A Study on Analysis of Financial Statements in ONGC Ltd.
COMPANY PROFILE OF ONGC
LIMITED
INDUSTRY PROFILE
• Profile: Oil and Natural Gas Corporation Ltd (ONGC.BO)
• Oil and Natural Gas Corporation Limited is a global energy holding company. The Company
is engaged in the exploration, development and production of crude oil and natural gas.
The Company's segments include Exploration & Production (E&P), and Refining.
• Oil and Natural Gas Corporation (ONGC) is an Indian government owned
enterprise and multinational crude oil and gas entity. Its registered office is in New Delhi. Its
top official is designated as Chairman,CEO and Managing Director who is a civil servant of
IAS cadre. It is owned by the Ministry of Petroleum and Natural Gas , Government of India .
It is the largest oil and gas
exploration and production company in the country, and produces around 70% of India's crude
oil (equivalent to around 57% of the country's total demand) and around 84% of its natural gas. In
November 2010, the Government of India conferred the Maharatnastatus to ONGC.
• In a survey by Government of India for fiscal year 2019–20, it was ranked as the largest
profit making PSU in India] It is ranked 7th among the Top 250 Global Energy Companies by
Platts.
• ONGC was founded on 14 August 1956 by Government of India. 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 17
• countries. ONGC has discovered 6 of the 7 commercially producing Indian Basins, in the last 50 years,
adding over
• 7.15 billion tonnes of In-place Oil & Gas volume of hydrocarbons in Indian basins.
Department of Commerce, K.L.E Society’s J. G. College of Commerce, Hubballi.
A Study on Analysis of Financial Statements in ONGC Ltd.
• 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%. Its Reserve Replacement Ratio for between 2005 and 2013, has been more
than one. During FY 2012–13, ONGC had to share the highest ever under-recovery of INR 89765.78
billion (an increase of INR 17889.89 million over the previous financial year) towards the under-
recoveries of Oil Marketing Companies (IOC, BPCL and HPCL). On 1 November 2017, the Union
Cabinet approved ONGC for acquiring majority 51.11% stake in HPCL (Hindustan Petroleum
Corporation Limited). On Jan 30th 2018, Oil & Natural Gas Corporation acquired the entire 51.11% stake
of Hindustan Petroleum Corporation.
HISTORY
• Foundation to 1956
• Pumpjack working in an oilfield of ONGC at Sivasagar, Assam
• Before the independence of India in 1947, the Assam Oil Company in the north-eastern and
Attock Oil company in the 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 the development of oil and gas resources.
• 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 the 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 the 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, the 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 the Minister of Natural Resources visited several
European countries to study the status of the 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,
• offshore in the early 1970s 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
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Department of Commerce, K.L.E Society’s J. G. College of Commerce, Hubballi.
A Study on Analysis of Financial Statements in ONGC Ltd.
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 per cent 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 Ankleshwar 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.
• 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).
• 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 a 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.
• 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 onshore and
offshore).
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Department of Commerce, K.L.E Society’s J. G. College of Commerce, Hubballi.
A Study on Analysis of Financial Statements in ONGC Ltd.
• In 2003, ONGC Videsh Limited (OVL), the division of ONGC concerned with its
foreign assets, acquired Talisman Energy's 25% stake in the Greater Nile Oil project.
• 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 2000 acres of land at Dahanu to process offshore gas.
• ONGC Videsh, along with Statoil ASA (Norway) and Repsol SA (Spain), has been engaged
in deep-water drilling off the northern coast of Cuba in 2012.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.
• In November 2012, OVL 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] 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.
• In January 2014, OVL and Oil India completed the acquisition of Videocon Group's ten percent
stake in a Mozambican gas field for a total of $2.47 billion.
• In June 2015, Oil and Natural Gas Corporation (ONGC) gave a Rs27bn ($427m) offshore contract for
the Bassein development project to Larsen & Toubro (L&T).
• In February 2016, the board of ONGC approved an investment of Rs. 5,050 crore in Tripura for drilling of wells
and creation of surface facilities to produce 5.1 million standard cubic feet per day gas from the state's fields.
• On 19 July 2017, the Government of India approved the acquisition of Hindustan Petroleum
COMPANY PROFILE
Oil and Natural Gas corporation limited is an INDIA –based oil exploration and production
company. The company through its subsidiaries is engaged exploration and production of oil and
gas in INDIA and abroad, including
Refinery power generation , petrol chemicals, liquefied natural gas (LNG) supply , pipeline
transportation , special economic zone (SEZ) development and helicopter services its segments
include operations in two categories: in India, which include onshore and offshore , and outside
India. The company approximately 22 oil and gas discoveries are in offshore and 12 in onshore.
The company’s subsidiaries include ONGC Videsh Ltd and Mangalore refinery and
petrochemical Ltd.
Oil and natural gas corporation Limited (ONGC) is a public sector undertaking (PSU) of the
government of India under the administrative control of the ministry of petroleum and natural
gas. It is India’s largest oil and gas exploration and production company . It produces around
70% of India’s crude oil (equivalent to around 25% o f the country’s total demand ) and trillion it
is one of India’s most valuable publicity- traded companies
Future development of which was to be the sole and exclusive
Department of Commerce, K.L.E Society’s J. G. College of Commerce, Hubballi.
A Study on Analysis of Financial Statements in ONGC Ltd.
responsibility of the state 1961-1990
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
over =seas territories. Inn the inland areas ONGC not only fond new resources in Assam but also
established new oil province in combat basin (Gujarat) while adding new proliferous areas in the
assam-arakan fold belt and east coast basins (both inland and offshore).
After 1990
The liberalized economic policy, adopted by the government of India in July 1991 sought to
deregulate and de- license the core sectors (including petroleum sector) with partial
disinvestments of government equity in public sector undertakings and other measures . As a
consequences thereof ONGC was reorganized as a limited company under the company’s act
1956 in February 1994 after the conversion of business of the erstwhile oil & natural gas
commission to that Oil & natural gas corporation limited in 1993, the go
1947-1960
during pre-independences, the Assam oil company in the north- eastern and attack oil company in
north_ western part of undivided India were the only oil companies producing oil in the country . The
major part of Indian sedimentary basins was deemed to be unfit for development of oil and gas
resources after independences the government realized the importance's of oil and gas for rapid
industrial development and its strategic role in defenses. Consequently while framing the industrial
policy statement of 1948 the development of the hydrocarbon industry was considered to be of
utmost necessity
until 1955 private oil companies mainly carried out exploration of hydrocarbon resources of India.
Assam oil company was producing oil at Igbo Assam (discovered in1889) and the oil India ltd. (a
50%joint venture between government of India and Burma oil company) was engaged in
developing two fields Naharkatiya and Moran in Assam in west Bengal
I 1955, government of India decided to develop the oil natural gas resources in the various regions
of the country as part of pubic sector development. With this objective an oil and natural gas
directorate was set up in 1955 under the the ministry of natural resources and scientific research the
department was constituted with a nucleus of geoscientists from the geological survey of India
in April 1956 the government of India adopted the industrial policy resolution which placed
mineral oil industry amongst the schedule ‘A’ industries the Government disinvested 2 per cent
of its sires through competitive bidding subsequently ONGC expanded its equity by another 2
per cent by offering shares to its employees.
Department of Commerce, K.L.E Society’s J. G. College of Commerce, Hubballi.
