Courage to Explore, Knowledge to Exceed, Technology to Excel

1
ONGC Song

2
Courage to Explore, Knowledge to Exceed, Technology to Excel

3
Investor & Analyst Meet

Mumbai
June 27, 2006

4
Presentation overview

Highlights
Performance
– ONGC
– OVL
– MRPL
– Group
Initiatives
Strategic pursuits
5
Highlights

6
 A New Mission

“I would suggest ONGC to give world leadership in

management of energy source, exploration of
energy sources, diversification of energy sources,
technology in underground Coal Gasification and
above all finding new ways of tapping energy
where ever it is, to meet the ever growing
demand of the country”.
Dr. APJ Abdul Kalam
President of India
14th August 2005

7
 ONGC’s
attractive position

8
Navratna PSE with 50 years of
industry experience

9
Dominant position in Indian
Oil & Gas operations

10
 Highly attractive
international portfolio

11
Very low financial leverage and
financially sound

12
Strong partnerships with
Global Oil & Gas majors

13
Strong government support

14
Capable Management team

15
Mission & vision
Cornerstone of success

Oil & gas company of

global standards

Commitment towards Dynamic and Good corporate

excellence progressive governance

Consolidate dominant Professionally managed

Provide added value to all
position in the E&P and company, competitive &
stakeholders & support
integration into refining mission to build a global
national economic growth
& marketing activities integrated oil & gas major

16
 Highlights: ONGC

Highest ever profit

Ï PAT: Rs 14,431 Crore up 11%

Ï Gross Income: 50,556 Crore up 4%
Ï EPS: 101.20 up 11%
Ï Dividend 450%

17
Highlights: OVL

Increase/
FY 2005 FY 2006
decrease
Production (MTOE) 5.06 6.34 25% ©
Revenues (Rs Crore) 6,026 8,171 36% ©
PAT (Rs Crore) 761 901 16% ©

18
 Highlights: MRPL

Increase/
FY 2005 FY 2006
decrease
Throughput (MMT) 11.85 12.12 2% ©
Capacity utilization (%) 122 125 2% ©
Exports (Rs Crore) 6,191 11,917 94% ©
Turnover (Rs Crore) 20,693 28,243 37% ©
Net Profit (Rs Crore) 880 372 58% ª

19
Highlights: ONGC Group

Increase/
FY 2005 FY 2006
decrease
Revenues (Rs Crore) 62,224 74,312 19.4% ©
PAT (Rs Crore) 14,339 15,398 7.3% ©
Net Worth (Rs Crore) 48,058 56,402 17.4% ©

20
 ONGC: Moody’s Credit Rating

Indicative Foreign Currency debt rating: Baa1

(Two notches higher than Sovereign Rating)

Local Currency issuer rating: A2

(Six notches higher than Sovereign Rating)
Outlook: Stable

Highest ever credit ratings assigned by Moody’s

to any Indian Corporate.

21
 ONGC: CRISIL & ICRA Rating

Highest applicable ratings for

domestic companies by CRISIL and ICRA

CRISIL AAA
ICRA LAAA

22
 Shareholding Pattern
(As on 23rd June 2006)

FIIs shareholding increases to 9.52%

FIIs holding in % 9.52 Percentage

IPO 8.37 PSUs, 10.47
8.05
FIIs, 9.52
6.09 6.36

Indian Fis, 2.74

Govt., 74.14
Mutual Funds,
1.01
0.6
Others, 0.43 Public, 1.69
3

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05
03

04

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4

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Ju 6
04

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ar
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De

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M

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Paid-up Share Capital : Rs.1,425.93 Crore

23
 ONGC share price vs NIFTY

1600 10000

9000

8000
1200
7000

6000
ONGC Rs

NIFTY
800 5000

4000

3000
400
2000

1000

0 0
4/2/01 10/2/01 4/2/02 10/2/02 4/2/03 10/2/03 4/2/04 10/2/04 4/2/05 10/2/05 4/2/06

24
New Finds/ Reserve Accretion

10 New oil & gas finds in 2005-06

Deepwater: 5 Shallow offshore: 3 Onland: 2

1. KG-DWN-98/2-D-1 1. RV-1, Mumbai 1. Turputallu, KG
2. KG-DWN-98/2-A-1 2. B-9-1, Saurashtra 2. Mekeypore, Assam
3. KG-DWN-98/2-U-1 3. GS-15-E, KG
4. KG-DWN-98/2-W-1
5. KG-DWN-98/2-E-1

Reserve Accretion: 51.53 MTOE

25
OVL

9 acquisitions in 05-06 against 6 in 2004-05

Sakhalin-1 goes on stream in October 2005,
– the 3rd Producing Asset for OVL
Syria, the 4th producing Asset
Maiden venture in Latin America (Brazil)
OMEL’s maiden venture in an international bidding
round, gets two blocks in Nigeria

26
 MRPL

First in India to produce Euro III quality MS & HSD

Ready to commence production of Euro-IV HSD

27
 Awards & Accolades

256th in Forbes Global 2000 list (Mar, 2006), Topper from

India

454th in FortuneGlobal 500 & 95th in FortuneGlobal 100

(July, 2005)

PFC Energy 50: 18th among top 50 publicly traded Global

Oil & Gas Companies (Jan, 2006)

Financial Times Global 500: 158th among the world’s

largest companies (June, 2006), topper from India

28
 Awards & Accolades

Moitlal Oswal CNBC: Biggest Wealth Creator among Indian

Companies (Nov, 2005)

BT: Most Valuable Company in India (Nov, 2005)

ET 500: No.1 by Market Cap & Net Profit (Feb, 2006)

No.1 in Business India’s Super 100 list (Nov, 2005)

Businessworld-IMRB survey (June, 2006): Most respected

PSU

Best PSU: People’s Award for Excellence in Business &

Economy 2006, by Planman Media (June 2006)
29
 Awards & Accolades

Golden Peacock Award 2005 for Corporate Governance

Golden Peacock Global Award 2005 for Corporate

Governance (May, 2006)

Amity Corporate Excellence Award (Feb, 2006)

TERI Award for Corporate Social Responsibility (May, 2005)

National Award for Excellence in Cost Management (Dec

2005)

Enterprise Excellence Award by Indian Institution of

Industrial Engineers (May, 2006)

All India Public Sector Sports Promotion Board: the best

sports promoter among all PSUs (24.06.2006).

30
Performance
2005-06

31
 ONGC
2005-06

32
 Reserve Accretion

Oil + Oil-equivalent Gas

Production 46.97 MTOE

Reserve Accretion: 51.53 MTOE

33
NELP-V

ONGC awarded
8 out of 20 Blocks

Deepwater: 2 Blocks (out of 6)

Shallow water: 2 Blocks (out of 2)
Onland: 4 Blocks (out of 12)

59 out of 108 Blocks (50%) awarded in Five NELP rounds

34
 ONGC: Oil production (MMT)
(excluding PSC JVs)

26.48
26.01 26.06
24.71 24.40 27.35

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

35
 ONGC: Gas Production (BCM)
(excluding PSC JVs)

24.04 24.24 23.58 22.97 22.57 21.97

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

36
 ONGC: O+OEG Production (MMT)
(excluding PSC JVs)

48.74 50.25 49.64 49.45 46.97

24.04 24.24 23.58 22.97

22.57

24.71 26.01 26.06 26.48

24.40

2001-02 2002-03 2003-04 2004-05 2005-06

Oil (MMT) Gas (MTOE)

37
 ONGC: Gas Sales (BCM)
(excluding PSC JVs)

19.24 19.44 19.07 18.52 18.23

17.13

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

38
 ONGC: VAP Production (MMT)

3.637 3.795 3.628 3.478 3.428

2.903

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

39
 PSC JVs Production (MTOE)

2.97 3.25 4.32 3.78 4.14

2.60
2.43
2.11
1.68
1.38

1.59 1.57 1.72 1.67 1.71

2001-02 2002-03 2003-04 2004-05 2005-06

Oil (MTOE) Gas (MTOE)

40
ONGC: Financials
2005-06

41
Gross Income (Rs Crore)

Highest ever Gross Income

Up 4%

0 .6 %
= 2
R
CAG 48,442
50,556

35,387 34,045

23,857

2001-02 2002-03 2003-04 2004-05 2005-06

42
Net Profit (Rs Crore)

Highest ever Net Profit

Up 11%
.5 %
R = 23
CAG 14,431
12,983

10,529
8,664

6,198

2001-02 2002-03 2003-04 2004-05 2005-06

43
Capital Investment

Again highest ever by any Indian Corporate

11,421
30 % 10,681
R =
CAG

6,852
6,063

4,040

2001-02 2002-03 2003-04 2004-05 2005-06

44
 Capex analysis
99.7% on E&P

JVC
Projects 7.2% E&P Acquisition
35.0% 6.1%

Downstream
0.3%
Survey
13.1%
R&D
0.9%

Dev. Drilling
Expl. Drilling
16.4%
20.9%

45
 How each Rupee was earned

2004-05 2005-06
Natural Gas Natural Gas
11% 13%

VAP
10%
VAP
13%
Trading
Trading
11%
Crude oil 7%
Crude oil
Others 62%
64% Others
4%
5%

46
 Return on Capital Employed

ROCE (%)

59
54 57
46
39

2001-02 2002-03 2003-04 2004-05 2005-06

47
 Current Ratio

Current Ratio (X : 1)

2.79 2.62 3.08

2.62
2.45

2001-02 2002-03 2003-04 2004-05 2005-06

48
 Debt-Equity Ratio

Debt-Equity Ratio (X : 1)

0.100

0.010
0.010 0.003 0.002

2001-02 2002-03 2003-04 2004-05 2005-06

49
 Earning per Share

Highest ever Earning per Share

EPS (Rs per Share)

101.20
91.05
73.84
60.76

43.47

2001-02 2002-03 2003-04 2004-05 2005-06

50
 Book Value

Book Value (Rs per Share)

376
325
281

250
207

2001-02 2002-03 2003-04 2004-05 2005-06

51
Contribution to Exchequer (Rs Crore)

22,812 23,376

19,101
16,858

10,817

2001-02 2002-03 2003-04 2004-05 2005-06

52
 Dividend

Highest ever by any Indian Corporate

Dividend to Govt. of India: 4,757 Crore

6,417
5,704 Dividend (%)

450
4,278 400

3,422 300

1,996 150 240

2001-02 2002-03 2003-04 2004-05 2005-06

2001-02 2002-03 2003-04 2004-05 2005-06

53
ONGC Videsh Ltd.
2005-06

54
 ONGC Videsh Ltd.
21 Projects (31 Blocks) in 13 Countries

00-01 01-02 02-03 03-04 04-05 05-06

Countries 1 +3 +3 +6 +9, -2
Vietnam Iraq Sudan Australia Cuba (2)
Russia Libya Ivory Coast Nigeria (JZD)
Myanmar Iran Syria (+2 in Vietnam &
(+2 in +1 in Myanmar,
Sudan), Egypt, Qatar,
Sudan Libya, Syria)
Pipeline

Projects* 1 4 8 8 14 21
-Producing 2 2 2 4
-Discovered 2 1 2 3 4
-Exploration 2 5 4 8 12
-Pipeline 1 1

2006-07: OVL in Brazil & OMEL in Nigeria

55
* Includes Sudan Pipeline project
OVL

9 acquisitions in 05-06 against 6 in 2004-05

Sole Operator in 8 Assets &
Joint operator in 2 Assets

56
OVL

October 2005: Sakhlin-1 goes on stream

3rd Producing Asset

Full oil production by 1st Qtr. 2007

OVL’s share: 50,000 bpd (oil only)

57
OVL

Syria: the 4th Producing Asset

Transactions completed on 31st Jan 2006

Purchase retrospective to 1st July 2005

JV with CNPC

58
OVL

OVL’s share of Production

– Greater Nile Project : 3.413 MMT of oil
– Vietnam : 1.672 BCM of gas
– Syria : 0.957 MMT of crude oil
– Sakhalin : Limited oil and Gas production

59
OVL

OVL’s Reserve Replacement Ratio 2.3

– Holds ~1.519 billion barrels of proven oil and gas
reserves

– Added 107.5 million barrels O+OEG reserves in 05-

06
22.8 million barrels O+OEG : 4 PSCs in Syria
83.68 million barrels O+OEG : commercial
discoveries

60
 OVL

O+OEG Production up 25%

0.25 3.87 5.06 6.34

1.76

1.35

0.52

3.35 3.71 4.58

0.18
0.07

2002-03 2003-04 2004-05 2005-06

Oil (MMT) Gas (MTOE) 61

 OVL

Turnover up 36%

8,171
Rs Crore

6,026

3,502

233

2002-03 2003-04 2004-05 2005-06

62
 OVL

Net profit up 18%

901
Rs Crore
761

428

59

2002-03 2003-04 2004-05 2005-06

63
OVL in Brazil

OVL’s maiden entry in Latin America

15% stake in BC-10 deep water block, Brazil
Potential production ~ 100,000 bbls/day

64
OVL in Sudan

741 Km (12” dia) Product pipeline

Khartoum Refinery to Port Sudan

Project contract price: USD 194 Million

Completed 2 months ahead of schedule
in August 2005

65
OMEL in Nigeria

OMEL won two prospective oil & gas blocks in

Nigeria 2006 Mini Bid Round

Maiden venture in an international bidding

round

66
 MRPL
2005-06

67
 MRPL

Best in Energy Management

Remarkable Turnaround Management
Exports doubled
Direct sales go up
Distillate yield improves
68
 MRPL

Highest capacity utilization 125%

11.85
12.12
10.05

7.26

2002-03 2003-04 2004-05 2005-06

69
 MRPL

Turnover up 36%

49 % 28,243
R = Rs Crore
CAG
20,693

12,612

8,581

2002-03 2003-04 2004-05 2005-06

70
 MRPL

Net profit down 58%

880

Rs Crore
459 372

-412

2002-03 2003-04 2004-05 2005-06

71
 MRPL

Highest-ever Export Sales

Export sales increased by 94%

2006: Rs 11,917 Crore

FY 2005: Rs 6,191 Crore

72
MRPL: Debt/Equity ratio

Debt/Equity ratio reduced

31st March 2003: 9.7:1

31st March 2006: 0.82:1

73
 MRPL

MRPL Board recommended

dividend of 7% (Rs 140 Crore) for 2005-06

74
MRPL Refinery upgradation & expansion
9.69 MMTPA to 15 MMTPA

Investment: Rs 8,000 Crore

75
 MRPL
At 15 MMTPA Capacity

84% distillate yield out of crude run

Improved yield pattern/ product range
Increased capability to use cheap,
heavy, sour & high TAN crude oil

76
 MRPL
At 15 MMTPA Capacity

integrated Aromatic Complex: 0.9 MMTPa Px

@ Rs 5000 Crore
Integrated Olefin Complex @ Rs 12,000 Crore
(under feasibility study)

77
 MRPL received
Jawaharlal Centenary Gold Medal for Energy
Management, 2nd consecutive year, from CHT,
MOP&NG
Golden Peacock Award for best Environment
Management
Best safety managed refinery, 5 Star Rating from
British Safety Council

78
ONGC Group
2005-06

79
 ONGC Group
Oil production down 3.6 %

26.30 27.76 31.14 31.86 30.69

0.18 3.35 3.71

1.67
4.58
1.57 1.72
1.59 1.71

24.71 26.01 26.06 26.48

24.4

2001-02 2002-03 2003-04 2004-05 2005-06

ONGC JV OVL
80
 ONGC Group
Gas production up 1.2%

25.42 25.99 26.16 26.43 26.75

0.07
0.52 1.35 1.75
1.38 1.68 2.60
2.11 2.43

24.04 24.24 23.58 22.97

22.57

2001-02 2002-03 2003-04 2004-05 2005-06

ONGC JV OVL
81
 ONGC Group
O+OEG production down 1.5 %

51.72 53.75 57.29 58.30 57.45

26.16 26.46 26.76

25.99
25.42

31.13 31.84
26.30 27.76
30.69

2001-02 2002-03 2003-04 2004-05 2005-06

Oil (MMT) Gas (MTOE)

82
 ONGC Group

Turnover up 19%
Rs Crore

74,312
%
R = 33 62,224
CAG

45,302

35,564
23,890

2001-02 2002-03 2003-04 2004-05 2005-06

83
 ONGC Group

Billion USD 2001-02 2002-03 2003-04 2004-05 2005-06

Turnover 4.91 7.46 10.57 14.21 16.63

84
 ONGC Group

Net Profit up 7%
Rs Crore

25 % 15,398
R =
CAG 14,339

10,467 9,380

6,222

2001-02 2002-03 2003-04 2004-05 2005-06

85
 ONGC Group

Net worth up 17 %
Rs Crore

R = 19%
CAG 56,402

48,058

40,740
35,639

29,636

2001-02 2002-03 2003-04 2004-05 2005-06

86
Concerns

87
 Concerns

Subsidy payout
Gas pricing

88
 Subsidy payout

Sharing subsidy on price sensitive petroleum

products with downstream oil companies

Rs Crore 2003-04 2004-05 2005-06

Discount on sales 2,690 4,104 11,956

Impact on PAT 1,596 2,553 7,210

89
 Gas pricing

ONGC gets USD 1.75/mmbtu

(USD 1.05/mmbtu in NE)

whereas PMT JV gets USD 4.75/ mmbtu

90
Initiatives

91
MUT Gas Trunk Pipeline

Commissioned on 15th July 2005

92
Shallow gas exploration

Cambay & KG basins

Cambay: Confirmed presence of commercially

exploitable gas in Ankleshwar field

KG: Data acquisition in progress

93
Sea-bed Logging

Contract awarded to M/s EMGS, Norway

API on all 12 SBL prospects completed

2 additional prospect identified and survey in progress

94
Integrity Pact
implemented from 1st July 2005

- First in India –

95
Collaboration with

Ente Nazionale Idrocarburi (ENI), Italy

deepwater E&P in India
third country opportunities
technical cooperation

96
Collaboration with

Norsk Hydro, Norway

deepwater E&P in India
third country opportunities
technical cooperation for thin oil recovery

97
M/s Cameron

Service facility of Central Workshop,

Vadodara

98
Domain Experts for

Seismic interpretation process validation,

Basin modeling, Petroleum system analysis,
advance reservoir characterization,
sequence stratigraphy

99
Corporate Commitment

Quality, Health, Safety & Environment

100% accreditation of all operational

installations and facilities obtained and
maintained

100
Strategic
Pursuits

101
 Strategic Pursuits

Monetizing Assets Assetizing Money

• Stabilizing output from producing • New facilities
fields • Facility renewal
• Bringing New & Marginal fields into • Value addition
production • New business
• Acquisitions

Chasing Molecule Clean Coal opportunities

• Power – OTPC, Wind Power • CBM: production from 2007
• Refinery – MRPL Expansion, KRPL, RRL • UCG: production from 2008
• SEZ- Dahej, Mangalore, Hazira • SCG: Collaboration with Shell
• Retail marketing

102
Monetizing Assets

103
 Stabilizing output

Mumbai High oil production

had peaked @ 470,000 bopd in 1985

had progressively dropped to 210,000 bopd in 2000-01
was restored to 270,000 bopd in 2005-06
HIGHEST IN EIGHT YEARS

Current level: 252,000 bopd

104
 Stabilizing output

Mehsana Asset

producing @ 47,450 bopd

Highest in 11 years

105
 Stabilizing output

Ahmedabad Asset

producing @ 35,000 bopd

Highest in 39 years

106
 Stabilizing output

Ankleshwar Asset

producing @ 43,000 bopd

Highest in 3 years

107
 New fields

Western Offshore D-1 field

went into production in Dec’05

currently @ 14,000 bopd

108
 New fields

Vasai East, Western offshore

Recoverable reserve
Oil 6.19 MMT, Gas 3.2 BCM

Production to begin: 2008

109
 Marginal fields

Bringing Marginal fields into production

Service contracts awarded for

8 onshore and 3 offshore fields
28 offshore fields to be developed departmentally
18 onshore marginal fields on offer

Investment: Rs. 12,700 Crore

110
 Assam Renewal Plan

Rs 3,300 Crore proposed to be invested

over 2005 thru 2008

to restore oil production to 3 MMTPA

effective 2009-10

111
Assetizing Money

112
12 Mega Construction Projects

worth USD 2.054 Billion

awarded in 2005-06

113
 Major Projects: E&P

Project cost
Projects
(Rs. Crore)

Marginal fields (cluster development) 12,700

D-1 Development 507
Vasai (East) Development 1,688
G-1 & GS-15 Development 1,263
Addl. Dev. Bassein field 2,937
Dev. of SB-11, Bassein 245
Addl. Dev A-1 layer in MHN 911
Assam Renewal Plan 3,000
Other Revamping Projects 3,492
26,743

114
 Major Projects: E&P
IOR/ EOR Projects under implementation (Rs 12,054 Crore)

Revised Cost
Sl. Projects
(Rs Crore)

1 MHN Redev. 3,240

2 MHS Redev. 6,579
3 IOR-Kalol 100
4 IOR-North Kadi Ph-I 63
5 IOR-Sobhasan 72
6 IOR-Rudrasagar* 219
7 IOR-Geleki 835
8 IOR-Lakwa* 345
9 IOR-North Kadi Ph-II 32
10 IOR-Heera Ph-II 569
Total 12,054
115
Project SCADA

Estimated investment Rs 281 Crore

to operate every well as Profit Centre

through real-time monitoring & optimization

Keystone to efficient production

116
Technology Induction

Seismic Acquisition, Processing & Interpretation

Drilling & related services
Logging, Well Stimulation, Well Control
Info-com applications
Facilities & Logistics

117
Seismic API Technology induction

Q-Marine, GXT,
Seismic Vessel - MV Sagar Samiksha
Multi-component Seismic survey
EM Pulse source, Virtual Drilling
RTOC, Air Borne Electromagnetic survey
4C-4D Project
Digital oil field monitoring
Digital Geophone
Accelerated Weight Drop
118
 Drilling & Field Services Technology

Drilling Hi-Tech, Multilateral, ERD & Side Track

wells
Non-damaging fluid
Low Toxicity Synthetic Oil Based Mud (LTSOBM)
Hydraulic Stage Collars
Riser-less drilling
Expandable casing
Medium Radius Drain Hole (MRDH)

119
 Production Technology

• FPSO
• Intelligent well completions, segmented
completion
• Onshore control room for offshore operations
• Dispersible smart plug
• New generation PWC-CFU
• Produced water re-injection
• Custody transfer meter
• Jack-up facility for B-173
• H2S scavenging for B-173
• Intelligent platform
120
New Business: Power

1,110 MW power
generation & transmission in Tripura
250 MW power merchant sale ex
Western offshore
2 x 50 MW Wind Farm in Gujarat &
Karnataka

121
Mangalore SEZ Ltd.

incorporated on 24th Feb 2006

ONGC Equity: 26%

Petrochemical complex, LNG, C2-C3, Power

Plant, Services etc.

122
Aromatic Complex, Mangalore SEZ

Project cost: Rs. 4,900 Crore

To produce 0.95 MMTPA Paraxylene &

0.15 MMTPA Benzene

123
Retail Market

More OVaL by Christmas 2006: Ahmedabad next

HiQ launch by Diwali 2006
Mangalore centers by New Year 2007

124
Clean Coal Opportunities

125
Clean Coal Opportunity

Coal Bed Methane (CBM)

Commercial production
targeted 2007

126
Clean Coal opportunities

Underground Coal Gasification (UCG)

Collaboration with
Skochinsky Institute of Mining (SIM), Russia

MOUs with
CIL, GSPC, GMDC, NLC

127
Clean Coal Opportunities

Surface Coal Gasification (SCG)

Collaboration with Shell

MOU with SCCI on 15th April 2006

followed by CIL and others

128
Thank you

129
Courage to Explore, Knowledge to Exceed, Technology to Excel

130