New Delhi: August 14 every year is marked to observe the foundation day of India's public sector undertaking (Oil PSU) Oil and Natural Gas Corporation Limited (ONGC). The ONGC comes under the Ministry of Petroleum and Natural Gas.
History & Significance
During pre-independence, the Assam Oil Company in the North-Eastern and Attock Oil Company in the 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.
In 1955, the Centre decided to develop the oil and natural gas resources in the various regions of the country as part of public sector development. With this objective, an Oil and Natural Gas Directorate was set up in 1955 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.
Soon, after the formation of the Oil and Natural Gas Directorate, it became apparent that it would not be possible for the Directorate with limited financial and administrative powers to function efficiently. So, in August 1956, the Directorate was raised to the status of a commission with enhanced powers.
Thus, ONGC was founded on August 14, 1956, by the Government of India. It is the largest government-owned oil and gas explorer and producer in the country and produces around 70 per cent of India’s domestic production of crude oil and around 84 per cent of natural gas. ONGC is vertically integrated across the entire oil and gas industry. In November 2010, the Government of India conferred the Maharatna status to ONGC.
ONGC’s Exploration
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. Domestically, ONGC not only found new resources in Assam but also established a new oil province in the Cambay basin (Gujarat), while adding new petroliferous areas in the Assam-Arakan Fold Belt and East coast basins (both inland and offshore).
ONGC went offshore in the 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 five 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 competence in E&P activities at a globally competitive level.
Exploration Activity In the Last Three Years
As a part of exploration activity during the last three years and the current year, ONGC has acquired 3,743.71Line Kilometre (LKM) of two-dimensional (2D) and 30,417.91 Square Kilometre (SKM)of three-dimensional (3D) seismic data. It has drilled 276 exploratory wells, which established around172.54 Million Metric Tonne (MMT) of 2P (Proven and Probable) Oil Initially In-Place (OIIP) reserves with 46.58 MMT estimated ultimate recovery (EUR).
According to government data, as of April 1, 2024, ONGC has oil reserves in nine sedimentary basins which have a total 2P (Proven and Probable) reserves of 320.89 MMT. The ONGC has produced 19.545 MMT crude oil (including condensate) from their oil reserves in 2021-22, followed by 19.584 MMT in 2022-23, 19.471 MMT in 2023-24 and 4.883 MMT upto June this year.
Largest Crude Oil And Natural Gas Company
ONGC’s quest for energy goes deeper than setting new benchmarks in deep-water drilling in the Krishna Godavari Basin or finding new frontiers of energy. Global decline in crude prices notwithstanding, India has taken significant investment decisions diligently and aggressively, reversing the production trend offshore. And now ONGC is venturing into deeper offshore plays in the quest for energy security. It is this journey that has placed ONGC among Fortune "World's Most Admired Companies".
ONGC's Global Outreach
In the year 2002-03, after taking over MRPL from the A V Birla Group, ONGC diversified into the downstream sector. ONGC has also entered the global field through its subsidiary, ONGC Videsh Ltd. (OVL). ONGC has made major investments in Vietnam, Sakhalin, Columbia, Venezuela, Sudan, etc. and earned its first hydrocarbon overseas revenue from its investment in Vietnam.
CSR Activities
Oil & Gas Public Sector Undertakings (PSUs) undertake corporate social responsibility (CSR) activities under the heads identified under Schedule VII of the Companies Act, 2013 with a special focus on health (nutrition, sanitation, and drinking water), education, skill development, rural development, women empowerment, environment-oriented initiatives and care for the elderly & differently abled Persons.
The Board of the Company is empowered to plan, approve, execute, and monitor the CSR activities of the company based on the recommendations of its CSR committee.
In the financial year 2024, ONGC registered the highest-ever CSR expenditure of Rs 634 crore including the highest-ever expenditure of Rs 81 crore in the Company’s Aspirational Districts. ONGC has also been conferred with the “Social Changemaker Award (Oil & Gas)”.
Revenue Performance
In terms of financial performance, ONGC logged a gross revenue of Rs 1,38,402 crore in financial year 2024 against Rs 1,55,517 crore in financial year 23. The Company realised USD 80.77/bbl for crude sold in the domestic market in financial year 24, compared to USD 91.90/ bbl (financial year 23). During financial year 24, ONGC attained the highest-ever standalone Profit after Tax (PAT) of Rs 40,526 crore as against PAT of Rs 40,097 crore in the financial year 2023. At the group level, ONGC achieved an impressive revenue from operations of Rs 6,43,037 crore and the highest-ever profit after tax of Rs 57,101 crore.
