Oil and Natural Gas Corporation
|Type||Public Sector Undertaking|
|Traded as||NSE: ONGC
BSE SENSEX Constituent
CNX Nifty Constituent
|Founded||14 August 1956|
|Headquarters||Tel Bhavan, Dehradun, India|
|Key people||Sudhir Vasudeva
(Chairman & MD)
|Revenue||US$ 27.6 billion (2012)12|
|Operating income||US$ 5.4 billion (2012)12|
|Profit||US$ 3.8 billion (2012)12|
|Total assets||US$ 43.01 billion (2012)1|
|Total equity||US$ 25.74 billion (2012)1|
ONGC Videsh Ltd.
Oil and Natural Gas Corporation Limited (ONGC) is an Indian multinational oil and gas company headquartered in Dehradun, India. It is a Public Sector Undertaking (PSU) of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas (MoP&NG). It is India's largest oil and gas exploration and production company. It produces around 69% of India's crude oil (equivalent to around 30% of the country's total demand) and around 62% of its natural gas.1
On 31 March 2013, its market capitalisation was INR 2.6 trillion (US$ 48.98 billion), making it India's second largest publicly traded company.34 In a government survey for FY 2011-12, it was ranked as the largest profit making PSU in India.5 ONGC has been ranked 357th in the Fortune Global 500 list of the world's biggest corporations for the year 2012.6 It is ranked 22nd among the Top 250 Global Energy Companies by Platts.7
ONGC was founded on 14 August 1956 by Government of India, 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 kilometers 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 brownfields like Mumbai High, with the help of aggressive investments in various IOR (Improved Oil Recovery) and EOR (Enhanced Oil Recovery) schemes. ONGC has many matured fields with a current recovery factor of 25-33%.1 Its Reserve Replacement Ratio for between 2005 and 2013, has been more than one.1 During FY 2012-13, ONGC had to share the highest ever under-recovery of INR 494.2 million (an increase of INR 49.6 billion over the previous financial year) towards the under-recoveries of Oil Marketing Companies (IOC, BPCL and HPCL).1
Before the independence of India, the Assam Oil Company in the north-eastern and Attock Oil company in north-western part of the undivided India were the only oil producing companies, with minimal exploration input. The major part of Indian sedimentary basins was deemed to be unfit for development of oil and gas resources.8
After independence, the Central Government of India realized the importance of oil and gas for rapid industrial development and its strategic role in defense. Consequently, while framing the Industrial Policy Statement of 1948, the development of petroleum industry in the country was considered to be of utmost necessity.8
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.8
In 1955, Government of India decided to develop the oil and natural gas resources in the 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.8
A delegation under the leadership of the Minister of Natural Resources, visited several European countries to study the status of oil industry in those countries and to facilitate the 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 (1956-61).8
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.8
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 programs 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.8
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 petroliferous areas in the Assam-Arakan Fold Belt and East coast basins (both inland and offshore).8 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.8
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 Mussoorie 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 LP 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 Bartlseville 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 Ankleswar 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.
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.10 ONGC Videsh, along with Statoil ASA (Norway) and Repsol SA (Spain), has been engaged in deepwater drilling off the northern coast of Cuba in 2012.11 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.12
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.13 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.14
ONGC's operations include conventional exploration and production, refining and progressive development of alternate energy sources like coal-bed methane and shale gas.15 The company's domestic operations are structured around 11 assets (predominantly oil and gas producing properties), 7 basins (exploratory properties), 2 plants (at Hazira and Uran) and services (for necessary inputs and support such as drilling, geo-physical, logging and well services).15
- 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. ONGC helds 100% stake in ONGC Videsh Limited.1
- Mangalore Refinery and Petrochemicals Limited:
It is an oil refinery at Mangalore. The refinery was established after displacing five villages of Bala, Kalavar, Kuthetoor, Katipalla, and Adyapadi. ONGC helds 71.62% stake in ONGC Videsh Limited.1
- 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.16 OTPC have 2 no 9FA MAchines Supplied by GE USA
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.15
Product-wise revenue breakup for FY 2012-13 ( billion):17
The equity shares of ONGC are listed on the Bombay Stock Exchange,18 where it is a constituent of the BSE SENSEX index,19 and the National Stock Exchange of India,20 where it is a constituent of the S&P CNX Nifty.21
As on 31 March 2013, Government of India held around 69% equity shares in ONGC. Over 480,000 individual shareholders hold approx. 1.65% of its shares.22 Life Insurance Corporation of India is the largest non-promoter shareholder in the company with 7.75% shareholding.1
|Shareholders (as on 31-Mar-2013)||Shareholding1|
|Promoter - Government of India||69.23%|
|Banks, Financial Inst. & Insurance companies||09.69%|
|Foreign Institutional Investors (FII)||06.27%|
|Private Corporate Bodies||01.83%|
|Mutual Funds and UTI||01.13%|
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%).1 The attrition rate in FY 2009-10 was 0.42%.2324 In its CSR report for 2011-12, the company informed that 20% of its existing employees would super-annuate in next 5 years.15
- ONGC was ranked as the Most Attractive Employer in the Energy sector in India, in the Randstad Awards 2013.25
- ONGC received the ‘Golden Peacock Award 2013’ for its HSE practices.26
- In April 2013, it was ranked at 155th place in the Forbes Global 2000 for 2012.2728
- In 2011, ONGC was 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.
- It was conferred with 'Maharatna' status by the Government of India in November 2010.29 The Maharatna status to select PSUs allows more freedom in decision making.2930
- "Annual Report 2012-13". ONGC. 29 May 2013. Retrieved 9 November 2013.
- "ONGC: Income Statement FY 2012-13 (USD)". Business Week. Retrieved 9 November 2013.
- "Table 4-12: Top '50' Companies by Market Capitalisation as on March 31, 2013". NSE India. 31 March 2013. Retrieved 9 November 2013.
- "Eight blue-chip cos add Rs 44,239 cr in market cap". The Hindu. 31 March 2013. Retrieved 9 November 2013.
- "ONGC is No 1 profit-making PSU, BSNL worst performer: Survey". Indian Express. 4 March 2013. Retrieved 10 November 2013.
- "ONGC in 2012 Fortune 500". Retrieved 9 November 2013.
- "Platts Top 250 Companies - Oil & Natural Gas Corp Ltd". Platts. 1 October 2013. Retrieved 9 November 2013.
- "History". ONGC. Retrieved 10 November 2013.
- "Talisman pulls out of Sudan". BBC News. Associated Press. 10 March 2003. Retrieved 4 May 2012.
- Lewis, Clara (11 Sep 2011). "ONGC seeks 2K acres govt land at Dahanu". Times of India. Times News Network.
- Oil and Gas Journal 22May2012 http://www.ogj.com/articles/2012/05/repsol-declares-cuba-deepwater-wildcat-dry.html?cmpid=EnlDailyMay212012
- "ONGC makes huge oil discovery off West coast". 12-08-2012.
- "India's ONGC to pay $5bn for Conoco's Kashagan stake". BBC News. 27 November 2012. Retrieved 8 December 2012.
- "Indian OVL to Buy ConocoPhillips’s Stake in Kashagan Field". The Gazette of Central Asia. 27 November 2012.
- "Corporate Sustainability Report 2011-12". ONGC. Retrieved 10 November 2013.
- ONGC Tripura Power Project. Otpcindia.in. Retrieved on 2013-07-28.
- "Financial Results: 2013-14 Q1- ONGC/OVL/MRPL". ONGC. August 2013. Retrieved 10 November 2013.
- "ONGC LTD.". BSEindia.com. Retrieved 9 November 2013.
- "Scripwise Weightages in S&P BSE SENSEX". BSE India. Retrieved 9 November 2013.
- "NTPC Limited". NSE India. Retrieved 9 November 2013.
- "Download List of CNX Nifty stocks (.csv)". NSE India. Retrieved 9 November 2013.
- "Corporate Sustainability Report 2009-10". ONGC. Retrieved 9 November 2013.
- "Good ole oil". Business Today. 7 February 2010. Retrieved 9 November 2013.
- "Microsoft most attractive employer in India: Survey". Times of India. 19 April 2013. Retrieved 10 November 2013.
- "Occupational Health & Safety Award (GPOHSA)". goldenpeacockawards.com. 20 July 2013. Retrieved 10 November 2013.
- "Forbes Global 2000: ONGC climbs 16 ranks to position at 155". ONGC. 18 April 2013. Retrieved 10 November 2013.
- "Oil & Natural Gas". Forbes. 17 April 2013. Retrieved 10 November 2013.
- "ONGC, IOC conferred Maharatna status". Business Standard. 16 November 2010. Retrieved 10 November 2013.
- "Maharatna status for IOC, ONGC and NTPC". The Hindu. 16 November 2010. Retrieved 10 November 2013.
- Story of ONGC by I.A.Farooqi gives a historical account of Oil and Natural Gas Corporation from its foundation to the year 2000.
- Official website
- ONGC at Times of India
- ONGC on Facebook
- ONGC at Bombay Stock Exchange
- ONGC at National Stock Exchange of India