Oil and Natural Gas Corporation
Encyclopedia : O : OI : OIL : Oil and Natural Gas Corporation
ONGC (Oil and Natural Gas Corporation Limited) (incorporated on June 23, 1993) is a public sector petroleum company in India. It is a Fortune 2000 company, the most valuable company in India (by market capitalisation) contributing 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.
It is involved in exploring and exploiting hydrocarbons in 26 sedimentary basins of India. It produces about 30% of India's crude oil.
Oil & Natural Gas
Chairman: Subir Raha
Sales $9.78 bil
Profits $2.16 bil
Assets $19.18 bil
Market Value $27.86 bil
Employees 38,033
News
India's ONGC lags in global oil race. As India's most valuable company, Oil and Natural Gas Corp (ONGC), looked poised last year to take the world's oil industry by storm, snatching foreign assets from Chinese and Western rivals in a global race for resources.Feeling the pinch: ONGC's setbacks in acquiring major oil resources are made worse by the Indian government's order to help shoulder the burden of subsidised fuels earlier this year. Since then, the firm has been beaten out of two major prizes abroad and humbled at home. Yet, officials say it will not be deterred in its quest to fulfill India's state-sponsored ambition to secure future oil supplies for its billion-plus people.
ONGC has gained junior shares in a host of projects, from Russia's Sakhalin-1, Iran's Yadavaran oilfield and Sudanese properties abandoned by Western investors.
But it has yet to take a lead role that would give it more say and a bigger share of future production.
'Wherever they are going, it is not because of competence. They are sleeping partners. Anybody can do that,' said T N R Rao, India's former petroleum secretary.
The race is gaining urgency both for India and ONGC as Chinese and other Asian competitors snap up plum properties in the face of stagnating domestic production. ONGC chairman Subir Raha says his company, a late entrant in the race for foreign assets, is doing 'reasonably well'.
The 50-year-old firm has acquired interests in 16 overseas projects since it started looking abroad in 2001, although its biggest successes were domestic finds in the 1960s and 1970s. 'We are a credible player in the market, which I think is a major gain,' Mr Raha says.
ONGC has not met the most basic measure of an explorer's success: finding more oil than it pumps out. For three years in a row, the firm has failed to replace the reserves it produced. Its last major oil discovery was in 1974.
The company found new oil reserves equivalent to 43 % of the 26 million tonnes it produced in 2002/03, a ratio that fell to 24 % the next year before rising to 74 % in 2004/2005, official data show. Production was flat throughout.
It has added more gas to its reserves than it produced, but gas output itself declined 20 % over the same period.
Government officials say ONGC must boost its reserve-to-production ratio - the number of years its reserves will last with the current level of output - by improving its drilling technology and management practices.
'ONGC's ratio is 22 years. In some onland areas the ratio is 57 years. They are not producing optimally,' one official said.
After India's new government was formed in May, energy firms thought oil minister Mani Shankar Aiyar, a suave and articulate former diplomat, would guide them to global fortune.
He has yet to succeed, although it's not for a lack of trying after a practically non-stop travel schedule.
ONGC is still licking its wounds after being humbled by China's CNPC in the high-profile race to acquire PetroKazakhstan, which the Indian company says it lost narrowly.
To make matters worse ONGC lost a major offshore platform at Bombay High, India's largest oilfield, reducing the company's output by 123,000 barrels per day (bpd) after an errant rig crashed into the facility during the monsoon, setting it on fire.
It has since restored half that production. But the damage to its reputation as an operator may not be so easily repaired.
Adding insult to injury, New Delhi earlier this year ordered ONGC to help shoulder the burden of subsidised fuels, which pushed the country's biggest refiners into the red.
Oil firms complain that the government's policy - deemed not very pro-business and influenced by constraints of a political coalition - is impeding their overseas drive, but Mr Aiyar is not fazed by a few setbacks or just-missed opportunities.
Mr Aiyar has pushed for Indian and Chinese firms to cooperate, not compete, for overseas assets, but his efforts appear to have met with little interest in Beijing, where the oil majors are gaining ground abroad, despite some hiccups.
Back home, ONGC had also missed out on the country's biggest find in two decades, the Rajasthan field being developed by small British oil and gas explorer, Cairn Energy plc .
Yet ONGC's chairman is sanguine. 'We are not in a country like Saudi Arabia,' says Mr Raha. 'In India you don't expect oil every time you drill a hole.' - Reuters
External links
From Wikipedia, the Free Encyclopedia. Original article here. Support Wikipedia by contributing or donating.
All text is available under the terms of the GNU Free Documentation License See Wikipedia Copyrights for details.