capacity to over 20 MMTPA and targeted investments to capture downstream integration in petrochemicals. f) Sourcing Equity Oil Abroad ONGC Videsh Limited (OVL) is operating in 15 countries with 30 projects with cumulative investment worth over USD 15 billion, to source equity oil & gas for energy security of the country. Over the years OVL has emerged as the biggest Indian Multinational.  The company now has participation in 30 E&P projects in 15 countries namely Vietnam (1 project), Russia (2 projects), Sudan (2 projects), South Sudan(2 projects), Iraq (1 project), Libya (1 project), Myanmar (2 projects), Syria (2 projects), Cuba (2 projects), Brazil (4 projects), Nigeria (1 project), Colombia (6 projects), Venezuela (2 projects) and Kazakhstan (1 project). Out of 30 projects, ONGC Videsh is Operator in 9 projects and Joint Operator in 7 projects.  OVL continued to maintain its robust growth with production of 6.214 MMT of Crude Oil and 2.539 BCM of Gas during 2011-12. Its proved reserves (1P) as on 1st April 2012 stood at 193.381 MTOE, which next to ONGC, is the second largest holding of proved oil and gas reserves by any Indian Company. OVL's share of total reserves (3P) of oil and oil equivalent gas as on 1st April 2012 was 425.941 MTOE. As on 31st March, 2012, the Reserves-to-Production (R/P) Ratio considering proved reserves was 22.09.  Consolidated gross revenue of OVL increased from Rs.186.711 billion in 2010-11 to Rs.226.314 billion in 2011-12, up 21.2% and consolidated net profit from Rs.26.91 billion in 2010-11 to Rs.27.21 billion in 2011-12.  OVL was accorded with Mini-Ratna Category-I status by Government of India during July 2011. Recently during September 2012, OVL has been upgraded from a Schedule "B" public enterprise to Schedule "A".  OVL signed agreements with KazMunaiGas (KMG), the national oil company of Kazakhstan for acquisition of 25% participative interest in Satpayev exploration block in Kazakhstan. The agreement was signed on 16th April 2011 with KazMunaiGas in the presence of Dr. Manmohan Singh, Hon'ble Prime Minister of India and H.E. Nursultan Nazarbayev, President of Kazakhstan.  OVL along with Petronas and Nilepet has signed a Transition Agreement on 13th January 2012 with the Government of RSS for the continuation of its right for petroleum exploration and exploitation in Block 5A. The partners of Block 5A have incorporated a new operating company SUDD Petroleum Operating Co. Ltd. (SPOC) registered in Mauritius on 7th March 2012. The block will now be jointly operated by all partners.
  • 41.  OVL signed definitive agreements during September 2012 for the acquisition of Hess Corporation's 2.7213% participating interest in the Azeri, Chirag and the Deep Water Portion of Guneshli Fields in the Azerbaijan sector of the Caspian Sea ('ACG') and 2.36% interest in the Baku-Tbilisi-Ceyhan Pipeline ('BTC'), for US$ 1 Billion. ACG, which is located in the south Caspian Sea about 95 km off the coast of Azerbaijan, is the largest oil and gas field complex in Azerbaijan and is one of the largest producing oil fields in the world with average daily production from the field around 700,000 bopd of crude oil.  OVL's strategic objective of sourcing 20 million tonnes of equity oil abroad per year is likely to be fulfilled by 2018. As per 'Perspective Plan 2030', OVL is eyeing a six fold increase in production by 2030; from about 9 MTOE in current fiscal to 60 MTOE per annum by the year 2030. g) Frontiers of Technology  State-of-the-art seismic data acquisition, processing and interpretation facilities  Uses one of the Top Ten Virtual Reality Interpretation facilities in the world  Alliances with Transocean, Schlumberger, Halliburton, Baker Hughes, IPR, Petrobras, Norsk, ENI and Shell  One of the biggest ERP implementations in the Asia h) Best In Class Infrastructure And Facilities  The Company operates with 27 Seismic crews, manages 240 onshore production installations, 202 offshore installations, 77 drilling (plus 44 hired) and 58 work-over rigs (plus 30 hired), owns and operates more than 26,598 kilometers of pipeline in India, including 4,500 kilometers of sub-sea pipelines.  ONGC has adopted Best-in-class business practices for modernization, expansion and integration of all Infocom systems. i) Financials (2011-12) ONGC group's turnover during 2011-12 has been Rs. 150,185 Crore with net profit of Rs. 28,144 Crore. ONGC paid the highest-ever dividend of Rs. 8,342 Crore. The Net Worth of ONGC Group of companies is Rs. 135,266 Crore.  During 2011-12, the turnover of ONGC (on standalone basis) has been Rs. 76,887 Crore with net profit of Rs.25,123 Crore; the highest-ever despite sharing under-recovery of Rs.44,466 Crore to the Oil Marketing Companies (OMCs) as per the instructions of the Government of India. Net worth of ONGC (on standalone basis) has been Rs.1,11,784 Crore.  OVL's consolidated gross revenue increased by 21% from Rs. 18,671 Crore during 2010-11 to Rs.22,637 Crore during 2011-12 and consolidated net profit increased by 1% from Rs. 2,621 Crore during 2010-11 to Rs. 2,721 Crore during 2011-12.  The turnover of MRPL has been Rs.52,207 Crore, up 19% from Rs.43,800 Crore and net profit has been Rs.909 Crore during 2011-12. Value-chain integration  ONGC's purchase of majority stake in equity in the ailing Mangalore Refinery & Petrochemicals Limited (MRPL), a stand-alone refinery of 9.69 MMT capacity in March 2003 is a standout testimony of ONGC'
  • 42. Chapter: 5 Learning from Report This project report on Oil & Natural Gas Corporation Limited gave me immense knowledge about the Auto sector. I got to learn many things like what is automobile industry is all about.. Major players in the sector. and various other things. When I start preparing report I did not know much about the Auto sector. From this report I got to learn various important aspects about Automobile sector. I come to know the growth of Auto sector. I m really thankful Dr. Rajan Sharma my project guide, who has been a source of perpetual inspiration to me, gently guiding and paving my way towards a bright carrier, throughout my project work. He has ever willing to give all kind of support and encouragement to me.
  • 43. References a) Articles, Papers, Journals: Articles published in News Papers- Times of India  ONGC- Company Profile  Yearly Financial Reports on ONGC. (Audited & Un-Audited)  CAG Reports on ONGC b) Internet/ Websites: Website of ONGC- poil  Google Search-