ONGC is an Indian state-owned oil and gas company that produces around 77% of India's crude oil and 81% of its natural gas. It has significant infrastructure including over 15,000 km of pipelines. ONGC focuses on exploring for and producing oil and gas both domestically and through international subsidiaries. It aims to increase oil and gas production capacity to meet India's growing demand and reduce reliance on imports.

1. B2B assignment

2. About the company
Oil and Natural Gas Corporation Limited (ONGC)is an
Indian multinational oil and gas company headquartered
in Dehradun, India
It is one of the largest Asia-based oil and gas exploration and
production companies.
produces around 77% of India's crude oil(equivalent to
around 30% of the country's total demand) and around 81%
of its natural gas

3. ONGC has been ranked 357th in the 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 Platts.
ONGC was founded on 14 August 1956 by the Indian state,
which currently holds a 69.23% equity stake.
 Its international subsidiary ONGC Videsh currently has
projects in 15 countries.
ONGC leads the league tables with net worth of Rs 40,002
crore. It is followed by NTPC at Rs 35,551 crore and Indian
Oil at Rs 22,974 crore.

4. PRODUCTS OF ONGC
Crude oil
Natural gas
Ethane
Superior Kerosene Oil
HSD
LPG
Motor Spirit
Aromatic Rich Naptha

5. Industries Analysis

6. The oil and gas industry has been instrumental in fuelling the
rapid growth of the Indian economy.
The petroleum and natural gas sector which includes
transportation, refining and marketing of petroleum
products and gas constitutes over 15 per cent of the GDP.
Growth continued in 2008-09 with the export of petroleum
products touching US$ 23.63 billion during April-December
2008.

7. Production
Domestic production of crude oil fell from 34.11 MT in
2007-08 to from 33.50 MT in 2008-09.
Refinery production in terms of crude throughput increased
to 160.77 MT in 2008-09 as compared to 156.10 MT in
2007-08.
The production of natural gas went up to 32.84 billion cubic
metres tonnes (BCM) in 2008-09, from 32.40 BCM in 2007-
08.
The projected production of crude oil during the 11th Five-
Year Plan (2007-2012) is 206.76 MMT, while that of natural
gas is 255.27 BCM.

8. Consumption
India's domestic demand for oil and gas is on the rise. As per
the Ministry of Petroleum, demand for oil and gas is likely to
increase from 176.40 million tonnes of oil equivalent (mm
tone) in 2007-08 to 233.58 mm tone in 2011-12.
India is the fifth largest country in the world in terms of
refining capacity, with a share of 3 per cent of the global
capacity.
Indian companies plan to increase their refining capacity to
242 mtpa by 2011-12 from about 149 mtpa in 2007.

9. Policy
100% FDI is allowed in petroleum refining, petroleum product
and gas pipelines and marketing/retail through the automatic
route.
For entry into petroleum product marketing/retail, an investment
in an upstream venture of over $450 million is required.
Virtual administrative price control of government over most
petroleum products.
Petroleum and Natural Gas Regulatory Board Bill to be enacted
shortly will result in the setting up of an Independent Regulator
for Oil & Gas.
 Natural Gas Pipeline Policy to be enacted shortly.

10. Outlook
High GDP growth rate, rapidly growing vehicle population
and better road infrastructure will drive consumption of
petroleum products.
Industry is expected to grow at a CAGR of about 8% to 10%
.
Over 190 MMT of refining capacity required by 2010.
Over 120MMSCMD of additional demand for Natural Gas in
the next five years.
Recent gas finds and increased use of gas for power
generation, petrochemicals, fertilisers and city gas
distribution

11. SWOT Analysis

12. Strength
State-owned: One of the biggest advantages & strength of the
company is that it is state owned. This led the company have great
infrastructure with the governments support. The policy making
also becomes easier due to the same reason. Moreover any undue
and sustained pressure creates due impact on the government as
well.
Efficient and Professional management Team: The
management team of ONGC comprises of some eminent figures
of the industry who has got wealth lot of experience in running
the Business and some of them has been successful entrepreneur as
well. These people are at the helm of any decision making
regarding the policy of the company.

13. Good Quality of Product: 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.
Maximum number of Exploration Licenses, including
competitive NELP rounds: ONGC has bagged 85 of the 162 Blocks
(more than 50%) awarded in the 6 rounds of bidding, under the New
Exploration Licensing Policy (NELP) of the Indian Government. This
enables the company to stay ahead of its competitors.
Strong Infrastructure: ONGC owns and operates more than 15000
kilometers of pipelines in India, including nearly 3800 kilometers of
sub-sea pipelines. No other company in India operates even 50 per cent
of this route length.

14. Weakness
State-owned: The control of state sometimes proves to be
a weakness for company as well. Because of Huge govt. of
India control on ONGC many important decisions are being
taken by govt. of India and sometime it proved to be fatal for
company’s profit and growth prospects. For example, the
government’s decision to provide certain amount of money
to the huge loss making petroleum companies from ONGC
has an adverse impact on the net profit of the company.
Low Production from aging Reservoirs: ONGC is
facing difficulties to produce oil from aging reservoirs.

15. Opportunity
Expansion of offshore operations: The oil reserves in
some African countries are still unexplored and ONGC has a
great opportunity to tap these markets to meet growing
needs petroleum in India. This will definitely add to the
production capacity of the company in a long way.
Increased Economic Activity: The economy all over the
world is showing signs of recovery and because of that the
crude oil prices will appreciate in the coming months. This
will help the company to gain the lost ground due to huge
decrease in the crude oil price last year.

16. Threat
Ever Changing Government Policy: The policy of the
government keeps changing over the period of time and any
unfavourable change from the company’s perspective may be
damaging for the company. For example, if the government
decides to subsidise the diesel further, this will put an extra
pressure to the profit of the company.
China’s Growing Demand: The Chinese company are directly
competing with ONGC in several parts of the world. The
aggressive bidding policy adopted by the Chinese companies might
result in either huge escalation in the cost or the company might
even loose the bid altogether. So this is going to be a great
concern for the company as far as securing the energy needs of the
country is concerned.

17. Threat
Rapid Change in Technology: The Company could fall behind
technology with everything changing so quickly this day and age. The
company is required to do a lot of investment in this area.
Threat of Alternative Fuel: The Company may face some real threat
from alternative fuels in the next decade or so. But this is not going to
be realised in the near future and the replacement of oil & natural gas.
Change in Policy by Foreign Governments: The foreign policy of
different governments keep changing over the period of time and this
does have a significant impact on the bidding policy or the tender invited
by the government in that particular country. Therefore, an
unfavourable policy change vis-a-vis Indian government might adversely
impact the future prospects of the company.

18. Future Projects

19. ONGC is planning to jointly invest 4 billion(Rs 20,000
crore) to scale up the production capacity of their oil fields at
Barmer in Rajasthan by 25,000 barrels of oil per day (bopd)
to two lakh bopd. They had earlier revised their production
target from 1.50 lakh bopd to 1.75 lakh bopd. The
commercial production at the Mangla filed in the Barmer
basin began in August 2009 with an initial capacity of 30,000
bopd. The production will be increased by a further 100,000
barrels per day in the first half of next year. This is quite a
significant development as oil from Rajasthan will account
for over 20% of India’s domestic oil production. ONGC
holds 30% participating interest in this project

20. Oil and Natural Gas Corporation (ONGC) will invest Rs
8,554 crore in producing crude oil from two clusters of
marginal fields in the western offshore by 2012.
The board also approved procurement of second generation
stimulation Vessel equipped with state-of-the-art technology
for the Mumbai offshore at an estimated cost of Rs 764.1
crore.
. At present, well stimulation jobs are done by Samudra
Nidhi, the only stimulation Bessel owned by ONGC. The
new vessel will not only augment the stimulation job but will
gradually replace Samudra Nidhi.

21. According to a press release dated July 23, 2009 ONGC
Board approved setting up of Polypropylene Unit by MRPL
integrated with its Phase-3 refinery project at a total project
cost of Rs 1803.78 Crore to be executed in 39 months (38
months for mechanical completion and 1 month for
commissioning). The capacity of the plant is 440,000 TPA of
Polymer grade Propylene product.

22. Value chain
1.High infrastructure and
technology with the
governments support
2.who has got wealth lot
of experience in running
the Business and some of
them has been successful
entrepreneur as well
3.ONGC has bagged 85 of the
162 Blocks (more than 50%),
-Being light, better sulphur and gravity
range hence attract a premium in the
market.

23. Supply chain of Oil and Gas Industry
Exploration includes seismic, geophysical and geological operations.
Production operations include drilling, reservoir, production, and facilities
engineering.
Refining is a complex operation and its output is the input to marketing.
In the oil and gas industry, almost all significant and important operations
are planned in advance.
The whole process can be massaged and fine-tuned into a high
performance money making machine

24.  Raw Material Supplies:
 Process industry has limited choice of suppliers for raw material
 Supplies in petroleum industry are dominated by cartels
 It is a sellers market wrt supply of raw material
 Raw Material Prices:
 Raw material prices are highly unstable and fluctuating on weekly or
even daily basis
 Fluctuating prices directly affect the supply chain costs and prices of
final product

25. Reverse Production Flow:
The production flow is reversed in petroleum
industry.
In downstream petroleum companies, inventory
starts from one product, i.e., crude and creates many
products like petrol, diesel, naphtha, bitumen, etc
High Transportation Costs :
Transportation costs about 20% of the production
cost.
Length of Supply Chain:
Very Complex and lengthy supply chain

26. Social media
ONGC internal communications website ONGCReports has
secured an international award for ‘Online Internal
Communications’ from the prestigious ‘Society for New
Communications Research’ [SNCR], New York, USA.
ONGCReports team has implemented significant innovative
and employee-engaging features since 2015 and now
commands a rich, diverse and balanced portfolio of best-in-
class features on this virtual space of ONGCians. A high-
growth and collaborative engagement has been achieved in
Internal Communications in the last one and half years by
instituting best-in-class intranet portal features, many of which
are pioneering in the Indian public sector.

27. Crude OIL
Natural Gases
LPG
Kerosene OIL
HSD
Motor spirit
Mineral Oil

28. Recommendations
The oil reserves in some African countries are still unexplored and
ONGC has a great opportunity to tap these markets to meet growing
needs petroleum in India. This will definitely add to the production
capacity of the company in a long way.
Security of personnel & property especially crude oil continues to be a
cause of concerning certain area.
 In some exploration Company involves high technology, high
technology, High investment and high risks
Following decision of Government like, the government’s decision to
provide certain amount of money to the huge loss making petroleum
companies from ONGC has an adverse impact on the net profit of the
company