Oil and Natural Gas Corporation

Type	Public Sector Undertaking
Traded as	NSE: ONGC, BSE: 500312 BSE SENSEX Constituent
Founded	14 August 1956
Headquarters	Tel Bhavan, Dehradun, India
Key people	Sudhir Vasudeva (Chairman & MD)
Operating income	US$ 06.55 billion (2012)[1]
Profit	US$ 04.22 billion (2012)[1]
Employees	32,862 (2012)[1]

Oil and Natural Gas Corporation Limited (ONGC) (NSE: ONGC, BSE: 500312) 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, 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.^[2] It is one of the largest publicly traded companies by market capitalization in India.^[3] ONGC has been ranked 357th in the Fortune Global 500 list of the world's biggest corporations for the year 2012.^[4] It is also among the Top 250 Global Energy Company by Platts.^[5]

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 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. . 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.

History [edit]

Foundation to 1961 [edit]

During the pre-independence period, the Assam Oil Company in the northeastern and Attock Oil company in northwestern 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 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.

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 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.

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 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.

1961 to 2000 [edit]

An ONGC platform at Bombay High in the Arabian Sea

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). 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 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 discoeries 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 assistane from Phillips.

2000 to present [edit]

In 2003, ONGC Videsh acquired Talisman Energy's 25% stake in the Greater Nile Oil project.^[6]

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.^[7] 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.^[8] 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.^[9]

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.^[10] 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.^[11]

ONGC is currently the most profitable Public Sector Firm of India. ^[12]. It has topped the coveted list of top ten most profit-making PSUs of India for the year of 2011-12.

ONGC Videsh [edit]

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 Tripura Power Company [edit]

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.^[13]

References [edit]

1. ^ | About | ONGC

Further reading [edit]

• Story of ONGC by I.A.Farooqi gives a historical account of Oil and Natural Gas Corporation from its foundation to the year 2000.

External links [edit]

Companies portal

• Official website

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