A PROJECT REPORT ON

“STUDY OF PROCESS FOR MARKETING OF NATURAL
GAS IN ONGC”

A project report submitted towards partial fulfillment of requirement of two year full time PGDM program of Institute for Technology and Management WARANGAL

SUBMITTED TO:Mr. A.K. SRIVASTAVA GM- Marketing, ONGC, Vadodara. SUBMITTED BY:Ashish Kapoor Roll No:- 08

ITM, WARANGAL

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC

CERTIFICATE
This is to certify that the project entitled “Study of Process for Marketing of Natural Gas in ONGC”, which is submitted by Mr. Ashish Kapoor in partial fulfillment of the requirement for the award of Post Graduate Warangal Diploma Institute in of Management Management degree to (Warangal),

during the academic year 2008-10 has been carried out by him under my supervision and guidance. The project is the result of the candidate’s genuine work on the topic and is accordance with the requirement of the institution.

Prof. Rashid, Warangal Institute of Management,

2 ITM, WARANGAL

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC

Warangal.

DECLARATION
I hereby, declare that this project work entitled “Study of Process for Marketing of Natural Gas in ONGC” with reference to ONGC is a genuine work done by me, and all information collected is authentic to the best of my knowledge. The work done by others referred has been properly acknowledged.

AshishKapoor Warangal Institute for Technology and Management Warangal
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STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC

4 ITM, WARANGAL

Vadodara). The co-operation is much indeed appreciated. I. Besides. Not forget. Dayakara Rao for allowing me to do my internship in ONGC. Vadodara). Malik (Summer Training Coordinator ONGC) who gave me the opportunity to work in such an esteemed organization. Srivastava (GM – Marketing. The special thank goes to my helpful supervisor. Marketing Department. I am very much thankful to our honorable director Dr. Last but not the least.D. My grateful thanks also go to my guide Mr.K. the internship program also helped me realize the various marketing aspects of the organization and the working of the organization. ONGC. The supervision and support that he gave truly help the progression and smoothness of the internship program. A big contribution and hard worked from him during the two months is very great indeed. T. WARANGAL . All knowledge during the program would be nothing without the enthusiasm and imagination from him. However. Thanking you. ONGC. Mr A. Ashish Kapoor 5 ITM. great appreciation go to Mr. I’m thankful to my Parents and Almighty. Satyan Kumar (Chief Engineer. no project is possible without the guidance and the help extended by the experts to the students with the sole benevolent purpose of intellectual development to generate a feeling of profound respect for them.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC ACKNOWLEDGEMENT Every project is a synthesis of knowledge & experience of students and experts in the related field.

e. ONGC. Show me. Knowing the importance of such practical training our esteemed Management Institute arranges 2 months internship programme. Towards this aim. I will never do. but it becomes more important as to how we apply those concepts in practice. I was lucky to work with prestigious firm i. Our own objective should be “learn through experience”. Ashish Kapoor ITM. I will learn. WARANGAL . the practical exposure is a basic requirement for being aware of industrial practices and its relevance with theory. As a management student our aim should not be only to learn theoretical concept in the classroom.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC PREFACE Tell me. Involve me. I will forgive. Vadodara.. The report reflects the knowledge and insight gained while working at ONGC. Warangal 6 ITM.

PRODUCT PROFILE 20% The information regarding the product i. General Overview about ONGC’s regional office at Vadodara.About ONGC as an organization. Natural gas is to be given. WARANGAL . The information of the product would be mentioned on the basis of following aspects:• Introduction 7 ITM. B. INTRODUCTION COMPANY PROFILE:.ENERGY SCENERIO:• Indian Energy Scenario • World Energy Scenario 15% 2.e. INDUSTRY STRUCTURE:C. CORPORATE STRUCTURE:D.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Sub :.Study of Process for Marketing of Natural SYNOPSIS Gas in ONGC TITLE WEIGHTAGE 1. ORGANISATION STRUCTURE:E. A.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC

• Fundamentals of Natural Gas • Sources of Natural Gas

3. UNIVERSAL MARKETING PROCESS
A background on the marketing process followed throughout including:• • • • Situation Analysis Marketing Strategy Marketing Mix Decisions Implementation And Control

15%

4. MARKETING PROCESS FOR NATURAL GAS
Process carried out by ONGC:• • • • Identification of the market Study of the product market Level of competition Costing of the product:- pricing policy, government regulation • Procedure of allocation:- sales contract, negotiation, contract administration, credit policy.
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20%

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC

5. COMPARING THE MARKETING PROCESS OF ONGC WITH OTHER MARKETING PLAYERS:Oil:- Cairn Energy, Reliance, Oil Gas:- GAIL

15%

6. SWOT ANALYSIS OF THE MARKETING PROCESS IN ONGC
a). Threats b). Government Regulations c). External Factors

15%

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STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC

INDEX
SR. NO TOPIC PAGE NO.

1.

BACKGROUND

10

2.

PRODUCT PROFILE

25

3.

UNIVERSAL MARKETING PROCESS

34

4.

MARKETING PROCESS FOR NATURAL GAS COMPARING THE MARKETING PROCESS PREVALENT IN ONGC WITH OTHER MARKETING PLAYERS SWOT ANALYSIS

39

5.

50

6.

62

7.

BIBLIOGRAPHY

67

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STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC

BACKGROUND

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In these 50 years. Significant changes in the functioning and scope of activities of the organization have taken place. ONGC. ONGC has entered the Golden Jubilee year on August 14. COMPANY PROFILE 1. is one of the leading enterprise in the country with significant contribution in its industrial and economic growth. Born in a modest corporate house within serene Himalayan settings more than 45 years ago in 1956 as commission. is repositioning itself to foster the principle of relational enterprise through partnerships/strategic alliances/joint ventures with preferred partners and adopt a business strategy which relies on company skills and positional assets with focus on core business areas and opportunity specific diversification. A Navratna Public Sector Enterprise. Introduction:Oil and natural gas corporation limited(ONGC). As the Most Valuable Corporate of the country. ONGC today. 12 ITM. ONGC has grown today into a full-fledged horizontally integrated upstream petroleum company with in-house service capabilities and infrastructure in the entire range of oil and gas exploration and production and related activities. WARANGAL .STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC A. the logo has been redesigned so as to reflect the changes while keeping the linkages. is its self-reliance and development of core competence an E&P activities at a globally competitive level. it has transformed from a Directorate to a Commission to a Corporation. 2005.

• Posted a net profit of Rs.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC 2. WARANGAL . by emerging as the most valuable company of the nation. ONGC has accelerated huge amount of oil-equivalent gas from domestic and foreign acreages. 167. the Highest by any Indian Company. The cumulative crude production by ONGC till date exceeds 633 MMT. apart from it they have also produced 326 BCM of natural gas so far. ONGC’s role in the national economy is going to be significantly enhanced as the projected CARG(cumulative annual rate of growth) of its products is four times that of developed countries average.016 billion. 13 ITM. in terms of market capitalization as well as in terms of net worth. Financials:ONGC occupies the numero uno slot among the corporate of the country. 3. Fuelling the economy:To fuel the increasing energy requirements of this developing country.

4.5% equity. The remaining 50% equity will behad been offered to strategic partners. ONGC-JVG is responsible for identification and developing of following new businesses:- a. PETRONET LNG LIMITED is in place with ONGC having 12.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC • Net worth Rs. WARANGAL .EXCOM Group:The EXPLORATION CONTRACT MONITORING (EXCOM) Group is the exclusive business face of ONGC for jointly operated oil & gas exploration and production ventures 14 ITM. • Practically Zero Debt Corporate. Joint Venture Group:ONGC has recognized the need to expand its business through profitable ventures related to petroleum and energy sectors by entering into joint ventures with other Indian and foreign companies. ONGC-Joint venture group (ONGC-JVG) has been formed to give impetus to joint venture activities in areas other than E&P. The company is planning to install two LNG terminals (Dahej in Gujarat and Cochin in Kerala) on western coast of India. b. 699 billion.5% equity interest for import and marketing of LNG in India. financial institutions and public.LNG Import and Marketing:A joint venture company. Other partners in this venture are IOC. GAIL and BPCL each with 12.

iv. Evaluation and negotiation of bids pertaining to exploration acreages and development of discovered fields under joint venture. Providing opportunities to companies for assessment of prospectively of Indian basins and investment decisions through its New Delhi office. 15 ITM. of production sharing contracts (PCSC) and joint operation agreements (JOA) with parties to the contracts. Strategic / Business Alliances:ONGC is engaged in E&P activities both in onshore and offshore. optimization of field development plan field recovery and other allied areas of services sector. marginal field development. It’s functions include:- i. exploration in frontier basins. It is the nodal agency of ONGC for single window E&P business communication with companies and the government. We intend to achieve this objective through alliances and sustained relationship.e. 5. WARANGAL . iii. Monitoring and co-ordination. ii. Engagement in these areas will require best-in-class technology. The corporation is now venturing out to new areas i. deepwater exploration and drilling. processes and practices and savvy use of the R&D assets to their fullest advantage. ONGC is looking towards companies / services providers established in the industry for technology transfer and absorption and technological collaboration and support. Negotiation.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC within India.

Mission and Vision:• To be a world-class oil and gas company integrated in energy business with dominant Indian leadership and global presence. as per platts 250 Global Energy Companies for the year 2008. • • • • • 7.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC 6.  It is the only company from India in the Fortune Magazine’s list of the World’s Most Admired Companies 2007. health and environment to Enrich Quality of community life. as per a recent survey conducted by US-based magazine ‘Global Finance’. Imbibe high standards of business ethics and organizational value. Focus on domestic and international oil and gas exploration and Production business opportunities. Global Ranking: Ranks as the Numero Uno Oil & Gas Exploration & Production (E&P) company in the world. WARANGAL .  Is Asia’s best oil and gas company. World class dedicated to excellence by leveraging competitive advantage in R&D and technology with involved people. Abiding commitment to safety. 16 ITM. Strive for customer delight through quality products & services.  Ranks 20th among the Global publicity-listed Energy Companies as per ‘PFC Energy 50’ (Jan 2008).

and a remarkable Net Profit to revenue ratio 29.  Crossed the landmark of earning Net Profit exceeding Rs. WARANGAL .  Its 10% equity sale (India’s highest-ever equity offer) received unprecedented Global Investor recognition. 10.  Has paid the highest ever dividend in the Indian corporate history. Net Worth and Net Profits. they could not ignore the company representing India’s energy security. According to a report published in ‘The Asian Wall Street Journal’.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC  Ranks 24th among Global Energy companies by Market Capitalization in PFC Energy 50 (December 2005) Is recognized as the Most Valuable Indian Corporate. the respect ONGC’s professional management commands among the global investor community.  Owns and operates more than 11000 kilometers of pipelines in India. This was a landmark in Indian equity market. ONGC’s public issue brought in 20 foreign institutional investors (FII’s) to India. the first to do among all Indian corporate. Has created the highest-ever Market Value-Added (MVA) and the fourth-highest Economic Value-Added (EVA) as assessed in the 5th Business Today Stren Stewart study. No other company in India operates even 50 percent of this route length. by Market Capitalization.    ONGC is the only public sector company in India to achieve a positive MVA as well as EVA. 17 ITM.000 crore. establishing beyond doubt.8 percent. including nearly 3200 kilometers of sub-sea pipelines. is current listings of Economic Times 500(4th in a row). ahead of private sectors leaders like Reliance and Infosys.

3.  Rs.  Rs. G-4 in KG Offshore and NMT in Western Offshore.000 crore will be invested to put up two petrochemical plants.500 crore investment in an LNG regasification terminal at Mangalore. New Discoveries:ONGC made six new discoveries-East Lakhibari in Assam. Going by the investments ONGC is the biggest Indian multinational corporation.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC  The growth in ONGC’s Market Capitalization is unprecedented and except WIPRO no other Indian company has seen such a phenomenal growth.  To setup LNG supplies at Qatar to 7.  To develop 53 offshore marginal fields. The reserve accretion during the year was 49. WARANGAL .5 mtpa. Sitarampuram in Krishna Godavari Onland. Degam in Cambay. 9.  To ship LNG and crude oil from overseas fields is also in the pipeline. Dahej (1000MW) and Ennore (1500MW).  To set up three LNG-based mega power projects at Mangalore (1500 MW). 8.  ONGC group has 14 properties in 10 foreign countries. Sonamuri in Tripura. Plans Ahead: To become a $50 billion company in 5 years.22 million metric tonne 18 ITM. 10.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC of oil equivalent (both domestic and overseas).  Basin headquarters of the western region.  Regional office. Vadodara.01 million metric tonne of oil equivalent. All this has added to the company’s growth momentum. It used to be the hub of activities for the whole of Western Region Business Group till a few years back. the powers and responsibilities have been transferred to the respective assets. 10.The Location:- ONGC’s Western Regional office is at Vadodara. After the reorganization of the whole set up of ONGC under its Corporate Rejuvenation Campaign. 19 ITM. ONGC. Gujarat. WARANGAL . Vadodara is now home to the following offices and workshops of ONGC. During the last three years ONGC added 384.

INDUSTRY STRUCTURE:- 20 ITM.  Central repairing workshop – looks after the maintenance and repair of the vehicles and rigs of the western region. maintenance. departments of the basin and the regional office. WARANGAL .  School of maintenance practices  Logistic department  Finance. personnel.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC  Regional geophysics laboratories – provides geophysical services to the western region exploration group.  Infocom section for the western region – provide infocom services to the western region.  Regional training institute.  Kasturba Gandhi health center – provides medical services to the employees and their families including retired employees. B.  Well services of western region – looks after the well services. legal. marketing etc.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC PRODUCT PORTFOLIO No need of marketing.: LPG. C. Naphtha etc. because we need to import crude oil. CORPORATE STRUCTURE:21 ITM. while the capacity is of 70. WeONGC could only produce 26-30 million tons. Here marketing is relevant.g. E. WARANGAL .80 million tons.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC 22 ITM. WARANGAL .

R S Sharma Chairman & Managing Director/Director (Finance) 23 ITM.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC D. WARANGAL . ORGANISATION STRUCTURE:- Mr.

dung. and residue for their energy requirements. India now ranks third among the coal-producing countries in the world.00 tons in 1950 and by early 1970’s production had increased to more than 8 million tons. The share of commercial fuels in the total energy supply in India has risen from 41% to approximately to 75%. south of Pondicherry). INDIAN ENERGY SCENARIO:- India is relatively well endowed with both exhaustible and renewable energy resources.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC A. Oil The early oil fields discovered in India were of modest size. Over the years. despite the dominance of the traditional fuels in the energy sector in India. WARANGAL . Now lets have a categorical analysis of the forms of energy. Despite the increasing share of the commercial fields in the energy mix. it has been possible to raise the production of coal from a negligible level to noticeable level. India has thirty five major fields onshore (primarily in Assam and Gujarat) and four major offshore oil fields (near Mumbai. The government has 24 ITM. Coal. oil and natural gas are the three primary commercial sources of energy.39 billion tones of proven coal reserves accounting for 8.6% of the world’s total. non-commercial fuels still hold importance in the energy portfolio. 1. there has been a significant change in the pattern of supply and consumption of energy. Through a sustained programme of investment and greater thrust on application of modern technologies. accounting for nearly 50% of the total supplies. Coal Coal has been the most important component of India’s energy matrix for a long time. Oil production in India amounted to 200. More than 60% of the Indian households still depend on traditional sources of energy like fuelwood. India holds 84.

India is investing heavily in the infrastructure required to support increased use of natural gas. a consortium including CMS Energy and Unocal. Qatar and Oman that would run under the Arabian Sea to one or more west coast terminals.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC sanctioned ambitious exploration plans to raise production in line with demand and to exploit new discoveries as rapidly as possible. Cairn Energy also reported natural gas finds in late 2002 offshore from Andhra Pradesh and Gujarat. and payment problems at the Enron-backed Dabhol Power Plant in Maharashtra led many to question the financial viability of some of the LNG import projects. Reforms currently being undertaken in the electric power sector may eventually change this situation. but it was never considered likely that all would be built in the near future. These LNG projects were cancelled largely in response to the Indian government’s decision not to extend sovereign payment guarantees to power projects which were to have among the import terminal’s largest customers. Most of India’s current natural gas production takes place in the Mumbai High basin and the state of Gujarat. Deregulation has been 25 ITM. as their combined capacity would have exceeded even the most optimistic demand projections. India’s Foreign Investment Promotion Board(FIPB) had approved 12 prospective LNG import terminal projects in the mid-to-late 1990’s. which is currently set by the government. Natural gas Indian gas consumption of natural gas has risen faster than any other fuel in recent years. firms backing several other LNG projects pulled out of India in the second half of 2001. Given India’s dependency on Persian Gulf resources. proposals were made to develop pipelines from Iran. A major development in December 2002 was the announcement by Reliance Industries of its discovery of a large amount of natural gas in the Krishna-Godavari Basin offshore from Andhra Pradesh along India’s southeast coast. India’s government has been considering reforms in its natural gas pricing mechanism. Dhaksin Bharat Energy. India’s need for oil and petroleum-based products about 40 million tons per year-far exceeded its domestic production capabilities of 28 million tons per year in the early 1990’s. also announced the cancellation of its planned LNG project at Enron. The Indian government froze approvals of the new LNG terminals in 2001. WARANGAL . In the wake of the problems with Dabhol.

although only North America. With the shortage of natural gas and willingness of some customers to pay more.2%. Natural Gas World natural gas consumption grew by an above-average 3.9%. China again accounted for half of global energy consumption growth. 2. rising by 230.7% in 2006. Global oil production fell by 0. Global oil consumption grew by 1. Consumption in the oil-exporting regions of the Middle East. Oil Crude oil averaged $72. EU energy consumption declined by 2. Consumption growth was robust in oil-exporting countries.000 b/d. the first decline since 2002. WARANGAL .000 b/d in 2007. WORLD ENERGY SCENARIO:Energy Developments World primary energy consumption increased by 2. slightly below the 10-year average. deregulation would likely lead to higher prices if implemented.1% in 2007.1% in 2007. The US accounted for nearly half of the world’s gas 26 ITM. World primary energy consumption increased by 2.000 b/d due to the cumulative impact of production cuts implemented in November 2006 and February 2007. Oil production growth outside OPEC remained weak. Much of this growth was in refined products.1% in 2007.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC delayed several times.2%. Indian consumption grew by 6. or 1 million barrels per day. International trade in crude oil and refined products rose despite OPEC production cuts and rising domestic consumption in oil-exporting countries. with Germany registering the world’s largest largest decline in energy consumption. the third largest volumetric increment after the China and the US. rising by an above-average 5%. a reflection of imbalances and constraints in the world’s refining system.4% in 2007 –down from 2. and buyers of natural gas from private sources such as the LNG terminal at Dahej pay prices much higher than those purchasing from the state-owned suppliers.39 per barrel in 2007.8%. Asia Pacific and Africa recorded aboveaverage regional growth. The Asia-Pacific region accounted for two-thirds of global energy consumption growth. Global oil consumption grew by 1. South and Central America and Africa accounted for twothirds of the world’s growth. or 130. even though consumption in Japan declined by 0. an increase 0f 11%.4% in 2007. OPEC production dropped by 350.

5%.3%.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC consumption growth. proved world natural gas reserves. China & Qatar recorded the second and third-largest increments to production. Gas production rose by 2. Consumption of natural gas worldwide is envisioned to increase from 100 trillion cubic feet in 2004 to 163 trillion cubic feet in 2030 in the IEO2007. Chinese consumption grew by 19. WARANGAL . Natural gas remains a key fuel in the electric power and industrial sectors.9% and accounted for the second-largest increment to global gas consumption.4% & 17. EU production declined by 6. less than half the 10-year average. 2007. and as more governments begin implementing national or regional plans to reduce carbon dioxide emissions. the world’s largest volumetric decline for a second consecutive year. world natural gas reserves have. as 27 ITM. the projected increase in natural gas consumption is second only to coal. increasing by 18.9% respectively. Historically. they may encourage the use of natural gas to displace liquids and coal. driven by cold winter weather and strong demand for gas in power generation. Natural gas accounted for nearly all the growth in US energy consumption. As of January 1. US gas consumption increase in 2007 is 6. for the most part. As natural gas burns more cleanly than coal or petroleum products. By energy source.4% in 2007.5%. International trade in natural gas weak again in 2007. growing by 2.4%. trended upward. with UK output falling by 9.

00 World 35. Fuel-wise Energy Consumption in 2006 (%) Fuel Oil Natural Gas Coal Hydro Nuclear Total India 28. The largest revision to natural gas reserve estimates were reported for Kazakhstan. Russia.33 05.94 100.01 00. 2007. WARANGAL .00 28 ITM.67 28. Almost three-quarters of the world’s natural gas reserves are located in the Middle East and Eurasia. Turkmenistan.41 06. Of the new natural gas resources expected to be added through 2025.76 23. Worldwide undiscovered natural gas is estimated at 4136 trillion cubic feet.84 100.42 08.45 56. reserve growth accounts for 2347 trillion cubic feet. were estimated at 6.17 06.183 trillion cubic feet. Iran. & China. and Qatar combined accounted for about 58% of the world’s natural gas reserves as of January 1.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC reported by Oil & Gas Journal.

WARANGAL .STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC PRODUCT PROFILE 29 ITM.

Natural gas definitions do not include components heavier than hexadecane (C16H34) that are produced and found as liquid or solid waxy compounds. A wide variety of distinctly different hydrocarbon compounds. WARANGAL . each with a different proportion of these two main elements. As a strict definition. plus impurities. Hydrocarbons with more carbon molecules are liquid at standard conditions but may exist in gaseous phase in the reservoir. the lighter the compound. Pentane (C5H12) begins the series that includes condensates. NATURAL GAS Natural gas. 30 ITM.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC I. is encompassed within the general terms natural gas and crude oil. and butane (C4H10). natural gas consists of hydrocarbons that remain in the gas phase (not condensable into liquids) at 20°C and atmospheric pressure. The lower the number of carbon molecules. Coal is usually found in the solid phase and contains even longer chains of carbon molecules. hydrocarbons are made up of the elements hydrogen and carbon. These may be considered compounds in the crude oil family. ethane (C2H6). and coal are collectively known as hydrocarbons. and the more likely the hydrocarbon will be found in the gaseous phase. This effectively limits the definition to components with four or fewer carbon molecules: methane (C1H4). conditions considered to be standard temperature and pressure (STP). A more practical definition of natural gas (see figure below) includes the C5+ components that are produced with natural gas. Also called petroleum compounds. they are more likely to be found in liquid phase. propane (C3H8). Crude oils contain longer chains of carbon molecules and are heavier than gas. crude oil.

transported. Natural gas liquids (NGLs) include components that remain gaseous at both reservoir and surface conditions. Condensates are lowdensity liquid mixtures of pentanes and other heavier hydrocarbons. All of these impurities. Natural gas can also contain non hydrocarbon components such as carbon dioxide (CO2). especially the first two. CO2 and H2S. and marketed in pressurized containers. This gas usually produces hydrocarbon liquids during production. hydrogen sulfide (H2S). Methane may also be converted to liquid fuels through gas-to-liquids (GTL) processes. gases with low levels of H2S are termed sweet gases and can be directly sold to consumers. propane. must be removed from the natural gas stream prior to sale. Methane is the main component of natural gas that power stations and industrial and residential users consume. Conversely. helium. hydrogen. if any. and butane. Gas containing less than 95% methane and more than 5% of heavier hydrocarbon molecules (ethane. WARANGAL . Liquefied petroleum gas (LPG) refers specifically to propane and butane when they are stored. These include ethane. Gases with high levels of H2S are also called sour gas. 31 ITM.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Methane is the main component of natural gas. If gas contains more than 95% methane. liquids when brought to the surface. usually accounting for 70%–90% of the total volume produced. LNG is the liquid product produced by cooling methane to –161. and components that exist with the gas in the reservoir but become liquid on the surface. Sour gases usually require treatment to remove sulfur prior to sale. and butane) is sometimes called rich gas or wet gas. and it will produce few. Methane is the most common component transported by pipelines and converted to liquefied natural gas (LNG).5°C. referring to the sour smell of sulfur. it is sometimes termed dry or lean gas. nitrogen. and argon. such as condensates and natural gasoline. propane.

The C2. etc. WARANGAL . Ethane. C3 (Propane). propane. From marketing 32 ITM. Constituents of Natural Gas:The composition of natural gas. the gas is known as ‘lean gas’. the formation. All the hydrocarbon components of natural gas can be used as fuel for power plants and as fuel for other industries and domestic purposes. which can exist in gaseous form in ambient pressure and temperature. Propane.C3 components are used as feedstock in petrochemicals industry. C2 (Ethane).STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC II. It is a complex mixture of hydrocarbons normally consisting of Methane. the gas is known as ‘rich gas’ and after extraction of the heavier hydrocarbon (the balance being C1&C2). FUNDAMENTALS OF NATURAL GAS Natural gas is a gaseous fossil fuel consisting primarily of methane but including significant quantities of ethane. varies widely depending on the field. Butane and heavier hydrocarbons. Its components are normally called by the number of carbon atoms in the component molecule as C1 (Methane). The C1 (Methane) component is used as feedstock for fertilizer industry. Methane is the major constituent of natural gas. Prior to the separation of heavier hydrocarbon components (C3+). or the reservoir from which it is produced. pentane and higher hydrocarbons as well as carbon dioxide. The other heavy hydrocarbon components are used as solvents and feedstock for various other chemical industries. The C3 & C4 fractions of natural gas are extracted in 1:1 weight ratio to make Liquefied Petroleum Gas (LPG). in gas fields (as free or non-associated gas) and in coal beds(as coal bed methane). butane. as produced from the earth. It is found in oil fields in either dissolved or isolated conditions (as associated gas). nitrogen and hydrogen sulphide.

C3. C4. the natural gas is more compact occupying 1/600th of its gaseous volume. This compares to a volume reduction by a factor of around 80 for Compressed Natural Gas (CNG) at 80 bar and normal temperatures. Once liquefied. solids and/or other contaminants that would interfere with pipeline transportation or marketing of the gas. C5 and heavier fractions is greater when they are used for the production of LPG. 33 ITM. the value added to the C2. WARANGAL . Natural gas is processed to separate those non-methane hydrocarbon fraction to store. In addition to gas conditioning and liquids production. both economically and technically. miscible floods.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC viewpoint. Natural gas. can be cost effectively transported from far off gas fields to the user markets. Most of the carbon dioxide in natural gas is removed to prevent corrosion and can be injected into crude oil reservoirs for enhanced oil recovery. it is important to remember that while all fractions of the rich gas can be as such used by fertilizer and power plants as feedstock or fuel. Liquefied Natural Gas (LNG):LNG is natural gas reduced to a liquid state by cooling it to 161 C. Natural Gas Processing:- All natural gas is processed in some manner to remove unwanted water vapour. transport and market them in liquid states that have higher value as separate products. in the recovery of crude oil through reservoir pressure maintenance. gas processing performs vital functions. in liquid state.

SOURCES OF NATURAL GAS:- Gas Reserves:Total proven reserves of natural gas in India.2007. It is lighter than air and therefore safer as in case of leakage it does not tend to accumulate and settle down. shorter generation period and have shorter start-up time to cater to peak load of power requirement. It contains low sulphur making it ideal fuel for transportation purpose. as of 01. 34 ITM. are estimated at about 1. There is no storage needed at the user’s end which means that they can productively use the space and not worry about running out of stored fuel.055 BCM. III. Merits & Advantages of Natural Gas:- Natural Gas is clean fuel offering higher thermal efficiencies and better feedstock for fertilizers.04. which is a mere half per cent of total gas reserves worldwide. WARANGAL . Consumers are billed for the fuel that actually enters their premises unlike in all other fuels where they are billed for the quantity that has gone out of the supplier premises.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC LNG is transported in special ocean going tankers and brought to the receiving shore based regasification terminal and transported through a pipeline to consumers. Gas turbine power plants have lower capital cost.

ii. iv. Domestic Supply:The country witnessed a boom between 1980 & 1996 when natural gas production grew almost ten times from 2. iii. WARANGAL . India’s reserves are likely to last only around 30 years against 67 years worldwide. Offshore reserves account for nearly 70 percent with onshore contributing to the remaining 30 per cent of India’s proven gas reserves.64 35 ITM.36 BCM to 22. Gas Supply:The gas supply scenario in India could be studied under the following five categories of supply:- i. Domestic Supply The LNG Option Trans border pipelines CBM Gas Other Supply Sources i.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC At the current production level. v.

GSPC & ONGC have made significant gas discoveries in Krishna Godavari Basin. Projected Production of Natural Gas during the 11th Five Year Plan (2007-12) All figures in MMSCMD Company ONGC OIL 200708 60. WARANGAL . it is also 36 ITM. ii.38 8. The LNG Option LNG is the most immediate source of gas supply. The Reliance discovery.82 150.99 8. which made it discovery in September 2005 is expected to bring gas to the market by 2011-12.58 151.78 132.55 Production Around 70% of India’s gas production comes from offshore fields. is expected to bring about 40 MMSCMD of gas to the market in early 2009.8 201112 60.55 8.2 173.22 JV/Pvt.58 200809 61.27 9. which was made in 2002. LNG is the most secure option under certain geo-political situations.79 61.Cos 23.73 8.75 103. with onshore fields contributing the remaining 30%. Reliance.27 BCM in 2007-08.99 78.42 Total 92.9 80.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC BCM.3 2009-10 62. The key onshore gas producing regions in India are Gujarat. GSPC.86 2010-11 62. Andra Pradesh & the North East.25 BCM in 1996-97 to 32. Gas production witnessed a more sedate growth from 23.

iv. The CBM development. The DGH is the nodal agency for the regulation and development of CBM in India. WARANGAL . CBM Gas Coal Bed Methane (CBM) gas is a natural gas found in association with coal. The Iran-Pakistan-India pipeline project seems to be moving ahead the fastest.5 MTPA Dabhol LNG Terminal is expected to be operational by 2009-10. India’s proximity to the Middle-East and to the South-East Asia has made LNG a ‘considered’ or ‘preferred’ gas import option because of the perceived high political risks associated with piped gas options.5 MTPA LNG terminal at Hazira. extraction and processing are more capital intensive than the conventional gas business chiefly due to low yield per well. The policy allows the developer to sell the CBM 37 ITM. Besides the 5 MTPA Dahej LNG terminal and the 2. the 2. projects such as Iran-Pakistan-India pipeline. which are already optional. There have been three rounds of bidding under the national CBM policy framed in 1997. iii. the Myanmar-India pipeline & the Turkmenistan-Afghanistan-PakistanIndia pipeline are receiving the highest attention from their respective governments.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC viable if the distance between the producing nation and the user nation is over 1000 km. A fourth LNG Terminal at Kochi which can be expanded to 5 MTPA is being implemented by PLL and is expected to be commissioned by 2010-11. Cross-border Pipelines In India.

48 7.21 201011 2.05 8.07 5.76 10. of area is currently under the exploration and the total reserves in these blocks are estimated to be 1.14 1.14 3.82 0. A third of this quantity is to be produced by ONGC and the rest by private sector or JV firms. Other Supply Sources Apart from the above. Maharashtra. Chhattisgarh.62 201112 2. km. About 13.35 MMSCMD. th v.374 BCM with a product potential of 38 MMSCMD.81 Total 9.06 28.44 1. other supply sources include gas hydrates and underground coal gasification.45 200910 2.600 sq.26 200809 2. About 26 CBM blocks have been awarded in three rounds so far. West Bengal.35 Planning Commission’s report of the sub group on natural gas for the 11 five year plan estimates that CBM production during the 11th plan period could be 28. Madhya Pradesh.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC within India to customers on purely commercial principles and the market determined prices. Gujarat & Andra Pradesh. These blocks are located in Jharkhand.31 3.29 19. WARANGAL .14 5. Proposed CBM production during11th Plan (MMSCMD) ONGC Private/JV Total 200708 0. As there is no appropriate 38 ITM. Rajasthan.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC commercial proven technology for production of gas from gas hydrates therefore this source is highly unlikely to fructify in the near future. ONGC has plans to produce 2. WARANGAL .7 MMSCMD of gas through UCG process. UNIVERSAL MARKETING PROCESS 39 ITM. As for the underground coal gasification (UCG).

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC UNIVERSAL MARKETING PROCESS Under the marketing concept. The process of doing so can be modeled in a sequence of steps: the situation is analyzed to identify opportunities. the firm must find a way to discover unfulfilled customer needs and brings to market products that satisfy those needs. the plan is implemented and the results are monitored. tactical decisions are made. WARANGAL . the strategy is formulated for a value proposition. The Marketing Process Situation Analysis Marketing Strategy Marketing Mix Decision 40 ITM.

the firm must understand its own capabilities and the environment in which it is operating. In addition to indentifying the customer needs.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Implementation & Control I. 41 ITM. and micro-environmental factors closely related to the specific situation of the firm. The external environment can be described in terms of macro-environmental factors that broadly affect many firms. WARANGAL . The situation analysis thus can be viewed in terms an analysis of the external environment and an internal analysis of the firm itself. Situation Analysis:- A thorough analysis of the situation in which the firm finds it serves as the basis for identifying opportunities to satisfy unfulfilled customer needs.

WARANGAL .STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC The situation analysis should include past. collaborators. opportunities. then there may be opportunities to introduce products to better satisfy those consumers. present. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them. the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition. A PEST analysis can be used as the “climate” portion of the 5 C framework. II. the other four cover aspects of the external situation. competitors. • PEST Analysis:. If the situation analysis reveals gaps between what consumers want and what currently is offered to them. the situation analysis should yield a summary of problems and opportunities. From this summary. and technological factors. and threats.strengths. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exist. Marketing Strategy:42 ITM. economic.Company. Company represents the internal situation.for the internal and external situation. climate. • SWOT Analysis:. societal. weaknesses. There are several frameworks that can be used to add structure to the situation analysis: • 5C Analysis:. It should include a history outlining how the situation evolved to its present state and an analysis of trends in order to forecast where it is going.for macro-environmental political. Hence. and future aspects. customers.

Pricing. a strategic plan for pursuing the opportunity can be developed.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Once the best opportunity to satisfy unfulfilled customer needs is identified. Market research will provide specific market information that will permit the firm to select the target market segment and optimally position the offering within that segment. The marketing strategy then involves: • Segmentation • Targeting(target market selection) • Positioning the product within the target market • Value proposition to the target market. The 4 P’s can be more easily analyzed by the following representation:Product – Solution Promotion – Information Price – Value 43 ITM. III. The result is a value proposition to the target market. which a marketer can use to craft a marketing plan. This include the:4 P Analyses-Product. These four elements are often referred to as the marketing mix. Place. Promotion. WARANGAL . Marketing Mix Decisions: Detailed tactical decisions then are made for the controllable parameters of the marketing mix.

Often. WARANGAL . small changes in consumer wants can address by changing the advertising message.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Place – Access IV. As the changes become more significant. the marketing mix can be adjusted to accommodate the changes. The marketing process does not end with implementation – continual monitoring and adaptation is needed to fulfill customer needs consistently over the long-term. a product redesign or an entirely new product may be needed. As the market changes. Given that few environments are static. the marketing plan has been developed and the product has been launched. the results of the marketing effort should be monitored closely. Implementation and Control:At this point in the process. 44 ITM.

WARANGAL .STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC MARKETING PROCESS FOR NATURAL GAS 45 ITM.

this is the same case with ONGC. Now the process that is followed here is as follows:- 1. ONGC as a company has various process of marketing. The production party determines the products that are found inside the earth and accordingly they are further marketed. But as we say the eyes are very small part of a body but there importance is much more than its size. In this part I am trying to explain the same fact.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Marketing Process that is followed in ONGC :There are certain things which are common but how it is followed individually is different. though this department is very small. Identification of the product :- In this part the product that were mentioned earlier are identified through technical process and thus further action is take the products are divided according to the demand of the product. WARANGAL . 46 ITM.

negotiation. Even the smaller companies are threatening ONGC. Procedure of allocation sales contract (GSA & COSA). Since ONGC is a government embedded company that deals in oil and gas so it has to follow the global price as well as the government set price through NELP. These are the various facts that are to be considered. Direct competitors are a large external pressure for ONGC. ONGC has to work according to particular norms. Exxon Mobile CP. Study of the product market :- When you have competitors like reliance and various global competitors.2 billion takeover of PetroKazakhstan and the billion Ecuador oilfield sale by North American producer EnCana. WARANGAL . Costing of the product :- Pricing policy. credit policy. The oil & gas industry is a very intense industry.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC 2. 47 ITM. Possibly the biggest and most formidable that ONGC has faced has been the China National Petroleum Corporation. This is not just for ONGC though. Level of competition :- ONGC faces competition that can be matched with the competition in FMCG sector. These are huge players and one that ONGC is very far from competing with. contract administration. ONGC already faced fierce competition and lost to CNPC twice in 2005for bids in oil fields. in case of ONGC they also need to take into consideration the government rules & regulations and then take action. It has to direct the competition from the global arena as well as the domestic field. They lost in the $4. Some major competitors in the oil & gas industry are Chevron Corp. So in such a case you need to study the product market deeply and find out various rules that are to be followed. government regulation. 3. Total. BP PLC & Petrochina CO ADS. 4.

WARANGAL . are also planning city gas distribution projects across the country. Most of this infrastructure is concentrated in western & north western India.  Gas Demand The demand for natural gas continues to outpace supply. GAIL & Reliance. In Gujarat. Uttar Pradesh.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC  Gas Transportation:The existing gas transportation infrastructure in India can handle transmission / distribution of about 140 MMSCMD. Assam Gas Company has an additional network of 560 km of trunk pipelines and 1150 km of distribution pipelines. Haryana & Delhi. It facilitates the bringing of gas onshore from the western offshore fields & its transmission to end users. besides GAIL’s network. In Assam. there is the ambitious national grid being developed by GAIL. The largest cross-country transmission system is the HBJ trunk pipeline system (2700 km long) which runs through Gujarat. among others. A 23 MMSCMD capacity pipeline connecting Dahej to Vijapur (610 km) has also been completed. Gujarat Gas has a pipeline system of 116 km of transmission lines and 1800 km of distribution lines. In addition. The first major consumption surge during 1985 to 1995 coincided with the formation of GAIL and the laying of the HBJ 48 ITM. Gas retail companies such as Indrapastha Gas and Mahanagar Gas have their pipeline networks. Madhya Pradesh. Rajasthan.

IFFCO. GVK Power & Infrastructure and Spectrum Power Generation. The two biggest natural gas customer segments in India are power plants and fertilizer producers. WARANGAL . textiles and glass industries. The biggest customers in this category include. IPCL. With increasing gas supply from private and JV parties as well as LNG companies. National Fertilizers Limited. Other key customers include. Industrial users are mainly from the sponge iron. Maharashtra State Electricity Board. Andhra Pradesh and Maharashtra including Mumbai. city gas (CNG/PNG). petrochemicals. located along the HVJ pipeline and in Tamil Nadu. Ispat Steel. government has done away with allocations except for the public sector fertilizer and power industries. LPG / Other Liquid Hydrocarbons and sponge iron / steel sector.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC pipeline. This is followed by other segments – petrochemicals. The customers in the fertilizer segment are urea producers with nitrogen based plants. Essar Steel. The demand from the power segment comes from gas fired power plants. NTPC is the biggest consumer. Usha and Maruti Udyog. Gujarat Powergen Energy Corporation. 49 ITM. Major industrial customers include. Oswal Fertilizers.

WARANGAL .STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC 50 ITM.

WARANGAL .STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC 51 ITM.

In 2006-07. Details of producing locations are given below:- Mumbai High Asset Western Offshore Neelam & Heera Asset Bassein & Satellite Asset Ahmedabad Asset Mehsana Asset Ankleshwar Asset Rajasthan.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC GAS PRODUCING REGIONS IN ONGC:- ONGC is the largest natural gas producer in India. ONGC’s natural gas production was about 77% of the total gas produced in the country. Western Onshore Basin Western on shore Region 52 ITM. Natural gas is produced by ONGC both at offshore and onshore locations in India. WARANGAL . The major production is in the offshore (about 74% in 2006-07).

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Eastern Region Assam Asset Tripura Asset Southern Region Rajahmundry Asset DECISION FLOW DIAGRAM FOR SALE OF GAS Information of gas availability Due vetting from IRS & profile confirmation for quantity. WARANGAL IRS confirms 53 the profile . pressure & duration ITM.

GSPCL.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC NO YES Market Survey for probable consumers including DM and Institutional buyers like GAIL. WARANGAL . YES Finalise allocation to the consumer as per ONGC policy NO Get approval for the consumer/price Negotiate and sign GSA with the Consumer Get approval for calling tenders for finalizing the consumer and follow approved terms & conditions Issue allocation letter to the selected consumer and construct CTP and start supply 54 ITM.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Gas Processing The type and extent of natural gas processing depend on the original gas composition and the specifications of the consumer. as per figure below. butane. and they may have to be removed prior to transportation or further processing. Most produced gas must be treated before the consumer can use it. These plants range from relatively simple plants. Petrochemical and other consumers often buy NGLs directly from the gas producer. various hydrocarbon compounds are separated from the gas stream and large quantities of gas. Liquids recovery. CO2. and water are removed from the produced gas. water. NGLs—ethane. Pipelines. often specify the composition of the feed gas to maintain pipeline flow and reduce corrosion. which may transport NGLs to them by ship or dedicated pipelines. liquids. CO2 and H2S are highly corrosive compounds. and condensates— that can be recovered as liquids on the surface are often removed from the natural gas stream and sold separately. to complex plants. propane. Customers demand that gas delivered to them meets certain compositional and pressure specifications. Produced field gas may be processed to remove solids (such as sand). Pipeline transport. where oil. impurities (if present). Gas processing is necessary for the following reasons: • • • Sales gas specifications. 55 ITM.000 gas processing plants operating around the world as of mid-2006. and water are handled. and there were nearly 2. WARANGAL . In the latter. especially those that aggregate gas from multiple gas fields. and H2S. or both.

production will eventually cease from the reservoir. Water. Field development plans incorporate reservoir models derived from all available reservoir information. The figures below show a typical onshore and offshore field development. An offshore platform may have a large number of slots. In this case. must be removed to prevent corrosion. leaving 60%–80% of the original hydrocarbons—both oil and gas—in place. A simple oil and gas reservoir may initially produce high volumes of oil relative to gas. 56 ITM. Gas Production Gas production methodology is a function of the type of gas reservoir and the production stage in the life of the particular reservoir.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC • LNG (and GTL) feedstock specifications. WARANGAL . LNG plants have rigid and tight specifications for their feed gas. and without secondary production methods. using the natural gas pressure to increase oil recovery rates. reservoir pressure may be too low for natural production. Any impurities in the gas. the total recovery factor could be as low as 20%–40%. The main difference between the two developments is that offshore development wells are usually tied to a fixed platform with a set number of slots or well bores. Reservoir management may dictate producing oil first. gas producers selling to LNG plants will be required to pretreat all feed gas to the LNG plants. will seriously impact their LNG production. an increasing amount of gas may be produced. As the GOR increases. CO2. but as the oil production and reservoir pressure decline. This increases the gas/oil ratio (GOR) of the produced hydrocarbons. especially water. draining a specific portion of the reservoir. Petroleum engineers use these models to plan the location of field development wells. and heavier hydrocarbons. Thus. which is often produced with natural gas. each leading to a well deviating away from the platform.

Frame 1 shows the drilling pipe with the drill bit penetrating virgin rock. and a smaller diameter casing is inserted and cemented in the newly drilled section. The sequence is shown below. After drilling to a certain depth. This process is repeated (in 57 ITM. the drill pipe and bit are removed. Drilling mud. indicated by arrows. cools the drilling bit. Frame 2 shows a smaller drill bit drilling beyond the depth of the initial casing. and casing pipe is inserted into the well and cemented in place.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Drilling The process of drilling a gas well is quite easy to understand. and maintains hydrostatic pressure in the well bore. the drill pipe is removed. preventing reservoir fluid from rising to the surface. is pumped inside the drill pipe. WARANGAL . At a deeper point. Drilling mud allows rock cuttings to be brought to surface.

58 ITM. Smaller pipes. are usually inserted in the well bore to channel the flow of hydrocarbons from the subsurface to the surface valves and pipelines. WARANGAL . At that point. the well is perforated to allow reservoir fluids to enter the well bore.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Frame 3) with a smaller drilling bit and smaller casing diameter until the desired reservoir depth is reached. called tubing.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC COMPARING THE MARKETING PROCESS PREVALENT IN 59 ITM. WARANGAL .

jpg" \* MERGEFORMATINET CAIRN ENERGY 60 ITM.org/logos/cairn. WARANGAL .com/images? q=tbn:mWZdESzFAdnoaM:http://www.google.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC ONGC WITH OTHER MARKETING PLAYERS INCLUDEPICTURE "http://tbn1.petrofed.

000 barrels of oil equivalent per day on behalf of Cairn and its joint venture (JV) partners. The company operates the largest producing oil fields in the Indian private sector and has pioneered the use of cutting-edge technology to extend production life. Two of these are currently producing hydrocarbons. Cairn India has maintained a low operating cost base through efficient operations. Three of the fields – Ravva. Cairn India sells its oil to four major refineries across India and its gas to both public and private sectors. WARANGAL . Exploration More than 30 Hydrocarbon discoveries: • Onshore • Shallow Offshore • Deep Offshore 61 ITM. Lakshmi & Gauri – are already producing more than 80. Part of its strategy. the Company’s has focused on life-cycle planning & continuous monitoring & control of operational costs as well as applying innovative operating concepts & technologies.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Cairn India is the fourth largest oil & gas exploration & production company in India and has a working interest in 14 blocks. 11 platforms. 200 km of sub-sea pipelines & operations spanning the Indian continent. Cairn India has two processing plants. as well as in regions & basins where the current data set can be optimized or reinterpreted. Cairn India is focused on creating shareholder value by developing its world class resource base in Rajasthan and seeks to continue with its track record of exploration success. Cairn India’s portfolio is fostered in both mature & frontier areas.

com/images? q=tbn:CTj02vDXw47PuM:http://www. now producing over 50000 bopd. • Mangala FDP approved within 30 months from discovery.wikinvest.000 bopd field in 26 months. Production • Operates the largest producing field in Indian Private Sector • Combined field direct opex of Ravva & Cambay is $1/boe • Pioneered use of cutting edge technologies to extend production life. INCLUDEPICTURE "http://tbn0.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Development Fast-track development • Lakshmi gas field discovery in May 2000 and first gas by October 2002.gif" \* MERGEFORMATINET 62 ITM.com/images/f/ff/RIL.google. WARANGAL . • Ravva developed from a 3. Sales • Gas sales contract with public and private buyers • Oil sales to four major refineries across India • Efficient sales management of $1 bn gross annual revenue in 2006.700 bopd field to 35.

and realizing value across the entire energy chain. Reliance’s oil and gas exploration and production business is therefore inexorably linked with the national imperative. while fulfilling important national priorities.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC RELIANCE INDUSTRIES LIMITED RIL is the largest Oil & Gas acreage holder among the private sector companies in India with 33 domestic exploration blocks covering an area of about 337. RIL is India’s first private sector company in the Exploration and Production (E&P) sector to have discovered large gas reserves.000 sq.google. the initial link in the energy and materials value chain. The E&P strategy of RIL is aimed at further enhancing the level of vertical integration in its energy business.000 sq.cleanairnet. remains a major growth area and Reliance envisions evolving as a global energy major. km. Exploration and production of oil and gas is critical for India’s energy security and economic growth.gif" \* MERGEFORMATINET 63 ITM. RIL also has 5 coal bed methane (CBM) blocks covering an area of about 4.com/images? q=tbn:wV81op9tK49BHM:http://www. This is in addition to its interest in three exploration blocks in Yemen.000 sq. INCLUDEPICTURE "http://tbn1.org/baq2004/1527/articles- 59070_GAIL. WARANGAL . Exploration and production. two each in Oman and Columbia and one each in East Timor and Australia covering an area of about 38. km. km.

For GAIL. integrating all aspects of the Natural Gas value chain (including Exploration & Production. The reserves contained in existing contracted fields were fast depleting. is India’s flagship Natural Gas company. Distribution and Marketing) and its related services. midstream and downstream national gas distribution. The writing was on the wall that we had to find new sources. Every cloud has a silver lining and every adversity hides an opportunity. liberalization meant competition in our core business i. therefore. saw the launch of GAIL’s Exploration & Production (E&P) unit. Processing. in its maiden international E&P venture. Ina a rapidly changing scenario. As the Indian Economy opened up around the year 2000. NELP rounds were targeted.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC GAIL (INDIA) LIMITED GAIL (India) Limited. GAIL also clinched a chunk of the much sought after A-1 block in Myanmar. the business environment changed dramatically. 64 ITM. there were other compelling reasons for GAIL to get into E&P:• Integration in supply-chain • Large gap in Gas demand and supply • National Gas security • Balancing of Business portfolio • Global opportunity August 2001. and we won 12 blocks under four NELP rounds. Initially. GAIL is also expanding its business to become a player in the International Market. Apart from securing sources for Natural Gas. GAIL’s Exploration and Production (E&P) unit was born in just such a scenario. Transmission. LNG terminals and other cross border gas sourcing points. WARANGAL . No longer could we rely on statutory support mandating secured sources of Natural Gas for GAIL. we are spearheading the move to a new era of clean fuel industrialization.e. creating a quadrilateral of green energy corridors that connect major consumption centers in India with major gas fields.

65 ITM. We are also acquiring international acreages and actively pursuing various international E&P opportunities.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC The year 2004 placed GAIL firmly on India’s E&P map. with the dual strike of gas in Myanmar and oil in Cambay. WARANGAL .

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC INCLUDEPICTURE "http://tbn3.google. OIL also possesses 2D and 3D seismic data acquisition capabilities. WARANGAL . with excellent support services ranging from satellite navigation systems to remote blasting units.org/oil_india_logo.com/images? q=tbn:CslLGap7Tv2kVM:http://www. OIL owns a vast array of advanced computing systems and experienced personnel to process and interpret geo-scientific data through integrated 66 ITM.cconnection.jpg" \* MERGEFORMATINET OIL INDIA LIMITED OIL’s systematic and scientific approach to exploration has been rewarded with a high success ratio of 65% of exploratory wells drilled.

This produced an uproar and the mergers we set aside. BPCL. Sequence Stratigraphy. Basin Analysis etc. Source Rock Evaluation. ONGC had been starting to move downstream and diversify its business by going into 67 ITM. ONGC is state-owned but this does not mean that the GoI is good for ONGC or doing things in the best interest of ONGC right now. To minimize land acquisition time. Biostratigraphy. which has achieved a peak performance level of over 20. Seismic Attribute Analysis. and Oil India with IOC were the GoI’s ideas. which has resulted in protection of green belts surrounding OIL’s operational areas. Structural and Stratigraphic Interpretation. Petrophysics.000 m/rig year.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC exploration applications such as Remote Sensing. The proposed mergers of HPCL. ONGC is also being made by the GoI to focus on the exploration and production (E&P) of oil and gas. WARANGAL . OIL has resorted to cluster well drilling to develop its oil and gas fields. Analysis Political Environment The political environment in India is one of a federal republic. with ONGC. but not without the GoI stating that the government will have to restrict the respective companies to their core businesses. OIL’s all round excellence in performance is attributed in part to efficient well drilling by the rig building team and proper maintenance of equipment at the company’s well equipped Workshop.

India is a part of the B. it is seemingly making E&P core rigidity for the company.I. When ONGC started they had multiply protection policies in place that kept them safe from global competition.R. WARANGAL . India and China. which stands for Brazil. As the years went by. the GoI deregulated the industry and took away the state protection policy that kept ONGC safe.. With the GoI focusing so much on oil & gas E&P and forcing ONGC to focus on it as well. which are four of the fastest emerging 68 ITM. Russia. The positive side of having the political backbone of ONGC is that it gives the company stability and some security. This has lead to new opportunities but it has also opened the door to a lot more threats.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC the refining and retailing business but the GoI put a halt to this. India’s population has already reached over one billion people and continuous to grow rapidly. Economical Environment India is one of the fastest and largest growing countries in the world right now.C.

With all these economic developments have also brought about a huge demand for energy. WARANGAL . With respect to oil industry. Enhanced Oil Recovery and Supervisory Control and Data Acquisition. ONGC has turned what once was a weakness into strength though. This gives them a great advantage because there is a huge economic demand for oil & gas. Other great technological advance was the implementation of an ERP. As the country continues to grow. ONGC also implemented a completely digitized magnetic media seismic library. Technological Environment The technological environment in India is rapidly increasing. that really gives them a competitive advantage of the Virtual Reality Interpretation Center.” This greatly enhances their ability for oil recovery and also for a competitive advantage. MIS and inventory control system. It cannot be emphasized enough how important 69 ITM. Another great technology that they implemented. This was a much needed improvement in technology overall their previous year to help compete on the world market. which is regarded as “one of the ten bests such systems in the world for applications in exploration. which is considered the one of the best in the world. ONGC realized that they were behind in the technological environment and this was creating a huge weakness with respect to their competitors. ONGC was behind technologically. One such example was the acquisition of technology to meet Euro II standards through the purchasing of MRPL. ONGC also implemented advanced technologies such as Increased Oil Recovery.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC and rapidly growing countries. but has since put much needed money and focus on technology. in which ONGC is the main player in India. so also is the technology.

In 2005. With the continued depletion of these nonrenewable fossil fuels the competition to secure oil and gas reserves is very intense.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC technology is in a large corporation like this battling in a market that is very tough and depleting. ONGC not only faces competition from the global market. WARANGAL . On the world market ONGC is not the biggest player. the giant oil companies have seen an integration into other downstream elements of the oil industry to create a competitive advantage. Global Environment The global environment is a very competitive environment with respect to oil and gas exploration. Globally. 70 ITM. ONGC lost a bid to the Chinese company China National Petroleum Corporation to secure oil reserves in Canada and has since lost more battles such as this. they also are in a race with each other with regards to integration and the way these major oil companies are run.

Such types of barriers include: economics of scale. cost disadvantage independent of scale. and government policy. It will take a lot of start up costs and good land to even begin. ONGC is not going anywhere. capital requirements. ONGC is at the top of their game. access to distribution channels. contributing 77% of India’s crude oil production and 81% of India’s natural gas production.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC FIVE FORCES THREAT OF ENTRANTS The threat of new competition all depends on what the existing barriers there are to enter that market. After 45 years. WARANGAL . THREAT OF BUYERS 71 ITM. switching costs. At this point ONGC is buying all the shares from other oil companies in India. It is the leading oil company in India. This company is the most valuable company in India. but probably spreading itself out even further. product differentiation.

72 ITM. ONGC must try to find the right to charge for its products. WARANGAL . It is always better to be on the safe though. ONGC will not be out of business anytime soon. If the gas becomes too much. If oil and gas are harming the environment then ONGC will lose a lot of customers. suppliers can be easily replaced.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Buyers have a lot of power over how well ONGC does. There are thousands of labs full of people trying to figure out the best alternative resource. This company is so big now days that any supplier would love to work with it. If whole company decides to stop buying ONGC products that could very well hurt ONGC. This company has to be careful because it has so many people and other businesses working with it. Natural gas and electric are safer for the environment. Since people do need energy though. THREAT OF SUBSTITUTES People are becoming very concerned about the environment and want to do everything in their power to preserve it. It is important to stay close with customers so that they do not adventure elsewhere. ONGC must find better ways of exploration and production because if they do not someone else will. THREAT OF SUPPLIERS At this point in ONGC’s age. the company must make sure that it is not working with the wrong type of people. Without buyers there is no business. people will eventually goes elsewhere. People can never really trust anyone to be fair when money is involved. As ONGC expands and begins to outsource more.

3rd among global E&P companies and 23rd among Global Energy Companies-Platt’s top 250 Global Energy Company Ranking 2007.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC THREAT OF RIVALRY ONGC has become a leading energy company. WARANGAL . ONGC is ranked 1st among E&P companies in Asia. 73 ITM. Most of the oil companies in India are already working with this company. There is not much competition in India with this company. There is not much completion with this company.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC SWOT ANALYSIS 74 ITM. WARANGAL .

The advancements were substantial and improved the company’s ability to extract the greatest amount of oil and gas. This is a very strong asset to ONGC and one that is a core competency. The ONGC infrastructure is also strength for the company.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Strengths and Opportunities:One of the core strengths and core competencies of ONGC is that they have the leading market share in India. It also gives them opportunities in the future because all their eggs won’t be in one basket. it also added diversification into the downstream businesses. Along with this were the HR development that occurred and the improvements in the HR department. Both of these substantial and costly improvements gave ONGC a strength for the company. This was a great addition to ONGC and helped diversify the company and give it a competitive advantage. The addition of HPCL and their state of the art refinery is another strength and great asset to ONGC. It stills has nearly 1. Not only did this add new technological advancements. And has human assets of 40280 employees working with the company. Bombay High.1 billion metric tons of reserves to be recovered. The company implemented some well needed improvements to the infrastructure and created strength for the company. WARANGAL . Another strength for ONGC is the technological advancements that were implemented over the last few years. ONGC controls nearly 85% of the Indian upstream segment of the oil and gas sector. 75 ITM. Bombay High “accounts for about 38% of all domestic production… and is one of the most-prolific producers of “Sweet and Light” crude in the world. They also have the majority of the oil fields in India and they own the largest oil field in India.

02-0. crude is nearly 76% having physical specifications of sulphur content ranging from 0. starting from the management down. This crude is comparable with Nigerian Bonny Light.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Besides. Through ONGC Videsh. all the crude produced by ONGC is sweet and light. the company has earned international credibility and acclaim. ONGC puts a lot of money into its employees to create strong leaders and good decision makers. WARANGAL .10% and having API Gravity (a measure of fluid density) in the range of 26-46 degrees. The company has a strong infrastructure. which normally trades at a premium. 76 ITM.

The oil field is also aging and this is one of the reasons why the production levels have been down. They are also focused so much on the productivity of Bombay High. WARANGAL . This oil field will not sustain them forever. as reflected in lower Reserve Replacement (RR) ratio.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC Weaknesses and Threats:One large weakness for ONGC is that they are not differentiated enough and diversified enough. ONGC. ONGC needs to get other oil fields but have lost almost every bid that they have put up. This is due either to losing out to 77 ITM. All their focus is on one industry right now and if that industry goes down then the whole company goes down. It lags in technological advancements compared to its international peers and delay in decision-making caused due to the PSU mode of functioning. which has depicted signs of improvement over the past two years. till recently had a very low Reserve accretion rates.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC other competition or due to the GoI blocking the bids. They also are stopping ONGC from bidding on other outside sources of oil fields. WARANGAL . ONGC has been a very successful oil & gas company in India. CONCLUSION:Competitive Advantage/Company Analysis/Action Plan In conclusion. They have made some great changes internally to help them compete globally but they in an industry that has 78 ITM. The GoI continually forces ONGC to focus just on one industry and do not let them diversify. This leads to ONGC biggest weakness and the reason for ONGC biggest external threat. Hands down the largest weakness that ONGC is facing right now is coming from the GoI. but the future is not looking as bright for them. Even though the GoI initially helped the ONGC. the GoI. they are the biggest source for concern right now.

Bombay High is also having some questions on how it will be able to produce in the coming years and this a cause for alarm for ONGC. They should try to leverage their power and get into alternate forms of generating power and use R&D to develop new ways of sustainable energy production. but one that is necessary if ONGC wants to be around for another 50 years. They need to stick to the industries that they are used to or fields related to this and go after that. Growth in the industry they are in is not going to happen.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC hit the mature stage. ONGC’s hope of diversifying into the insurance and shipping business. ONGC is not a big enough company in the industry to stand up against the competition. It is a tough task. In my opinion it is also a very bad idea for growth with regards. What ONGC needs to do is diversify and differentiate itself from its competitors and leverage its current power into another industry. The reason why this is difficult and why ONGC has not been able to achieve this is due to government intervention. Any success they might find from these ventures will be minimal. WARANGAL . The industry is not an attractive industry due to high barriers of entry and exit and tough competition. But they will never be able to do this with the GoI constantly prodding them to focus on oil and gas E&P. The capital requirements are very large and the industry is hitting the mature stage. The oil fields are scarce and the competition is very tough. That starts with leveraging their powers and using it to sway the government and give them more control. so they need to look for another one. They are in a no win situation and they need to figure out how to get out of it. As the oil fields run out the world will be looking for these new forms of energy production and ONGC should try to get a foot hold into this market while they can. These fields are completely unrelated to their own fields and not very attractive fields to jump into. 79 ITM. if any. ONGC is state-owned and thus is affected by the way the GoI wants to run the company.

WARANGAL .STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC BIBLIOGRAPHY 80 ITM.

STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC BIBLIOGRAPHY BOOKS • Marketing Management – Philip Kotler (11th Edition) • ONGC Annual Report WEBSITES • • • www.ongcindia.cairnenergy. WARANGAL .com 81 ITM.gailonline.com www.com www.

WARANGAL .google.com www.dgh.STUDY OF PROCESS FOR MARKETING OF NATURAL GAS IN ONGC • • • • • www.natgas.com www.ril.oil.com www.info www.com 82 ITM.

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