Oil and Natural Gas Corporation

Oil and Natural Gas Corporation Limited

Type PSU

Founded 1956

Headquarters Dehradun, India

R. S. Sharma
Key people
Chairman & MD

Industry Petroleum and Gas

Revenue ▲ US$24.04 billion (2008)

Net income ▲ US$ 4.934 billion (2008)

Total assets ▲ US$ 35.35 billion (2008)

Employees 34,000 (2008)

Website Ongcindia.com

Oil and Natural Gas Corporation Limited (ONGC) (incorporated on June 23, 1993) is
an Indian public sector petroleum company. It is a Fortune Global 500 company ranked
152nd, and contributes 77% of India's crude oil production and 81% of India's natural
gas production. It is the highest profit making corporation in India. It was set up as a
commission on August 14, 1956. Indian government holds 74.14% equity stake in this
company.
ONGC is one of Asia's largest and most active companies involved in exploration and
production of oil. It is involved in exploring for and exploiting hydrocarbons in 26
sedimentary basins of India. It produces about 30% of India's crude oil requirement. It
owns and operates more than 11,000 kilometres of pipelines in India. Until recently
(March 2007) it was the largest company in terms of market cap in India.[1].
[ History
Foundation

An ONGC oil rig in the Arabian sea

In August 1960, the Oil and Natural Gas Commission was formed. Raised from mere
Directorate status to Commission, it had enhanced powers. In 1959, these powers were
further enhanced by converting the commission into a statutory body by an Act of
[Indian Parliament]
1960-2007
Since its foundation stone was laid, ONGC is transforming India’s view towards Oil and
Natural Gas by emulating the country’s limited upstream capabilities into a large viable
playing field. ONGC, since 1959, has made its presence noted in most parts of India
and in overseas territories. ONGC found new resources in Assam and also established
the new oil province in Cambay basin (Gujarat). In 1970 with the discovery of Bombay
High (now known as Mumbai High), ONGC went offshore. With this discovery and
subsequent discovery of huge oil fields in the Western offshore, a total of 5 billion
tonnes of hydrocarbon present in the country was discovered. The most important
contribution of ONGC, however, is its self-reliance and development of core
competence in exploration and production activities at a globally competitive level.
[Post-1990

ONGC's HAL Dhruv helicopter operating off the coast of Mumbai.

Post 1990, the liberalized economic policy was brought into effect, subsequently partial
disinvestments of government equity in Public Sector Undertakings were sought. As a
result, ONGC was re-organized as a limited company and after conversion of business
of the erstwhile Oil & Natural Gas Commission to that of Oil and Natural Gas
Corporation Ltd in 1993, 2 percent of shares through competitive bidding were
disinvested. Further expansion of equity was done by 2 percent share offering to ONGC
employees. Another big leap was taken in March 1999, when ONGC, Indian Oil
Corporation (IOC) and Gas Authority of India Ltd.(GAIL) agreed to have cross holding in
each other’s stock. Consequently the Government sold off 10 per cent of its share
holding in ONGC to IOC and 2.5 per cent to GAIL. With this, the Government holding in
ONGC came down to 84.11 per cent. In 2002-03 ONGC took over Mangalore Refinery
and Petrochemicals Limited (MRPL) from Birla Group and announced its entrance into
retailing business. ONGC also went to global fields through its subsidiary, ONGC
Videsh Ltd. (OVL). ONGC has made major investments in Vietnam, Sakhalin and
Sudan and earned its first hydrocarbon revenue from its investment in Vietnam. At the
time the Second Sudanese Civil War was under way, and the government of Sudan
was almost totally reliant on oil revenues for its war effort. This war effort was
repeatedly accused of war crimes, human rights abuses, and genocide. International
observers accused the Sudanese government of forcibly displacing residents to make
way for oil exploration and exploitation. As part of a protest the Presbyterian Church of
Sudan sued a company in an American court for genocide, stating They had helped
Sudanese officials "bomb churches, kill church leaders and attack villages in an effort to
clear the way for oil exploration." In an unprecedented event an American judge decided
the lawsuit was valid and later dismissed by the US District Court for the Southern
District of New York, pending any appeal by the plaintiffs. The court concluded that the
plaintiffs had no admissible evidence to support the claims against the company. A
divestment drive resulted in the Sudan interest acquired through selling holdings to an
Indian company ONGC Videsh.
In 2009, ONGC discovered a massive oil field, with up to 1 billion barrel reserves of
heavy crude, in the Persian Gulf off the coast of Iran.[2] Additionally, ONGC also signed
a deal with Iran to invest US$3 billion to extract 1.1 billion cubic feet of natural gas from
the Farzad B gas field.[3]
International rankings
• ONGC has been ranked at 198 by the Forbes Magazine in their Forbes Global
2000 list for the year 2007 [4].
• ONGC has featured in the 2008 list of Fortune Global 500 companies at position
335, [5] a climb of 34 positions from rank of 369 in 2007.
• ONGC is ranked as Asia’s best Oil & Gas company, as per a recent survey
conducted by US-based magazine ‘Global Finance’
• 2nd biggest E&P company (and 1st in terms of profits), as per the Platts Energy
Business Technology (EBT) Survey 2004
• Ranks 24th among Global Energy Companies by Market Capitalization in PFC
Energy 50 (December 2004).
Economic Times 500, Business Today 500, Business Baron 500 and Business Week
recognizes ONGC as most valuable Indian corporate, by Market Capitalization, Net
Worth and Net Profits.[6] ONGC (Oil and Natural Gas Corporation Limited) is India's
leading oil & gas exploration company. ONGC has produced more than 600 million
metric tonnes of crude oil and supplied more than 200 billion cubic metres of gas since
its inception. Today, ONGC is India's highest profit making corporate. It has a share of
77 percent in India's crude oil production and 81 per cent in India's natural gas
production.

The origins of ONGC can be traced to the Industrial Policy Statement of 1948, which
called for the development of petroleum industry in India. Until 1955, private oil
companies such as Assam Oil Company at Digboi, Oil India Ltd (a 50% joint venture
between Government of India and Burmah Oil Company) at Naharkatiya and Moran in
Assam, and Indo-Stanvac Petroleum project (a joint venture between Government of
India and Standard Vacuum Oil Company of USA) at West Bengal, were engaged in
exploration work. The vast sedimentary tract in other parts of India and adjoining
offshore were 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. To achieve this objective an Oil and Natural Gas Directorate was
set up in1955, as a subordinate office under the then Ministry of Natural Resources and
Scientific Research.

The Industrial Policy Resolution of 1956 placed mineral oil industry among the schedule
'A' industries. In August 1956, to ensure efficient functioning of the Oil and Natural Gas
Directorate, the Directorate was raised to the status of a commission with enhanced
powers. 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. In
1960s, ONGC found new resources in Assam and established new oil province in
Cambay basin (Gujarat). In early 1970s went offshore and discovered a giant oil field in
the form of Bombay High. After liberalization in 1991, ONGC was re-organized as a
limited Company under the Company's Act, 1956 in February 1994. Today, ONGC has
grown into a full-fledged horizontally integrated petroleum company. Recently, ONGC
has made six new discoveries, at Vasai West (oil and gas) in Western Offshore, GS-49
(gas) and GS-KW (oil and gas) in Krishna-Godavari Offshore, Chinnewala Tibba (gas)
in Rajasthan, and Laipling-gaon (oil and gas) and Banamali (oil), both in Assam.

ONGC has a fully owned subsidiary, ONGC Videsh Ltd (OVL) that looks for exploration
opportunities in other parts of the world. OVL is pursuing exploration of oil and gas in
Russia, Iran, Iraq, Libya Myanmar and other countries. ONGC has also acquired 72%
stake in MRPL with full management control of the 9.69 tonne, state-of-the-art refinery.

Major Achievements of ONGC

• Judged as Asia's best Oil & Gas company, as per a recent survey conducted by
US-based magazine 'Global Finance'
• Ranked as the 2nd biggest E&P company (and 1st in terms of profits), as per the
Platts Energy Business Technology (EBT) Survey 2004.
• Leads the list of Indian companies listed in Forbes 400 Global Corporates and
Financial Times Global 500 by Market Capitalization.
• Only fully-integrated petroleum company in India, operating along the entire
hydrocarbon value chain.
• Holds largest share of hydrocarbon acreages in India
•