Contents

ABOUT THE COMPANY................................................................................................................................ 3

ONGC PERFORMANCE IN LAST TWO YEARS............................................................................................... 5
NEW VISION............................................................................................................................................... 8
ONGC : CHANGING WITH TIMES................................................................................................................. 8
PORTERS 5 FORCE MODEL....................................................................................................................... 14
Threat of new entrants:........................................................................................................................ 14
Bargaining Power of Suppliers:................................................................................................................ 15
Bargaining Power of Buyers:.................................................................................................................... 16
Threat of Substitutable Products:............................................................................................................. 16
Intensity of Rivalry among Competitors:.............................................................................................. 18
STP Analysis of ONGC.............................................................................................................................. 18
SWOT Analysis of ONGC.......................................................................................................................... 20
Strengths.............................................................................................................................................. 20
Weaknesses.......................................................................................................................................... 23
Opportunities........................................................................................................................................ 23
Threats................................................................................................................................................. 25
Corporate Social Responsibility................................................................................................................ 27
ONGC Videsh........................................................................................................................................... 28
Future prospects...................................................................................................................................... 28
References:.............................................................................................................................................. 31
 COMPANY ANALYSIS OF ONGC

ABOUT THE COMPANY

Oil and Natural Gas Corporation Limited (ONGC)

(incorporated on June 23, 1993) is an Indian public sector
petroleum company. It is a Fortune Global 500 company ranked
335th, and contributes 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. Indian government holds 74.14% equity stake in
this company.
ONGC is the flagship company of India; and making this possible
is a dedicated team of nearly 40,000 professionals who toil round
the clock. It is this toil which
amply reflects in the performance figures and aspirations of
ONGC. The company has adapted progressive policies in scientific
planning, acquisition, utilization, training and motivation of the
team. At ONGC everybody matters, every soul counts. Over
18,000 experienced and technically competent executives mostly
scientists and engineers from distinguished Universities /
Institutions of India and abroad form the core of our manpower.
They include geologists, geophysicists, geochemists, drilling
engineers, reservoir engineers, petroleum engineers, production
engineers, engineering & technical service providers, financial
and human resource experts, IT professionals and so on.

ONGC PERFORMANCE IN LAST TWO YEARS

theCompany has been the first and only Indian company to be
enlisted in Fortunes Most Admired Companies 2008. The Fortune
Global 500, 2008 list has ranked your Company at 335, 34
notches higher than the previous year.
The fiscal 2008-09 was yet another year of growth and success
for your Company, which along with other group companies,
excelled in all its endeavours; particularly in the core activity of
Exploration and Production (E&P) of Crude Oil and Natural Gas.
the Company maintained
a Reserve Replacement Ratio (RRR) of more than one, for the
fourth consecutive year. During the year, your Company
registered RRR at 1.32, with Ultimate reserve accretion (3P
reserves) of 63.82 Million Metric Tonnes (MMT) against production
of 48.28 MMT of Oil & Oil Equivalent
Gas (0+OEG).
ONGC has accreted 182.23 MMT of Initial In-place reserves, the
highest in last decade and 7% more than the last years accretion
of169.52 MMT, with 33 discoveries (Oil: 13, Gas: 20) spread
across Indian sedimentary basins against 22 discoveries during
2006-07. Exploratory performance during ensuing fiscal 2008-09
also started on a high note with 11 discoveries in the first quarter
of current fiscal.
During the year, O+OEG production of the Company, including
the production from domestic joint ventures and overseas assets,
was the highest-ever at 61.85 MMT, 1.84% more than the
previous year. ONGC maintained the O+OEG production level at
48.28 MMT, marginally (0.4%)
lower than last year, against the natural decline of mature fields.
However, the oil and gas production from overseas assets
increased by 10.7% and O+OEG production from domestic joint
ventures also increased by 11.2%.

The augmenting and enhancing efforts taken up by the Company,

through Improved Oil Recovery and Enhanced Oil Recovery
(IOR/EOR) schemes, implemented since 2001, have helped to
arrest production decline in the mature fields. Twelve IOR/ EOR
schemes have been completed and six projects are under
implementation with an investment of Rs. 85,630 million. Out of
the 165 marginal fields, 143 are either monetized or under
delineation or under monetization on service contract.
Remaining22 fields will be put on production by offer under new
marginal field policy. The new field Vasai East discovered in
Western Offshore has commenced production from 7th July, 2008.

ongc is setting up a 50 MW Wind Farm in Gujarat consisting of 34

wheeling units with an investment of Rs. 3,070 million. Power will
be utilized in nearby ONGC installations. All 34 units have been
erected, 10 have started wheeling power. The first CBM
development well for CBM was spudded in Parbatpur pilot area on
1st December, 2007 near Bokaro Steel City of Jharkhand;
production has commence from April 2009.
NEW VISION

GIVEN BY HON'BLE EX-PRESIDENT OF INDIA DR. APJ ABDUL

KALAM

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 wherever it is, to
meet the ever-growing demand of the country.

ONGC : CHANGING WITH TIMES

 ONGC is Indias Most Valuable Company, having a market capitalisation of
Rs. 1 trillion and continues to retain its position as the most valuable
company of India.
Was the biggest wealth creator for the period 1998-2003.(Rs. 226.3 billion)
Only Indian company to have earned a net profit of over 10,000 crore.
 Added 49.96 MMT of ultimate reserves and kept up the trend of positive
accretion for the third consecutive year.
ONGC has a vertically oriented organizational structure.
Is Asias best Oil & Gas company, as per a recent survey conducted by US-
based magazine Global Finance.
Ranks as the 2nd biggest E&P company (and 1st in terms of profits), as per
the Platts Energy Business Technology (EBT) Survey 2004
Ranks 24th among Global Energy Companies by Market Capitalization in
PFC Energy 50 (December 2004). [ONGC was ranked 17th till March 2004,
before the shares prices dropped marginally for external reasons.
Is placed at the top of all Indian Corporates listed in Forbes 400 Global
Corporates (rank 133rd) and Financial Times Global 500 (rank 326th), by
Market Capitalization.
Is recognized as the Most Valuable Indian Corporate, by Market
Capitalization, Net Worth and Net Profits, in current listings of Economic
Times 500 (4th time in a row), Business Today 500, Business Baron 500 and
Business Week.
Has created the highest-ever Market Value-Added (MVA) of Rs. 24,258
Crore and the fourth-highest Economic Value-Added (EVA) of Rs. 596
Crore, as assessed in the 5th Business Today-Stern Stewart study (April
2003), ahead of private sector leaders like Reliance and Infosys. ONGC is
the only Public Sector Enterprise to achieve a positive MVA as well as EVA.
Is targeting to have all its installations (offshore and onshore) accredited
(certified) by March 2005. This will make ONGC the only company in the
world in this regard.
Owns and operates more than 11000 kilometers of pipelines in India,
including nearly 3200 kilometers of sub-sea pipelines. No other company in
India operates even 50 per cent of this route length.
Crossed the landmark of earning Net Profit exceeding Rs.10,000 Crore, the
first to do so among all Indian Corporates, and a remarkable Net Profit to
Revenue ratio of 29.8 per cent. The growth in ONGC's profits is not solely
due to deregulation in crude prices in India, as deregulation has affected all
 the oil companies, upstream as well as downstream, but it is only ONGC
which has exhibited such a performance (of doubling turnover and profits).
Has paid the highest-ever dividend in the Indian corporate history.
Its 10 per cent equity sale (India's highest-ever equity offer) received
unprecedented Global Investor recognition. This was a landmark in Indian
equity market, establishing beyond doubt, the respect ONGC's professional
management commands among the global investor community. According to
a report published in 'The Asian Wall Street Journal (Hong Kong) , ONGC's
Public Issue brought in 20 Foreign Institutional Investors (FIls) to India, as
(it was reported), 'they could not ignore the company representing India's
energy security'.
The Market Capitalization of the ONGC Group (ONGC & MRPL)
constitutes 10 per cent of the total market capitalization on the Bombay
Stock Exchange (BSE). ONGC has an equity weightage of 5 per cent in
Sensex; 15 per cent in the Nifty (the only Indian corporate with a two-digit
presence there); ONGC commands a 7 per cent weightage in the Morgan
Stanley Capital International (MSCI) Index.
The growth in ONGC's Market Capitalization (from Rs. 18,500 Crore before
May 2001 to Rs. 1,25,000 Crore in January 2004) is unprecedented and
except Wipro (who had a higher market capitalization temporarily), no other
Indian company (either in public or private sector) has seen such a
phenomenal growth.
ONGC has come a long way from the day (a few years back) when India and
ONGC did not figure on the global oil and gas map. Today, ONGC Group
has 14 properties in 10 foreign countries. Going by the investments
(Committed: USD 2.708 billion, and Actual: USD 1.919 billion), ONGC is
the biggest Indian Multinational Corporation (MNC).
ONGC ended the sectoral regime in the Indian hydrocarbon industry and
benchmarked the globally- established integrated business model; it took up
71.6 per cent equity in the Mangalore Refinery & Petrochemicals Limited
(MRPL), and also took up a 23 per cent stake in the 364-km-long
Mangalore-Hasan-Bangalore product Pipeline, connecting the refinery to the
Karnataka hinterland. By turning around MRPL in 368 days, ONGC has set
 standards of public sector companies reviving joint (or private) sector
companies, proving that in business, professionalism matters, not ownership.

ONGC has announced the investment outlay of Rs 33,OOO crore for the
tenth five-year plan (2007). Rs13, 000 crore of this has been earmarked for
acquisition of oil equity abroad. It is putting its legacy systems on a common
SAP platform. It has also installed a virtual reality centre, Third Eye, at its
Mumbai office. In offshore areas, by infield drilling, it is reducing the well
spacings in order to draw out undrained oil between the existing wells. As the
parameters on which older wells were designed have changed, these wells are
being redesigned and revitalized.

In Tripura, ONGC already has 47 billion cubic metres (bcm) of in place gas
reserves. While the field has a capacity to produce 4.5 bcm gas per day it is
producing only 1.192 bcm for meeting the demand in the area. For the
balance, it has still has to find the solution to evacuating gas through the
difficult terrain to other parts of India. In deep waters, ONGC has 21
petroleum exploration licences, of which 12 have come on nomination basis
and the rest through NELP bids. In the IX plan it drilled five prospective wells.
Two of these have shown encouraging accumulation of hydrocarbons. It has
now prioritised four deep-water projects for drilling in Kutch, Kerala-Konkan,
Krishna-Godavary and Cauvery basins. It will be drilling in all 47 wells in
these basins. Overall, the drilling activity has risen sharply in recent years (see
chart). Meanwhile a sizable gas discovery has been made in Daman. Initial
estimates suggest reserves in the range of 30 to 50 million cubic feet. This
could grow as new exploratory data comes in.

However, the most exciting of recent developments in ONGC is its recent

acquisition of MRPL. This is being viewed by its avid observers as a first step
that Raha has taken towards making it an integrated oil company that is in line
with the global giants like Exxon Mobil or Shell. ONGC also has retail
marketing rights in areas where it operates. But, its progress in this domain also
hinges on whether or not it is allowed to bid for HPCL and BPCL. If the
government gives it the nod it may change from being simply an exploration
 and oil production company to a full-fledged oil major in no time.

PORTERS 5 FORCE MODEL

Threat of new entrants:

Due mostly to the industry that ONGC is in, its hard for there to
be many new entrants. The only real threat that might arise would
be another government funded Oil and Gas company. The reason
for this is that a government would not have as hard a time
raising funds and gaining access to resources. This is assuming
that the company would be researching and developing on
domestic soil. The only other threat may not be from new
entrants but from smaller competitors who already have access to
resources and distribution channels. There is really not much of a
threat because there are two main barriers to entry that would
be stopping potential threats. These would be very high capital
requirements as well as access to Cost disadvantages
independent of scale.

Even though this industry if very attractive because of the high

profits it would be very hard for a company to have enough
capital to get in the market. Every part of Oil and Gas Exploration
and Development is costly and not something that would be
worth the costs as a new entrant into the industry. Going along
with the high cost of capital are the cost disadvantages. The
companies already in the industry already have the access to raw
materials as well as desirable locations. This is something that
would be very difficult for a new entrant to try and gain.

Bargaining Power of Suppliers:

ONGC is a vertically integrated company that really deals in all
areas from finding the product to refining the product to selling
the product. With this being said there is not much to worry about
the bargaining power of the suppliers. Supplier power is high as
the net margins are strongly dependent on the price of the crude.
Due to crude price volatility and supply risks, a lot of the Indian
companies are integrating backwards into E&P activities

Bargaining Power of Buyers:

Not too critical for most companies as refining operations are a

part of the complete supply chain, with the refining operations
supplying the product to the marketing company. However in case
of standalone companies (which may no longer apply) long term
contracts have to be signed with the marketing companies. The
margins in such cases are dependent on such long term
contracts.
The industry that ONGC is a part of is different than many other
industries. It is different in the fact that people really cannot go
without their product. While over a long period of time it may be
possible to find other fuels it is not really feasible in the short
term. This has been seen in the US in the last few years. Gas
companies can keep the prices high and consumers will still pay
the high prices. When looking at the individual buyer they have
almost no bargaining power because they are only buying such an
extremely small portion of the industries total output. Another
reason for this lack of bargaining power is that as of right now
there is not a real alternative to Oil. All of these reasons make it
very hard for the buyer to have much bargaining power at all.
Threat of Substitutable Products:

Although gas, solar power etc exist as substitiutes , none of them

are big enough to impact the demand of the petroleum products.
As stated above there is not a real alternative to oil at this time.
There is research being done to try and find substitutes. With the
price of oil as high as it is at this time, it is only giving more
reason to try and find other fuel sources. This is where the main
players in this market must be careful. The prices are staying
fairly high now because people really dont have a choice and
must pay. If other fuel sources do come out that are less costly,
many people will go towards those alternatives. It does not seem
that at this time there is a huge threat of this happening but it is
definitely a possibility that any player in the market must be
aware of.

Intensity of Rivalry among Competitors:

The rivalry in the industry was low till as the industry was tighlty
regulated by the government. However, the level competition has
increased with Reliance and other MNC becoming more
aggressive.
The largest competitors in this industry for ONGC are Exxon
Mobile and Royal Dutch Shell. ONGC is currently in 14 different
companies whereas Exxon Mobile is in 20 different countries.
While Exxon may be a larger company now ONGC is growing and
is becoming a very important global player.

STP Analysis of ONGC

Segment
Corporates, countries, individuals looking to fulfill energy needs

Target Group
Enterprises looking for energy for production, people for petrol diesel for vehicles
and domestic uses
Positioning
ONGC is positioned as the future of India's energy

SWOT Analysis of ONGC

Strengths

1. State owned:
One of the biggest advantages & strength of the company is that it is state owned.
Thisled the company have great infrastructure with the governments support. The
policymaking also becomes easier due to the same reason. Moreover any undue
and sustained pressure creates due impact on the government as well.

2. Growing demographics
ONGC went to global fields through its subsidiary, ONGC Videsh Ltd. (OVL).
ONGChas made major investments in Vietnam, Sakhalin and Sudan and earned its
firsthydrocarbon revenue from its investment in Vietnam.

3. Top Technology
ONGC is the technological advancements that were implemented over the last few
years.The advancements were substantial and improved the company's ability to
extract thegreatest amount of oil and gas.

4. Hard Industry for Competitor to enter

The oil sector is an industry wherein not many competitors can enter owing to the
scaleand government intervention.
5. Strive to be environmentally friendly
The Company has in its guiding principles to cut down emission and become
naturefriendly in due course of time.
6. Strong Infrastructure
The company implemented some well needed improvements to the infrastructure
andcreated a strength for the company.

7. ONGC is Indias largest crude oil and natural gas producer

8. Strong brand name of ONGC company
9. High profit making and high revenues
10.Has over 30,000 employees in its workforce
11.ONGC produces about 30% of India's crude oil requirement
12.Contributes 70%+ of India's crude oil production and 80%+ of India's
natural gas production
13.Commemorative Coin set was released to mark 50 Years of ONGC
14.Strong advertising and branding of the company along with recognition
from several awards
15.Owned by the Govt of India, ONGC has got a strong financial backing
16. Employee management ::Treating employees like customers

Companies should have a similar approach to employees and customers. A

company shouldstrive to retain an employee in the same way it tries to retain
a customer.
ONGC is an organization which is a pride for the nation, the reason being its
excellence in its performance. The reason behind this is its strategies outside as
well as inside the organization.ONGC is a firm which knows how to deal with the
internal as well as the external environmentof its functioning.If we deeply look into
its smooth running work environment, then we would find the initiativesthis giant
corporation has taken for the well being of its people. ONGC is committed to its
valueand promise of creating a healthy work environment for its employees, which
facilitates their growth, builds up their confidence, and fosters in its employees a
sense of belonging as well as job satisfaction.A lot has already being done here at
ONGC, many are in process and much more is planned, for the valuable employees
of the renowned ONGC.
ONGC is a firm which believes that the non-financial benefits are as much
important as the financial ones, and hence has thoughtfully kept a balance between
both, as both are great motivating factors. Therefore, like any other employee
friendly organization, ONGC too has two types of motivating factors:-
-financial benefits
-non financial benefits.

Weaknesses

1. Being a government organization, slow bureaucratic decisions can

reduce efficiency
2. Intense competition means limited market share growth for ONGC
3. State-owned: Because of Huge govt. Of India control on ONGC many
important decisions are beingtaken by govt. of India and sometime it proved to be
fatal for example govt's poor decisions have come in way e.g. In case of APKO
oilfields acquisition , government blocked the deal which later went to Chinese
CNOOC. This resulted in loss of face of ONGC in international market.
4. Ever changing laws
The ever changing laws pose a big threat to the company. The Company is
bleeding dueto the rising crude oil prices in the international market but
the government has its own priorities.

Opportunities

1. Increasing fuel/oil prices means higher margins for ONG. Increasing natural gas
market ONGC can increase business by more oil well discoveries. Expand
global export market and have international tie-ups
New oil blocks in the Cuba & other Latin American Companies.
 2. Contribute 60 MMTPA by the year 2025 by using state of the art technology
and soliciting tenders in new regions to explore oil and gas.
3. Foray into retailing by launching OVL, fuel dispensing stations at Mangalore.
4. Tie up with SHELL Bitumen co. for manufacturing petroleum products in India.
5. Launched Mangalore SEZ to envisage an investment of 35000 cr.
6. Under the Mangalore SEZ plan it aims to build a Gasification plant, oil refinery,
development of part of the Mangalore port etc.
7. Foster tie ups with other Indian companies like GAIL, OIL etc. to jointly
explore and extract oil & gas in India & abroad.

Threats

1. Government regulations affect business of ONGC

2.High competition from Indian as well as global oil companies
3.Hybrid and electric cars in the market can reduce fuel consumption
4. Fluctuating crude oil prices can affect the business
5. The US-Iraq war has left the Iraq Block 8 exploration project in the lurch.
6. The dwindling petroleum reserves.
7. Faces stiff competition from other regional players like China National
Petroleum corp., Korea Gas corp., Daewoo Intnl. Corp. etc
8. As the world moves towards clean fuels or eco-friendly fuels there is a threat in
the long run to the oil business.
9. OVL has expertise over land based exploration and extraction of oil while
majority of the crude oil is deposited in the sedimentary layers deep beneath the
sea, hence technological expertise must be improved.

10. A latest threat has emerged from the proximity of the Russian Energy Ministry,
which controls the Yugansk oil fields, with the Chinese National Petroleum Corp.
meaning that OVL will suffer in terms of profit sharing.
11. The dictator style regimen in countries like Myanmar, Sudan & Libya and strict
government regulations in Iran can hamper the interest of the company in the
long run. Hence it is important that the government of India maintains cordial
relationship with these governments.

Corporate Social Responsibility

The mission of ONGC stated that the company would have an "abiding
commitment to health, safety, and environment to enrich quality of community
life."And this mission was reflected in its CSR activities. CSR at ONGC began as a
philanthropic activity where the company contributed to several socio-economic
developmental programs like building schools and hospitals, developing
agriculture and cottage industry, building infrastructure facilities, etc., around its
areas of operation on an ad hoc basis...

ONGC is spearheading the United Nations Global Compact - World's biggest

corporate citizenship initiative to bring Industry, UN bodies, NGOs, Civil societies
and corporate on the same platform.

During the year, your Company has undertaken various CSR projects at its work
centres and corporate level.

ONGC's CSR programs at the corporate level focused on disaster

relief management and water management projects.

ONGC and the Global Compact Program

The concept of 'global compact' was initiated by UN Secretary-General Kofi
Annan in July 2000. The idea was to form an international corporate citizenship
network for the advancement of universal social and environmental principles.
ONGC Videsh

ONGC Videsh Limited (OVL) is the international arm of ONGC. It was

rechristened on 15 June 1989. It currently has 14 oil and projects across 15
countries. It's share of oil and gas production was 8.753 MMT of O+OEG
in 2011-12 as against 0.253 MMT of O+OEG in 2002-03. OVLs overseas
cumulative investment has crossed USD 14 billion.
OVL currently has presence in 33 E&P projects in 15 countries, namely ;
Vietnam, Iraq, Libya, Syria, Sudan, South Sudan, Iran, Cuba, Brazil,
Venezuela, Russia, Myanmar, Colombia, Nigeria and Kazakhstan.

Some of the leading alliance partners of OVL are BP, CNPC, Ecopetrol, ENI,
Exxon, Statoil Hydro, PDVSA, Petrobras, Petronas , Petrovietnam, Repsol,
Rosneft, Shell, Sinopec, Total and TPOC.

Future prospects
ONGC has planned a Rs 77.5 billion revamp of onshore pipelines and
installations and approved a Rs 23.5 billion investment in Assam. It registered
five oil and gas discoveries on the East Coast and Northeast in May 2007. ONGC
aims to produce 25 million metric standard cubic meters per day of gas
from the Krishna Godavari basin by 2012-2013 from the estimated available 6
trillion cubic feet of gas reserves. It signed a feedstock supply agreement with
Brahmaptura Cracker and Polymer (BCPL) for the Assam gas cracker plant
being set up in Lepetkata, Dibrugarh and a memorandum of understanding
with British Pertoleum to jointly undertake oil and gas exploration and
production projects in India and abroad. An agreement with Hindustan
Petroleum Corporation (HPCL) enables its Tatipaka refinery and MRPL
(subsidiary) to supply petroleum products to HPCL.
References:

1. www.ongcindia.com
2. www.ongcreports.com
3. www.moneycontrol.com
4. Annual Reports of ONGC