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CASE STUDY ON THE
INTERNATIONAL BUSINESS
EXPANSION STRATEGY OF
ONGC
PRESENTED TO: DR. SAKSHI SHARMA
PRESENTED BY : ADITYA NARAYAN 242
INTRODUCTION OF ONGC
ONGC - OIL AND NATURAL GAS CORPORATION LIMITED
• IT WAS ESTABLISHED IN THE YEAR 1956.
• ITS HEAD QUARTER IS IN DEHRADUN.
• THE CHAIRMAN AND MD OF ONGC IS MR. RADHEY S. SHARMA.
• ITS REVENUE WAS $24.032 BILLION IN THE YEAR 2008.
• CURRENTLY THERE ARE 34000 EMPLOYEES.
• ONGC IS BUSINESS ORGANIZATION INVOLVED IN THE EXPLORATION AND
PRODUCTION OF HYDROCARBONS IN INDIA AND ABROAD.
• ONGC IS THE LEADER IN THE UPSTREAM PETROLEUM SECTOR AND A LEADING
NAVRATNA PUBLIC SECTOR.
• ONGC SET UP OVL IN 1996 AS A WHOLLY OWNED SUBSIDIARY.
CONT...
• IT IS THE LARGEST OIL EXPLORATION AND PRODUCTION (E&P) COMPANY IN
INDIA.
• IT HAS MARKET SHARE OVER 84% IN CRUDE OIL AND GAS PRODUCTION.
• AROUND 57 % PETROLEUM EXPLORATION LICENSES IN INDIA FOR OVER 588
THOUSANDS OF AREA BELONGS TO ONGC.
• IT MAJOR PRODUCTS INCLUDES PETROLEUM, CRUDE NATURAL GAS, LIQUEFIED
PETROLEUM GAS (LPG), KEROSENE AND PETROCHEMICAL PRODUCTS.
REASON FOR EXPANSION ONGC BUSINESS
• LICENSING POLICY
• DEMAND OF CRUDE OIL
• OIL PRICES
• COMPETITION
• BURDEN
• DEPENDENCY
➤ LICENSING POLICY:- BY THIS PRIVATE SECTOR CAN ALSO PARTICIPATE IN THE
EXPLORATION AND PRODUCTION.
➤ DEMAND OF CRUDE OIL:- DEMAND WAS INCREASING DAY BY DAY.
➤ OIL PRICES:- THE TREND OF INTERNATIONAL PRICES WAS VOLATILE AND
RISING.
➤ COMPETITION:-DOMESTIC COMPETITION WAS INCREASING.
➤ BURDEN:- INCREASING BURDEN ON THE COUNTRY DUE TO THE RISING OIL
IMPORT BILL.
➤ DEPENDENCY:- THE BOTTOM-LINE WAS CRUDE OIL PRICES.
MAJOR STRATEGIC DECISIONS TAKEN...•
• ONGC CHANGED FROM A COMMISSION TO A COMPANY.
• ONGC APPOINTED MC KINSEY AS A CONSULTANT FOR COMPLETE REVAMPING
AND RESTRUCTURING OF THE ORGANIZATION.
• ONGC EXPANDED ITS GLOBAL OPERATION THROUGH ITS SUBSIDIARY OVL.
• ONGC BOUGHT 71% STAKE IN THE MRPL REFINERY.
• ONGC DECIDED TO ACQUIRE EQUITY OIL ABROAD THROUGH THE ENDEAVORS
OF THE OVL.
• HUMAN RESOURCE DEVELOPMENT.
OBJECTIVES OF ONGC...
• DOUBLING RESERVES TO 6 BILLION TONES BY 2020.
• IMPROVING AVERAGE RECOVERY FROM 28% TO 40%.
• TYING 20 MMT PER ANNUM OF EQUITY OF HYDROCARBON FROM ABROAD.
INTERNATIONALIZATION STRATEGY OF
ONGC….
CARRIED OUT IN HOUSE STUDIES OF VARIOUS MODERATE AND SEMI-MAOR,
MAJOR OFFSHORE AND ONSHORE FIELDS.
• CAME UP WITH ABOUT 400 OIL AND GAS BLOCKS.
EVALUATED THESE FIELDS WITH AVAILABLE DATA
• CAME UP WITH THE PRIORITY LIST FOR FOREIGN FORAY.
COMBINATION OF MARKETING ENTRY
STRATEGY OF:-
• JOINT VENTURE WITH EQUITY PARTICIPATION IN PRODUCING OIL/GAS FIELDS.
•JOINT VENTURE WITH EQUITY PARTICIPATION FOR EXPLORATION AND
DEVELOPMENT BLOCKS.
• CONSORTIUM APPROACH, POOLING OTHER INDIAN OIL COMPANIES, SUCH AS
IOC LTD, GAIL, ETC.
• OPERATOR SHIP CONTRACTS (MANAGEMENT CONTRACTS).
• TURKEY ENGINEERING CONTRACTS.
COUNTRIES WHERE ONGC HAS ITS
PRODUCING ASSETS.
PRODUCING ASSETS OF OVL :-
A. HAVING 20 PERCENT HOLDING IN SAKHALIN(RUSSIA)
B. HAVING 45 PERCENT STAKE IN PARTNERSHIP WITH BRITISH PETROLEUM.
C. HAVING 25 PERCENT EQUITY IN THE GREATER NILE OIL PROJECT IN SUDAN.
COUNTRIES WHERE ONGC HAVING
DISCOVERIES AND EXPLORATION
 OVL ASSETS WITH DISCOVERIES & EXPLORATION :-
a. HAVING 100 PERCENT INTEREST IN APPRAISAL & DEVELOPMENT IN QATAR.
b. HAVING 70 PERCENT INTEREST IN EXPLORATION & APPRAISALIN EGYPT.
c. 15 PERCENT INTEREST IN DEVELOPMENT PHASE IN BRAZIL.
d. 20 PERCENT PARTICIPATION INTEREST IN MYANMAR.
Presentation on Case Study of ONGC.pptx

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Presentation on Case Study of ONGC.pptx

  • 1. CASE STUDY ON THE INTERNATIONAL BUSINESS EXPANSION STRATEGY OF ONGC PRESENTED TO: DR. SAKSHI SHARMA PRESENTED BY : ADITYA NARAYAN 242
  • 2. INTRODUCTION OF ONGC ONGC - OIL AND NATURAL GAS CORPORATION LIMITED • IT WAS ESTABLISHED IN THE YEAR 1956. • ITS HEAD QUARTER IS IN DEHRADUN. • THE CHAIRMAN AND MD OF ONGC IS MR. RADHEY S. SHARMA. • ITS REVENUE WAS $24.032 BILLION IN THE YEAR 2008. • CURRENTLY THERE ARE 34000 EMPLOYEES. • ONGC IS BUSINESS ORGANIZATION INVOLVED IN THE EXPLORATION AND PRODUCTION OF HYDROCARBONS IN INDIA AND ABROAD. • ONGC IS THE LEADER IN THE UPSTREAM PETROLEUM SECTOR AND A LEADING NAVRATNA PUBLIC SECTOR. • ONGC SET UP OVL IN 1996 AS A WHOLLY OWNED SUBSIDIARY.
  • 3. CONT... • IT IS THE LARGEST OIL EXPLORATION AND PRODUCTION (E&P) COMPANY IN INDIA. • IT HAS MARKET SHARE OVER 84% IN CRUDE OIL AND GAS PRODUCTION. • AROUND 57 % PETROLEUM EXPLORATION LICENSES IN INDIA FOR OVER 588 THOUSANDS OF AREA BELONGS TO ONGC. • IT MAJOR PRODUCTS INCLUDES PETROLEUM, CRUDE NATURAL GAS, LIQUEFIED PETROLEUM GAS (LPG), KEROSENE AND PETROCHEMICAL PRODUCTS.
  • 4. REASON FOR EXPANSION ONGC BUSINESS • LICENSING POLICY • DEMAND OF CRUDE OIL • OIL PRICES • COMPETITION • BURDEN • DEPENDENCY
  • 5. ➤ LICENSING POLICY:- BY THIS PRIVATE SECTOR CAN ALSO PARTICIPATE IN THE EXPLORATION AND PRODUCTION. ➤ DEMAND OF CRUDE OIL:- DEMAND WAS INCREASING DAY BY DAY. ➤ OIL PRICES:- THE TREND OF INTERNATIONAL PRICES WAS VOLATILE AND RISING. ➤ COMPETITION:-DOMESTIC COMPETITION WAS INCREASING. ➤ BURDEN:- INCREASING BURDEN ON THE COUNTRY DUE TO THE RISING OIL IMPORT BILL. ➤ DEPENDENCY:- THE BOTTOM-LINE WAS CRUDE OIL PRICES.
  • 6. MAJOR STRATEGIC DECISIONS TAKEN...• • ONGC CHANGED FROM A COMMISSION TO A COMPANY. • ONGC APPOINTED MC KINSEY AS A CONSULTANT FOR COMPLETE REVAMPING AND RESTRUCTURING OF THE ORGANIZATION. • ONGC EXPANDED ITS GLOBAL OPERATION THROUGH ITS SUBSIDIARY OVL. • ONGC BOUGHT 71% STAKE IN THE MRPL REFINERY. • ONGC DECIDED TO ACQUIRE EQUITY OIL ABROAD THROUGH THE ENDEAVORS OF THE OVL. • HUMAN RESOURCE DEVELOPMENT.
  • 7. OBJECTIVES OF ONGC... • DOUBLING RESERVES TO 6 BILLION TONES BY 2020. • IMPROVING AVERAGE RECOVERY FROM 28% TO 40%. • TYING 20 MMT PER ANNUM OF EQUITY OF HYDROCARBON FROM ABROAD.
  • 8. INTERNATIONALIZATION STRATEGY OF ONGC…. CARRIED OUT IN HOUSE STUDIES OF VARIOUS MODERATE AND SEMI-MAOR, MAJOR OFFSHORE AND ONSHORE FIELDS. • CAME UP WITH ABOUT 400 OIL AND GAS BLOCKS. EVALUATED THESE FIELDS WITH AVAILABLE DATA • CAME UP WITH THE PRIORITY LIST FOR FOREIGN FORAY.
  • 9. COMBINATION OF MARKETING ENTRY STRATEGY OF:- • JOINT VENTURE WITH EQUITY PARTICIPATION IN PRODUCING OIL/GAS FIELDS. •JOINT VENTURE WITH EQUITY PARTICIPATION FOR EXPLORATION AND DEVELOPMENT BLOCKS. • CONSORTIUM APPROACH, POOLING OTHER INDIAN OIL COMPANIES, SUCH AS IOC LTD, GAIL, ETC. • OPERATOR SHIP CONTRACTS (MANAGEMENT CONTRACTS). • TURKEY ENGINEERING CONTRACTS.
  • 10. COUNTRIES WHERE ONGC HAS ITS PRODUCING ASSETS. PRODUCING ASSETS OF OVL :- A. HAVING 20 PERCENT HOLDING IN SAKHALIN(RUSSIA) B. HAVING 45 PERCENT STAKE IN PARTNERSHIP WITH BRITISH PETROLEUM. C. HAVING 25 PERCENT EQUITY IN THE GREATER NILE OIL PROJECT IN SUDAN.
  • 11. COUNTRIES WHERE ONGC HAVING DISCOVERIES AND EXPLORATION  OVL ASSETS WITH DISCOVERIES & EXPLORATION :- a. HAVING 100 PERCENT INTEREST IN APPRAISAL & DEVELOPMENT IN QATAR. b. HAVING 70 PERCENT INTEREST IN EXPLORATION & APPRAISALIN EGYPT. c. 15 PERCENT INTEREST IN DEVELOPMENT PHASE IN BRAZIL. d. 20 PERCENT PARTICIPATION INTEREST IN MYANMAR.