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Particulars of its organisation, functions and duties

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THE COMPANY

HISTORY OF ONGC


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 Burmah 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 programmes 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.

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 inland 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 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.

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.

In the year 2002-03, after taking over MRPL from the A V Birla Group, ONGC diversified into the downstream sector. ONGC will soon be entering into the retailing business. ONGC has also entered the global field through its subsidiary, ONGC Videsh Ltd. (OVL). ONGC has made major investments in Vietnam, Sakhalin and Sudan and earned its first hydrocarbon revenue from its investment in Vietnam.

I. Particulars of organisation

a) Date of incorporation : 23.06.1993

b) Mode of incorporation: Oil & Natural Gas Commission (“Commission) was set up in pursuance of the resolution bearing number 22/29/55-ONG dated August 14, 1956 issued by the Ministry of Natural Resources and Scientific Research, Government of India . In October 1959, the Commission was converted into a Statutory Body pursuant to the Oil & Natural Gas Commission Act, 1959. Pursuant to the Oil & Natural Gas Commission Act (Transfer of Undertaking and Repeal) Act, 1993 (Notified on September 4, 1993 ), the undertaking of the Commission together with all its assets, movable and immovable properties, contracts, licenses and privileges stood vested in a Company registered under the Companies Act, 1956. The Company was incorporated on June 23, 1993 in order to facilitate the vesting of the undertaking of the statutory body to the Company pursuant to the enactment of the said Oil & Natural Gas Commission Act (Transfer of Undertaking and Repeal) Act, 1993. The Certificate of Commencement of Business was granted on August 10, 1993 .

c) Present Status A Government Company within the meaning of Section 617 of the Companies Act, 1956

d) Administrative Ministry: Ministry of Petroleum & Natural Gas, Government of India 2nd Floor, Shastri Bhawan Dr. R.P. Marg, New Delhi-110001

e)Share Capital i) Authorised : Rs. 15000.00 crore

ii) Issued and Subscribed : Rs. 2138.87 crore
iii) Paid Up : Rs. 2138.87 crore

f) Present Shareholding : The shareholding pattern as on 16 th March 2007 is as follows:

Name(%)

a) President of India - 74.13
b) Body Corporates - 10.49
c) FI Is / NRI/ FR/Resident Indivs -10.59
d) IFIs /Mutual Fund/Banks - 4.59
e) Resident Individuals. - 1.84
f) Others - 0.14

NOTE: Status of shareholding pattern changes every fortnight.

g) Listing with Stock: The Securities of the Company are presently Exchanges listed with the following stock exchanges:

i) Bombay Stock Exchange, Mumbai
ii) The National Stock Exchange of India Ltd, Mumbai The Company has the following ASSETS /PLANTS/ BASINS/ REGIONS/ INSTITUTES/ SERVICES:

A. ASSETS/ PLANTS:

1.Mumbai High Asset, Mumbai
2.Neelam & Heera Asset, Mumbai
3.Bassein & Satellite Asset, Mumbai
4.Uran Plant, Uran
5.Hazira Plant, Hazira
6.Ahmedabad Asset, Ahmedabad
7.Ankleshwar Asset, Mehsana
8.Mehsana Asset, Mehsana
9.Rajamundry Asset, Rajamundry
10. Karaikal Asset, Karaikal
11. Assam Asset, Nazira
12. Tripura Asset, Agartala

B. BASINS:

1. Western Offshore Basin, Mumbai
2.Western Onshore Basin Vadodara
3.KG Basin, Rajamundry
4.Cauvery Basin , Chennai
5.Assam & Assam-Arakan Basin , Jorhat
6.CBM- BPM Basin , Kolkata
7.Frontier Basin , Dehradun

C. REGIONS:

1.Mumbai Region, Mumbai
2. Western Region, Baroda
3. Eastern Region, Nazira
4. Southern Region, Chennai
5. Central Region, Kolkata

D. INSTITUTES:

1. Keshava Dev Malaviya Institute of Petroleum Exploration (KDMIPE), Dehradun
2. Institute of Drilling Technology (IDT), Dehradun
3. Institute of Reservoir Studies, Ahmedabad
4. Institute of Oil & Gas Production Technology, Navi Mumbai
5. Institute of Engineering & Ocean Technology, Navi Mumbai
6. Geo- data Processing & Interpretation Center (GEOPIC), Dehradun
7. ONGC Academy , Dehradun
8. Institute of Petroleum Safety, Health & Environment Management, Goa .
9. Institute of Biotechnology & Geotectonics Studies, Jorhat
10. School of Maintenance Practices, Vadodara
11. Regional Training Institutes, Navi Mumbai, Chennai, Sivasagar & Vadodara.

E.SERVICES:

1. Chief Drilling Services, Mumbai
2. Chief Well Services, Mumbai
3. Chief Geo- Physical Services, Dehradun
4. Chief Logging Services, Baroda
5. Chief Engineering Services, Mumbai
6. Chief Offshore Logistics, Mumbai
7. Chief Technical Services, Mumbai
8. Chief Info-com Services, New Delhi
9. Chief Corporate Planning, New Delhi
10. Chief Human Resource Development, Dehradun
11. Chief Employee Relations, Dehradun
12. Chief Security, Dehradun
13. Company Secretary, New Delhi
14. Chief Marketing, New Delhi
15. Chief Corporate Affairs &Co-ordination, New Delhi
16. Chief Corporate Communication, New Delhi
17. Chief Material Management, Dehradun
18. Chief Technical Services, Dehradun
19. Chief Health, Safety & Environment, Mumbai
20. Chief Legal, New Delhi
21. Chief Medical, Dehradun
22. Chief Internal audit, New Delhi
23. Chief Commercial, New Delhi
24. Chief Exploration & Development, Dehradun

II Functions & Duties

Oil And Natural Gas Corporation has been established to carry out the objectives specified in the Memorandum & Articles of Association of the Company. The main objectives are:

1.To acquire whole or any part of the undertaking, business, the assets/liabilities, rights, obligations, power, goodwill, privileges, functions and associated establishment of whatever nature of the Oil & Natural Gas Commission [Established under the Oil & Natural Gas Commission Act (No. 43 of 1959)] and for that purpose carry into and carry into effect such agreements, contracts, arrangements as may become necessary.

2. To plan, promote, organize and implement programmes for the development of Petroleum Resources and the Production and Sale of Petroleum and Petroleum Products produced by it and for all matters connected therewith.

3. To plan, promote, organize exploit and implement programmes for the efficient development of petroleum and petroleum products and alternate resources of energy, and the production, distribution, conservation and sale of Petroleum and other products/services produced by it and for all the matters connected therewith.

4. To carry out exploration and to develop and optimise production of hydrocarbons and to maximise the contribution to the economy of the country. To carry out geological, geophysical or any other kind of surveys for exploration of petroleum resources; to carry out drilling and other prospecting operations; to probe and estimate the reserve of petroleum resources; to undertake, encourage and promote such other activities as may lead to the establishment of such reserves including geological, chemical, scientific and other investigations.

5. To search for, purchase, take on lease or license, obtain concession or otherwise acquire any estate or interest in, develop the resources of work, dispose off or otherwise turn to account, land or sea or any other place in whole of India or in any other part of the world containing or likely to contain, petroleum, petroleum resources or alternative sources of energy or other oils in any form, asphalt, bitumen or similar substances or natural gas, chemicals or any substances used, or which is thought likely to be useful for any purpose for which petroleum or any oils in any form, asphalt, bitumen or similar substances or natural gas is, or could be used or to that end to organise, equip or employ expeditions, commissions, experts and other agents and to sink wells, to make boring and otherwise to search for, obtain, exploit, develop, render suitable for trade, petroleum, other mineral oils, natural gas, asphalt, or other similar substances or product thereof.

6. To undertake, assist, encourage or swap or promote the production of petroleum resources and to carry on in all their respective branches all or any of the business of producing, treating, (including the redefining of crude oil) storing, transportation, importing, exporting, swapping and generally dealing in or with, petroleum or other crude oils, asphalt, bitumen, natural gas, refinery gasses, liquefied petroleum gas and all other kind of petroleum products, chemicals and any such substances aforesaid.

7. To carry on all marketing and distribution of all kinds of petroleum products and to purchase or otherwise acquire manufacture, refine, treat, reduce, distil, blend purify and pump, store, hold transport, use, experiment with market distribute, exchange, supply, sell or otherwise dispose of, import, export and trade and generally deal in any and all kinds of petroleum products, oil, gas and other volatile substances.

8. To carry on all or any of the businesses of the sale and purchase of petroleum and other crude oil, asphalt, bitumen, natural gas, liquefied petroleum gas, chemicals and all kinds of petroleum products, treat and turn to account in any manner whatsoever petroleum and other crude oils, asphalt, bitumen, natural gas, liquefied petroleum gas and all kinds of petroleum products, chemicals and any such substance as aforesaid.

9. To establish, provide, maintain and perform scientific, technical, engineering, project management, consulting/contacting services including but without limiting to technical studies, design, construction, maintenance, repair all kinds of works and buildings, procurement, inspection expediting, management of construction and related services for petroleum reservoir, storage and transportation of oil, gas and other minerals by pipeline in or otherwise, seismic data acquisition, interpretation, logging, drilling, cementing, other oil fields related equipment.

10. To promote, organise, or carry on the business of consultancy services in any field of activity in which the Company is engaged in or connected therewith.

It is a duty of ONGC to do its business operation within the objectives specified in the Memorandum & Articles of Association in a most fair and transparent manner. It is also a duty of ONGC to protect interest of its stakeholders as well as to maximize the wealth of the shareholders. ONGC is committed to achieve its goals as enshrined in the Vision & Mission Statement of the Company, which is enumerated below:
OUR VISION

To be a world-class Oil and Gas Company integrated in energy business with dominant Indian leadership and global presence.

OUR NEW VISION

GIVEN BY HON'BLE 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.”

STRATEGIC VISION: 2001-2020

Focusing on core business of E&P, ONGC has set strategic objectives of :

• Doubling reserves (i.e. accreting 6 billion tonnes of O+OEG) by 2020; out of this 4 billion tonnes are targeted from the Deep-waters.
• Improving average recovery from 28 per cent to 40 per cent.
• Tie-up 20 MMTPA of equity Hydrocarbon from abroad.
• The focus of management will be to monetise the assets as well as to assetise the money.

OUR MISSION

World Class

• Dedicated to excellence by leveraging competitive advantages in R&D and technology with involved people.
• Imbibe high standards of business ethics and organizational values.
• Abiding commitment to safety, health and environment to enrich quality of community life.
• Foster a culture of trust, openness and mutual concern to make working a stimulating and challenging experience for our people.
• Strive for customer delight through quality products and services.

Integrated In Energy Business

• Focus on domestic and international oil and gas exploration and production business opportunities.
• Provide value linkages in other sectors of energy business.
• Create growth opportunities and maximize shareholder value.

Dominant Indian Leadership
• Retain dominant position in Indian petroleum sector and enhance India's energy availability.

ONGC GROUP COMPANIES

The ONGC Group of Companies comprises of –

   
1.
ONGC Videsh Limited (OVL) : OVL is the wholly own subsidiary of ONGC which has been mandated to carry out international E&P business operations of the parent company.
 
 
2.

Mangalore Refinery and Petrochemicals Limited (MRPL) : This is a 71.60% subsidiary of ONGC. It is the only other listed company besides parent ONGC within the ONGC group.

 
 
3.
ONGC Nile Ganga BV (ONG BV) : This is the wholly owned subsidiary of ONGC Videsh Limited which, in turn, is 100% owned by ONGC. The company was incorporated in Netherlands and has 25% participating interest in the Greater Nile Oil Project in Sudan producing crude oil from on-shore blocks earmarked for the purpose.
 
 
4.

ONGC Mittal Energy Limted (OMEL) : This is the joint venture between ONGC Videsh Limited and Mittal Investments Sarl in the ratio of 49.98% : 48.02% with SBI Capital holding the remaining 2%. This joint venture aims to source equity oil and gas from abroad for securing India's energy independence.

 
 
5.

ONGC Mittal Energy Services Limited (OMESL) : This is the joint venture between ONGC Videsh Limited and Mittal Investments Sarl with the same ownership structure as that of OMEL. This joint venture will be involved in trading and shipping of oil and gas (including LNG) sourced by OMEL from abroad.

 
 
6.

ONGC Tripura Power Company Pvt.Ltd. (OTPCL) : ONGC has embarked upon a project for generation of power with 750 MW gas based closed-cycle power plant. The project is being developed by a SPV between IL&FS, Government of Tripura and ONGC with an equity share of 50%, 24% and 26% respectively. The project is estimated to cost around Rs 3800 Crores and is expected to be commissioned during the first quarter of 2008.

 
 
7.

Kakinada Refinery & Petrochemicals Limited (KRPL) : This is a public private joint venture company formed pursuant to an MOU between MRPL, Kakinada Seaport Limited(KSPL), IL&FS and AP Government, to set up an export-oriented refinery of 7.5 MMTPA capacity at Kakinada in coastal Andhra Pradesh which is envisaged to be integrated with bio-diesel facility.

 
 
8.
Kakinada SEZ Limited : In tune with the recent initiatives of Ministry of Commerce and Industry, Govt.of India, for declaring Special Economic Zones (SEZs) to boos industrial growth in the country, ONGC/MRPL has become co-promotor under public-private partnership to form this joint venture company and it is envistaged that KRPL and other gas infrastructure units will be located within the Kakinada SEZ to liverage financial initiatives and to bolster economic growth.
 
 
9.

Mangalore SEZ Limited : With a view to providing synergy with MRPL, large petroleum and petrochemicals based projects are envisaged to be developed at Mangalore. With view to optimizing the capital cost during the construction of the project and subsequently promoting sale of petrochemical intermediates, a decision was taken to associate with a special economic zone (SEZ) Contemplated for development at Mangalore. The SEZ will be an SPV with Karnataka Industrial Areas Development Board (KIEDB), Karnataka Chambers of Commerce and Industry (KCCL) and ONGC between them bringing in 49% equity with ONGC contributing 26%. IL & FS has offered to take the remaining 51% equity. This SPV is in the process of being incorporated.

 
 
10.

Dahej SEZ Limited : ONGC participating in the initiative of Govt. of Gujarat has formed a joint venture company under public private partnership to establish and develop necessary infrastructure facilities within a land of 1740 hectares in cooperation with Gujarat Industrial Development Corporation. ONGC is currently engaged in implementing its C2-C3 extraction project, which will be located within this SEZ.

 
 
11.

Rajasthan Refinery Limited (RRL) : With the recent discovery of waxy oil in Mangla and other adjoining structure by Cairn Energy India, its PSC partner in Rajashtan Block, MRPL has been nominated by Govt. of India as its nominee for buying the crude oil to be produced from this block. MRPL, in coordination with Cairn Energy, and as per due facilitation by Rajasthan Govt., has proposed to form a joint venture company named Rajasthan Refinery Limited (RRL), which will examine the techno-economic viability of establishing a well-head refinery of 7.5 MMPPA Capacity and if found feasible will implement the same at a suitable location in Rajasthan.