CHAPTER 4
COMPANY PROFILE
4.1 OIL & NATURAL GAS CORPORATION LTD: An Overview
OIL AND NATURAL GAS CORPORATION LTD, (ONGC) today is the premier Indian
industry effectively participating in efficient implementation of both the economic as well as the
social mission of a national industry. Its growth has been one of consistent stability and
ascending productivity, matching international performance makers, through innovative
approach and participative management.
ONGC operates in the upstream sector of the petroleum industry on the unstructured
premises of accepting the intellectual software’s, geological thoughts and perceptions of the
petroleum geoscientists, as its basic raw materials until today, there has been no tool or technique
that can directly oil with in the earth crust, consequently, oil exploration has over been a highly
probabilistic cannot be defined within the confine of the scales and measures of the conventional
engineering. Input & Output ratios. In oil explorations activity, inputs are deterministic, but
output is probabilistic. It is a high reward business.
Further , oil exploration and production activities are multi-disciplinary, and the
industrial constantly operates under a syndrome of high-value high technology(of high rate of
obsolescence ) that mostly create compulsions for massive investment in exploration increases
exponentially because the ‘New Finds’ of oil deposits progressively become more and more
scarce and recovery from old fields become costlier.
Impressions often are focused in the form that ONGC is an Island of prosperity, and thus
is, expected to provide high measures of various subsidies to all in various types of industries in
the nationals as well as the private sector. Willing or otherwise ONGC has been providing such
‘support’ services to many Indian Industries, often at the cost of depletions of its logically earned
income & profits.
ONGC is a performing national industry constantly achieving commanding heights of
performance its attitudinal orientation in TO DO BETTERTHE THINGS BEING DONE WELL.
In this document, its structural fabrics management perceptions practices and performance have
been briefly profited .ONGC assures the nation than it business –like support of the govt. its
main aim is to accelerate the progress of the Indian petroleum industry that would lead to the
consolidation of the Indian Energy Security.
Exploration for hydrocarbon is a complex process starting with prognostication and
involving the entire activities like geo- scientific surveys, drilling drawing up technological
schemes, reservoir assessment, field definitions etc. There is no proven method of direct
detections of hydrocarbons; the only definite means of locating oil is through drilling. The two
key words in the business of oil explorations are perseverance and ability to take risk.
4.2 History: (1947 – 1960)
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 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
the Oil India Ltd. (a 50% joint venture between Government of India and Burma Oil Company)
was engaged in developing two newly discovered large fields Naharkatiya and Moran 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. Foreign
experts from USA, West Germany, Romania and erstwhile U.S.S.R visited India and helped the
government with their expertise. Finally, the visiting Soviet experts 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 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.
4.2.1 (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 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 in land 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 tones 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.
4.2.2(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
consequence thereof, ONGC was re-organized 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 of Oil &
Natural Gas Corporation Limited in 1993, the Government disinvested 2 per cent of its shares
through competitive bidding. Subsequently, ONGC expanded its equity by another 2 per cent by
offering shares to its employees.
During March 1999, ONGC, Indian Oil Corporation (IOC) - a downstream giant and Gas
Authority of India Limited (GAIL) - the only gas marketing company, agreed to have cross
holding in each other's stock. This paved the way for long-term strategic alliances both for the
domestic and overseas business opportunities in the energy value chain, amongst themselves.
Consequent to this 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.
Imbibe high standards of business ethics and organizational values. Abiding commitment to
safety, health and environment to enrich quality of community
