Dr.

AMBEDKAR INSTITUTE OF TECHNOLOGY

(An Autonomous Institute Affiliated to Visvesvaraya Technological University,
Belagavi, Accredited by NAAC, with ‘A’ Grade)
Near Jnana Bharathi Campus, Bengaluru – 560056

DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION

Industrial Internship Report on

“AN ORGANISATION STUDY AT OIL AND NATURAL GAS CORPORATION”

Submitted in partial fulfillment of the requirement for the award of the Degree of
Master of Business Administration
By

SHALINI K
1DA20BA037

For the academic year 2021-22

Under the Guidance of

Ms Arundathi S V
Designation, MBA Dept., Dr. AIT, Bengaluru.

Place of work: OIL AND NATURAL GAS CORPORATION ,Bangalore.

Visvesvaraya Technological University

Jnana Sangama, Belagavi, Karnataka 590018

1
 Dr. Ambedkar Institute of Technology
(An Autonomous Institute, Affiliated to Visvesvaraya Technological University, Belagavi,
Accredited by NAAC with A Grade)
Near Jnana Bharathi Campus, Bengaluru-560056

DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION

CERTIFICATE
Certified that the industrial internship titled “AN ORGANIZATION STUDY AT OIL AND
NATURAL GAS CORPORATION ” carried out by Ms. SHALINI K, USN:1DA20BA037 , a
bonafide student of Dr. AMBEDKAR INSTITUTE OF TECHNOLOGY, BENGALURU, in
partial fulfillment for the award of Degree in MASTER OF BUSINESS ADMINISTRATION
of Dr. Ambedkar Institute of Technology during the year 2021-22. It is certified that all
corrections/suggestions indicated during Internal Assessment have been incorporated
in the report deposited in the department. The internship report has been approved as
it satisfies the academic requirements in respect of industrial internship prescribed for
the said Degree.

Signature of the Guide Signature of the HOD Signature of the Principal

Dr. S BASKARAN Dr. M. MEENAKSHI
Ms. ARUNDATHI S V
Assoc. Professor and HOD Princip
Dept. of MBA, Dr. AIT Dept. of MBA, Dr. AIT al Dr.
A.I.T

Viva-Voice Examination
Name of the Examiners Signature with Date
1.

2.

2
 Dr. AMBEDKAR INSTITUTE OF TECHNOLOGY
(An Autonomous Institute Affiliated to Visvesvaraya Technological
University, Belagavi, Accredited by NAAC, with ‘A’ Grade)
Near Jnana Bharathi Campus, Bengaluru – 560056

Declaration
I hereby declare that the matter embodied in this internship is the result of organization study carried out

by me at the Department of Master of Business Administration, Dr. Ambedkar Institute of Technology,

Bengaluru under the supervision of Ms ARUNDATHI S V ,Department of Master of Business

Administration. The internship report or part thereof has not been submitted for the award of any degree of

any other university or institute.

Bengaluru – 560056 SHALINI K

Date: 1DA20BA037

3
 ACKNOWLEDGEMENT

I would like to thank Dr. M. Meenakshi, Principal, Dr. AIT,

I specially thank to Dr. S. BASKARAN, Associate Professor & HOD, Department of MBA,

I extend my special thanks to Ms. ARUNDATHI S V , Department of MBA,

I extend my thanks to my parents and my friends who helped me to finish the internship report.

Place: Bengaluru SHALINI K

Date: 1DA20BA037

4
 TABLE OF CONTENTS

CHAPTER PARTICULARS PAGE

NO.

Title Page
Certificate from College 2
Student Declaration 3
Acknowledgement 4
Table of Content 5
List of tables
List of Graphs
EXECUTIVE SUMMARY
Industry Profile 8
1 1.1 History or origin of the Industry 9-13
1.2 Current Status /Scenario of the Industry 13
1.3 Future prospects 14-15

Organization Profile 16
2.1 Back ground of the organization 17-18
2.2 Achievements/awards 18-19
2.3 Nature of business 19
2

2.4 Vision, Mission, Quality policy 19-20

2.5 Product/Service Profile 20-21
2 2.6 Ownership Pattern 21-22
2.7 Competitors Information 22-25
2.8 Infrastructure Details 25-26
2.9 Future Growth and Prospects 26
Mc Kinsey’s 7s framework & Michael Porter’s 5 Force Model 27
3.1 Strategy, Structure, System, Style, Staff, Shared Value, Skills 28-31
3 3.2 Bargaining Power of Suppliers and Customers, Threat of New 31-33
Entry and Substitutes, Rivalry among existing competitors
Analysis of financial statement & SWOT Analysis 34
4 4.1 Ratio Analysis 35-36
4.2 SWOT Analysis 37-38
Conclusions 39
5.1 Findings 40
5 5.2 Suggestions 40
5.3 Conclusions 40
5.4 Learning Experience 41

Bibliography 42

5
 Annexure

LIST OF TABLES

TABLE NO. PARTICULARS PAGE NO.

1 Products and services 20

2 Ownership patterns 21
3 Ratio analysis 35-36

6
 LIST OF GRAPHS

PARTICULARS PAGE NO.

GRAPH NO.
1 7’S 28

2 Structure 29

3 Rivalary among firms 33

7
 CHAPTER 01
INDUSTRY PROFILE

8
1.1HISTROY OR ORIGIN OF THE INDUSTRY
Oil and Natural Gas Corporation (ONGC) is an Indian government-owned crude oil and natural gas
corporation.
Its registered office is in New Delhi. It is under the ownership of Ministry of Petroleum and Natural Gas,
Government of India.
It is the largest government-owned-oil and gas exploration and production corporation in the country, and
produces around 70% of India's crude oil (equivalent to around 57% of the country's total demand) and
around 84% of its natural gas. In November 2010, the Government of India conferred the Maharatna status
to ONGC.

In a survey by Government of India for fiscal year 2019–20, it was ranked as the largest profit making PSU
in India. It is ranked 7th among the Top 250 Global Energy Companies by Platts.

ONGC was founded on 14 August 1956 by Government of India. It is involved in exploring for and
exploiting hydrocarbons in 26 sedimentary basins of India, and owns and operates over 11,000 kilometers of
pipelines in the country. Its international subsidiary ONGC Videsh currently has projects in 17 countries.
ONGC has discovered 7 out of the 8 producing Indian Basins, adding over 7.15 billion tonnes of In-place
Oil & Gas volume of hydrocarbons in Indian basins. Against a global decline of production from matured
fields, ONGC has maintained production from its brownfields like Mumbai High, with the help of
aggressive investments in various IOR (Improved Oil Recovery) and EOR (Enhanced Oil Recovery)
schemes. ONGC has many matured fields with a current recovery factor of 25–33%. Its Reserve
Replacement Ratio for between 2005 and 2013, has been more than one. During FY 2012–13, ONGC had to
share the highest ever under-recovery of INR 89765.78 billion (an increase of INR 17889.89 million over
the previous financial year) towards the under-recoveries of Oil Marketing Companies (IOC, BPCL and
HPCL). On 1 November 2017, the Union Cabinet approved ONGC for acquiring majority 51.11% stake in
HPCL (Hindustan Petroleum Corporation Limited). On Jan 30th 2018, Oil & Natural Gas Corporation
acquired the entire 51.11% stake of Hindustan Petroleum Corporation.

9
FOUNDATION TO 1956

Pumpjack working in an oilfield of ONGC at Sivasagar, Assam

Before the independence of India in 1947, the Assam Oil Company in the north-eastern and Attock Oil
company in the north-western part of the undivided India were the only oil-producing companies, with
minimal exploration input. The major part of Indian sedimentary basins was deemed to be unfit for the
development of oil and gas resources.
After independence, the Central Government of India realized the importance of 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 the 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 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 Moraan in Assam. In West Bengal, the Indo-Stanvac
Petroleum project (a joint venture between the 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, the 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 the Minister of Natural Resources visited several European countries to
study the status of the oil industry in those countries and to facilitate the training of Indian professionals for
exploring potential oil and gas reserves. Experts from Romania, the Soviet Union, the United
States and West Germany subsequently visited India and helped the government with their
10
expertise. Soviet experts later drew up a detailed plan for geological and geophysical surveys and drilling
operations to be carried out in the 2nd Five Year Plan (1956–61).
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 a 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 programs 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 TO 2000

An ONGC platform at Bombay High in the Arabian Sea

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 onshore and offshore). ONGC went offshore in the early 1970s 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.

11
ONGC became a publicly held company in February 1994, with 20% of its equity were sold to the public
and eighty per cent retained by the Indian government. At the time, ONGC employed 48,000 people and had
reserves and surpluses worth ₹104.34 billion, in addition to its intangible assets. The corporation's net worth
of ₹107.77 billion was the largest of any Indian company.
In 1958 the then Chairman, Keshav Dev Malaviya, held a meeting with some geologists in the Mussoorie
office of the Geology Directorate where he accepted the need for ONGC to go outside India too in order to
enhance Indian owned capacity for oil production. The argument in support for this step, by LP Mathur and
BS Negi, was that Indian demand for crude would go up at a faster rate than discoveries by ONGC in India.
Malaviya followed this up by making ONGC apply for exploration licences in the Persian Gulf. Iran gave
ONGC four blocks and Malaviya visited Milan and Bartlseville to request ENI and Phillips Petroleum to
join as partners in the Iran venture. This resulted in the discovery of the Rostum oilfield in the early 'sixties,
very soon after the discovery of Ankleshwar in Gujarat. This was the very first investment by the Indian
public sector in foreign countries and oil from Rostum and Raksh was brought to Cochin where it was
refined in a refinery built with technical assistance from Phillips.
2001 TO PRESENT
In 2003, ONGC Videsh Limited (OVL), the division of ONGC concerned with its foreign assets,
acquired Talisman Energy's 25% stake in the Greater Nile Oil project.
In 2006, a commemorative coin set was issued to mark the 50th anniversary of the founding of ONGC,
making it only the second Indian company (State Bank of India being the first) to have such a coin issued in
its honour.
In 2011, ONGC applied to purchase 2000 acres of land at Dahanu to process offshore gas. ONGC Videsh,
along with Statoil ASA (Norway) and Repsol SA (Spain), has been engaged in deep-water drilling off the
northern coast of Cuba in 2012. On 11 August 2012, ONGC announced that it had made a large oil
discovery in the D1 oilfield off the west coast of India, which will help it to raise the output of the field from
around 12,500 barrels per day (bpd) to a peak output of 60,000 bpd.
In November 2012, OVL agreed to acquire ConocoPhillips' 8.4% stake in the Kashagan oilfield in
Kazakhstan for around US$5 billion, in ONGC's largest acquisition to date. The acquisition is subject to the
approval of the governments of Kazakhstan and India and also to other partners in the Caspian Sea field
waiving their pre-emption rights.
In January 2014, OVL and Oil India completed the acquisition of Videocon Group's ten percent stake in a
Mozambican gas field for a total of $2.47 billion.
In June 2015, Oil and Natural Gas Corporation (ONGC) gave a Rs27bn ($427m) offshore contract for the
Bassein development project to Larsen & Toubro (L&T).

12
 In February 2016, the board of ONGC approved an investment of Rs. 5,050 crore in Tripura for drilling of
wells and creation of surface facilities to produce 5.1 million standard cubic feet per day gas from the state's
fields.
On 19 July 2017, the Government of India approved the acquisition of Hindustan Petroleum Corporation by
ONGC.

1.2 CURRENT STATUS OR SCENARIO OF THE INDUSTRIES

 Gas price increases positively.
 ONGC share price touches 52 week high after JPMorgan maintains buy for target of rs 190.
 Oil and Natural Gas Corporation (ONGC) earmarked Rs 30,000 crore towards capital expenditure in
financial year 2021-22, and aims at an out put of 22.56 million tonnes of crude oil and 24.89 billion
cubic metres of gas during the year.
 ONGC is also planning to invest in Regasification Terminal .

13
1.3FUTURE PROSPECT
 Oil and Natural Gas Corporation (ONGC) has drawn up a ‘Perspective Plan 2030’ to invest Rs.11
lakh-crore over the next 18 years.
 Talking to newsmen here on Monday, Chairman and Managing Director Sudhir Vasudeva said the
plan envisaged doubling of production over the next 18 years at 4-5 per cent.
 “The plan also includes a four-fold growth in market capitalisation, and a six-fold growth in
production from international operations. All this will require an investment of Rs.11,00,000 crore,”
he said.
 In 2011-12, ONGC produced 23.71 million tonnes of oil and 23.32 billion cubic metres (bcm) of
gas. It posted a net profit of Rs.25,123 crore on a turnover of Rs.76,130 crore.
 Its overseas arm, ONGC Videsh Ltd. (OVL), produced 6.21 million tonnes of oil and 2.54 bcm of
gas in 2011-12.
 Mr. Vasudeva said OVL would be looking to explore investment opportunities in around 4-5
international hubs where the entity could achieve adequate growth and source 60 million tonnes of
oil and oil equivalent gas per year by 2030.
 The potential hubs included heavy oil, conventional plays, shale gas and deepwater exploration.
“ONGC also looks to unlock 450 million tonnes of oil and oil equivalent gas from yet-to-be found
domestic resources,” he added.
 They have signed a memorandum of understanding (MoU) with ConocoPhillips, U.S.-based oil
major and pioneer in shale gas and deepwater exploration, in March 2012 for co-operation in the
research of shale gas exploration in India, U.S. and elsewhere in the world.
 They have also signed a MoU with China National petroleum Corp (CNPC), a leading integrated
international energy company, this year for co-operation in hydrocarbon sector, including midstream
and downstream.
 Asserting that considerable potential existed in Indian basins, Mr. Vasudeva said ONGC’s existing
portfolio contained yet-to-be-developed discoveries that could add more than 300 million tonnes of
oil and oil equivalent gas to production by 2030.
 “ONGC plans to invest in the non-E&P (exploration and production) sector.
 These investments will include expansion and further petrochemical integration at the MRPL
refinery, additional LNG re-gasification and capacity in alternative energy generation, including
solar, wind and potentially nuclear.

14
 It recently adopted Energy Strategy 2040, which, as CMD Shashi Shanker stated in the annual
report, “envisions ONGC as a diversified energy company with strong contribution from non-E&P
businesses; 3x revenues and 5-6x market capitalisation.” 
 ONGC has already taken a concrete step in this direction by setting up a 51 MW wind farm in
Gujarat.
 BD&JV is now taking the initiative further for significant addition of capacity in the portfolio. The
Group is also actively examining and pursuing various prospects in the domains of offshore wind,
solar, hydro and nuclear energy sources while engaging with some of the best players in the
respective domains.
 A gas based urea fertilizer plant in Tripura is in active consideration by ONGC for early
monetization of new gas discovery in the acreage awarded to ONGC in NELP III round.
 The project is envisaged to be set up in Joint Venture mode with one of a leading fertilizer company
of India and Government of Tripura based on techno-commercial viability.

15
 CHAPTER 02

ORGANISATION PROFILE

16
2.1 BACK GROUND OF THE ORGANIZATION
 ONGC was founded on 14 August 1956 by Government of India. It is involved in exploring for and
exploiting hydrocarbons in 26 sedimentary basins of India, and owns and operates over 11,000
kilometers of pipelines in the country. Its international subsidiary ONGC Videsh currently has
projects in 17 countries.
 NGC was set up under the visionary leadership of Pandit Jawahar Lal Nehru.
 Pandit Nehru reposed faith in Shri Keshav Dev Malviya who laid the foundation of ONGC in the
form of Oil and Gas division, under Geological Survey of India, in 1955.
 A few months later, it was converted into an Oil and Natural Gas Directorate. The Directorate was
converted into Commission and christened Oil & Natural Gas Commission on 14th August 1956.
 "Not only had India..set up her own machinery for oil exploration and exploitation... an efficient oil
commission had been built where a large number of bright young men and women had been trained
and they were doing good work" said Pandit JawaharLal Nehru.
 India's first Prime Minister to Lord Mountbatten, on ONGC in 1959.
 In 1994, Oil and Natural Gas Commission was converted in to a Corporation, and in 1997 it was
recognized as one of the Navratnas by the Government of India. Subsequently, it has been conferred
with Maharatna status in the year 2010.
 In its 60 years of illustrious journey, ONGC has crossed many a milestone to realize the energy
aspirations of India.
 The journey of ONGC, over these years, has been a tale of conviction, courage and commitment.
 ONGCs’ superlative efforts have resulted in converting earlier frontier areas into new hydrocarbon
provinces. From a modest beginning, ONGC has grown to be one of the largest E&P companies in
the world in terms of reserves and production.

The Company’s Evolution can be summarized as under:

 1955 – Inception
 1958 – First Oil in Cambay
 1960 – Oil  gas discovery in Gujarat
 1963 – Oil in Assam
 1965 – Concept of ONGC Videsh Operations
 1970 – first Offshore well
 1974 – Mumbai High discovered
 1976 – Bassein Gas field of Mumbai High
 1984 – GAIL formed out of ONGC
 1993 – ONGC a limited company
 1993 – Govt of India divest 2% share
 1994 – 2% share to employees
 1999 – Equity swap ONGC, IOC, GAIL
 2003 – Acquired Mangalore Refineries Petrochemicals Ltd from Birla Group
 2003 – Ist equity Oil & gas from Sudan / Vietnam
 2004 – Govt of India divests 10%
 2006 – Diversification – ONGC Petro additives Ltd and ONGC Mangalore Petro Ltd
 2007 – ONGC Energy Centre formed
 2010 – Coal Bed Methane Production
17
  2013 – Oil at Kazakhstan/Mozambique
 2014 – Top Energy Company of India; 5th in Asia, 21st globally: Platts
 2015 – ONGC Energy Center receives US Patent
 2016 – Forbes Global: ONGC 3rd largest in India
 2018 – 51.11% stake in Hindustan Petroleum Corporation Limited
 2019 – Invests Rs 83,000 crore in 25 projects; oil & gas gain over 180 MT
 2019 – Bengal Basin discovered
 2020 – ONGC bags 7 Blocks in Bid Round IV of OALP
 2020 – Bengal Basin dedicated to nation

With more than 50 years of Exploration ONGC had discovered 6 of the 7 Producing basins of India. These Oil
Producing Basins are;

 1958 – Cambay, Gujarat

 1967 – Rajasthan
 1973 – Assam
 1974 – Mumbai Offshore
 1980 – Krishna Godavari Basin
 1985 – Cauvery Basin

2.2 ACHIEVEMENTS/AWARDS
o ONGC is the top Employer in the Energy sector in India, in the Randstad Awards 2013.
o ONGC was one of 12 winners of the 'Golden Peacock Award 2014' for its corporate social
responsibility practices, and one of 24 winners of the 'Golden Peacock Award 2013' in the
occupational safety and health category.
o In April 2013, it was ranked at 155th place in the Forbes Global 2000 for 2012.
o In 2011, ONGC was ranked 39th among the world's 105 largest listed companies in 'transparency
in corporate reporting' by Transparency International making it the most transparent company in
India.
o It was conferred with 'Maharatna' status by the Government of India in November 2010. The
Maharatna status to select PSUs allows more freedom in decision making.
o In February 2014, FICCI conferred it with Best Company Promoting Sports Award.
o ONGC wins the "Greentech Excellence Award" for the year 2013 in Platinum Category
o ONGC was ranked 82nd among India's most trusted brands according to the Brand Trust Report
2012, a study conducted by Trust Research Advisory. In the Brand Trust Report 2013, ONGC

18
 was ranked 191st among India's most trusted brands and subsequently, according to the Brand
Trust Report 2014, ONGC was ranked 370th among India's most trusted brands.
o ONGC is the title sponsor for the first edition of the Corporate social responsibility (CSR)
Award organised by Amar Ujala
o Golden Peacock National Quality Award – 2020: The Golden Peacock National Quality Award
for the year 2020 has been conferred to ONGC in recognition of its robust Quality Management
Systems. The Golden Peacock National Quality Award is an annual award administered by the
Golden Peacock Award Secretariat, as a part of the activities of “The Institute of Directors, New
Delhi”.
o Global Environment Award 2020: ONGC’s safety institute IPSHEM, Goa made a breakthrough
in receiving prestigious “Energy And Environment Foundation Global Environment Award
2020” under Platinum category during an online ceremony on 16 December 2020, organized by
The Energy and Environment Foundation.
o Stevie Awards for Great Employers – 2020: Energy Maharatna ONGC won a prestigious
international award – Silver Stevie Awards for Great Employers as the Most Valuable Employer
- Asia Pacific in the COVID-19 Response category. ONGC will be receiving the award in a
virtual ceremony to be held on 7 November 2020.

2.3 NATURE OF BUSINESS

ONGC Represents India's Energy Security Through its Pioneering Efforts. Maharatna ONGC is the largest
crude oil and natural gas Company in India, contributing around 71 per cent to Indian domestic production.
The ONGC is made a statutory body by an act of parliament. 1974: ONGC discovers the major Bombay
High offshore field with a strike from the advanced Japanese-built Sagar Samrat drilling platform.

2.4 VISION, MISSION, QUALITY POLICY

Vision
To be global leader in integrated energy business through sustainable growth, knowledge excellence and
exemplary governance practices.

19
Mission
 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.


Quality policies

 Fulfilling the expectations of customer / interested parties

 Striving for excellence in project management activities
 Adhering to  all plans and applicable requirements

2.5 Product/Service Profile

 The Company holds the largest share of hydrocarbon acreages in India (61% in PEL Areas & 81% in
ML Areas). ONGC possesses about 15% of the total Indian refining capacity. This E&P Company has a
well-integrated Hydrocarbon Value Chain structure with interests in LNG and product transportation
business as well.

 ONGC supplies crude oil, natural gas, and value-added products to major Indian oil and gas refining and
marketing companies. Its primary products crude oil and natural gas are for the Indian market.
 Product-wise revenue breakup for FY 2016–17 (₹ billion)

20
 Product Revenue

Crude oil 562.38

Gas 168.88

LPG 31.48

Naphtha 76.80

C2-C3 13.44

SKO 3.69

Others 1.59

Adjustments – 32.74

Total 825.52

2.6 OWNERSHIP PATTERN

The equity shares of ONGC are listed on the Bombay Stock Exchange where it is a constituent of the BSE
SENSEX index, and the National Stock Exchange of India where it is a constituent of the S&P CNX Nifty.
As on 31 March 2013, Government of India held around 69% equity shares in ONGC. Over 480,000 individual
shareholders hold approx. 1.65% of its shares. Life Insurance Corporation of India is the largest non-promoter
shareholder in the company with 7.75% shareholding.

Shareholders (as on 31-Mar-2013) Shareholding]

Promoter – Government of India 68.94%

Government Companies 10.09%

21
Banks, Financial Inst. & Insurance companies 09.69%

Foreign Institutional Investors (FII) 06.27%

Private Corporate Bodies 11.83%

Individual shareholders 01.65%

Mutual Funds and UTI 01.13%

NRI/Employees 00.11%

Total 100.0%

2.7 COMPETITORS INFORMATION

1) INA-Industrija nafte

22
NA (Industrija nafte) is an oil and gas exploration and production company. It offers refinery products
include gasoline and diesel, benzene concentrate, heating oil, sulfur, bitumen, and others. The company also
provides services such as car washes and bars, restaurants, and retail outlets
INA-Industrija nafte, d.d. is a Croatian multinational oil company. INA Group has leading role in Croatia's
oil business, a strong regional position in the oil and gas exploration and production, oil processing, and oil
product distribution activities. INA, d.d. is a stock company with the Hungarian MOL Group and
the Croatian Government as its biggest shareholders, while a minority of shares is owned by private and
institutional investors. INA shares have been listed at the London and Zagreb stock exchanges since
December 1, 2006. INA Group is composed of several affiliated companies wholly or partially owned by
INA, d.d.. The Group has its headquarters in Zagreb.

2) PEMEX

Pemex (a portmanteau of Petróleos Mexicanos, which translates to Mexican Petroleum in English; Spanish
pronunciation: [ˈpemeks] ) is the Mexican state-owned petroleum company managed and operated by the
Mexican government. It was formed in 1938 by nationalization and expropriation of all private oil
companies in Mexico at the time of its formation. Pemex had total assets worth $101.8 billion in December
2019 and as of 2009 was Latin America's second largest enterprise by annual revenue, surpassed only by

23
Petrobras (the Brazilian national oil company). The company is the 7th most polluting in the world
according to The Guardian.

3) SHELL

Royal Dutch Shell plc, commonly known as Shell, is an Anglo-Dutch multinational oil and gas company
headquartered in The Hague in the Netherlands. It is incorporated in the United Kingdom as a public limited
company. It is one of the oil and gas "supermajors", and, measured by 2020 revenues, the fifth-largest
company in the world, the largest based in Europe, and the largest not based in either China or the United
States. In the 2020 Forbes Global 2000, Shell was ranked as the 21st-largest public company in the world.
Shell was first in the 2013 Fortune Global 500 list of the world's largest companies; in that year its revenues
were equivalent to 84% of the Dutch national $556 billion GDP. Since then, Shell has dropped to the 5th
largest company on the Global 500, but is still the largest non state-owned energy corporation in the world
and the second-largest non-American corporation in the world, falling short only to Walmart

24
4)Reliance Industries Limited (RIL)

It is an Indian multinational conglomerate company, headquartered in the city of Mumbai, India. RIL's
diverse businesses include energy, petrochemicals, natural gas, retail, telecommunications, mass media, and
textiles. Reliance is one of the most profitable companies in India. the largest publicly traded company in
India by market capitalisation, and the largest company in India as measured by revenue after recently
surpassing the government-owned Indian Oil Corporation. It is also the eighth largest employer in India
with over 236,000 employees. RIL has a market capitalisation of US$245 billion as of October 2021.

The company is ranked 155th on the Fortune Global 500 list of the world's biggest corporations as of 2021.
Reliance continues to be India's largest exporter, accounting for 8% of India's total merchandise exports and
access to markets in over 100 countries. Reliance is responsible for almost 5% of the government of India's
total revenues from customs and excise duty. It is also the highest income tax payer in the private sector in
India. The company has negative free cash flows.

25
2.8 INFRASTRUCTURE DETAILS
 The company's domestic operations are structured around 11 assets (predominantly oil and gas
producing properties), 7 basins (exploratory properties), 2 plants (at Hazira and Uran) and services
(for necessary inputs and support such as drilling, geo-physical, logging and well services).
 The primary business of ONGC Videsh is to prospect for oil and gas acreages outside India,
including exploration, development and production of oil and gas.
 ONGC has been formally handed over the physical infrastructure and assets of the Mid & South
Tapti field in the western offshore of India.

2.9 FUTURE GROWTH AND PROSPECTS

 It recently adopted Energy Strategy 2040, which, as CMD Shashi Shanker stated in the annual
report, “envisions ONGC as a diversified energy company with strong contribution from non-E&P
businesses; 3x revenues and 5-6x market capitalisation.” 
 While ONGC's crude oil output fell to 20.71 MMT in 2019-20 from 21.11 MMT in 2018-19, natural
gas production declined to 23.85 BCM in 2019-20 compared to 24.75 BCM in previous year.
 ONGC is given a target to achieve 28 MMT of oil and 35 BCM of gas production by March 31,
2024.


26
 CHAPTER 03
ANALYSIS OF FINANCIAL STATEMEMT
AND SWOT ANALYSIS

27
3.1 7’S

These are the 7s of any organisation, which are categorised as being hard and soft in nature.
Hard Elements Soft Elements
Structure Skills
Strategy Staff
System Styles

Strategy:
Strategy plays associate integral role in success of any business. Strategy for ONGC is
28
outlined to any or all the workers and stakeholders that facilitate the organisation to perform, manage, guide and
implement activities that fulfil the business goals. Smart Goals are set with short and future deadlines in
accordance with the business strategy. ONGC’s strategy conjointly
takes into thought shopper trends and demands. The strategy at ONGC is versatile and flexible.

Structure:
ONGC incorporates a praise structure hierarchy that's supported by learning and progressive organizations.
With lesser social control levels in between and a lot of access to the senior
management and leadership, the workers feel safer and assured and even have higher access to info. ONGC has
high coordination between totally different departments. ONGC incorporates a hybrid structure between
centralization and decentralization. Like several progressive organizations, ONGC mostly supports localized
higher cognitive process.

System:

29
ONGC has outlined and well-demarcated systems in situ to confirm that the business operations are managed
effectively. ONGC operations are:
 Human resource management
 Finance
 Marketing
 Operations
 Sales
 Distribution management
 Public Relation Management
 Strategic leadership.
ONGC has particularly designed tools and strategies as controls for evaluating performance and goal
attainment. This watching of the performance is continual and current. this is often mostly done through
observation and informal discussions and Feedback to workers.

Shared Values:
The core values at ONGC are
 Creativeness
 Honesty
 Transparency
 Responsible
 Trust
 Quality
 Heritage.
ONGC encourages associate inclusive culture that celebrates diversity.

Style:
ONGC incorporates a participative leadership vogue. Through a participative leadership vogue,
ONGC is in a position to interact and involve its workers in decision-making processes and social control
choices. With its subsidiary and inspiring structure culture, ONGC provides thanks to internal collaboration and
cooperation between workers, systems, teams, and departments.

Staff:
30
ONGC incorporates a enough range of workers used across its international operations.
Workers for various job roles and positions are employed internally likewise as outwardly all workers are given
in house coaching to inform themselves with the corporate.

Skill:
ONGC pays explicit attention to enhancing the talents and capacities of its workers. It arranges
regular coaching and workshops – internally likewise as outwardly managed- to supply growth and
development opportunities for its workers. The human resource is one among the core competitive benefits of
the corporate. The talents of workers are developed specifically for job roles and needs at ONGC and supply a
competitive profit to the corporate where players cannot imitate worker skills or coaching. This creates a
singular and non-substitutable ability for ONGC.

3.2 Bargaining Power of Suppliers and Customers, Threat of New Entry and
Substitutes, Rivalry among existing competitors.

3.2.1 Bargaining Power of Suppliers

 ONGC is a vertically integrated company that really deals in all areas from finding the product to
refining the product to selling the product.

 With this being said there is not much to worry about the bargaining power of the suppliers. Supplier
power is high as the net margins are strongly dependent on the price of the crude.

3.2.2 Bargaining Power of Buyers

 Not too critical for most companies as refining operations are apart of the complete supply chain,
with the refining operations supplying the product to the marketing company. However in case of
standalone companies (which may no longer apply) long term contract have to be signed with the
marketing companies. The margins in such cases are dependent on such long term contracts.

 Another reason for this lack of bargaining power is that as of right now there is not a real alternative
to Oil.

31
3.2.3Threat of new entrants

 Due mostly to the industry that ONGC is in, it's hard for there to be many new entrants.

 The only real threat that might arise would be another government funded Oil and Gas company.
The reason for this is that a government would not have as hard at time raising funds and gaining
access to resources.

 There is really not much of a threat because there are two main barriers to entry that would be
stopping potential threats. These would be very high capital requirements as well as access to Cost
disadvantages independent of scale.

3.2.4 Threat of Substitutable Products

 Although gas, solar power etc. exist as substitutes, none of the mare big enough to impact the
demand of the petroleum products.

 As stated above there is not a real alternative to oil at this time. It does not seem that at this time
there is a huge threat of this happening but it is definitely a possibility that any player in the market
must beware of.

3.2.5 Rivalry among Competitors

 The rivalry in the industry was low till as the industry was tightly regulated by the government.
However, the level competition has increased with Reliance and other MNC becoming more
aggressive.

 The largest competitors in this industry for ONGC are Exxon Mobile and Royal Dutch Shell. ONGC
is currently in 14 different companies whereas Exxon Mobile is in 20 different
 countries. While Exxon may be a larger company now ONGC is growing and is becoming a very
important global player.
32
33
 CHAPTER 04
ANALYSIS OF FINANCIAL STATEMENT &
SWOT ANALYSIS

34
4.1 RATION ANALYSIS

KEY FINANCIAL MAR 21 MAR 20 MAR 19 MAR 18 MAR 17

RATIOS OF OIL AND
NATURAL GAS
CORPORATION (in Rs.
Cr.)
PER SHARE RATIOS
Basic EPS (Rs.) 8.94 10.69 20.86 15.54 13.95
Diluted EPS (Rs.) 8.94 10.69 20.86 15.54 13.95
Cash EPS (Rs.) 21.92 25.49 33.78 26.82 23.45
Book Value 162.60 154.48 161.36 150.69 144.58
[ExclRevalReserve]/Share
(Rs.)
Book Value 162.60 154.48 161.36 150.69 144.58
[InclRevalReserve]/Share
(Rs.)
Dividend / Share(Rs.) 3.60 5.00 7.00 6.60 7.55
Revenue from 54.12 76.44 87.13 66.21 60.54
Operations/Share (Rs.)
PBDIT/Share (Rs.) 26.68 37.13 46.28 34.96 30.10
PBIT/Share (Rs.) 13.71 22.33 33.74 23.69 20.60
PBT/Share (Rs.) 13.04 16.19 31.76 22.51 19.65
Net Profit/Share (Rs.) 8.94 10.69 21.24 15.54 13.95
PROFITABILITY
RATIOS
PBDIT Margin (%) 49.30 48.57 53.12 52.81 49.71
PBIT Margin (%) 25.32 29.21 38.72 35.78 34.02
PBT Margin (%) 24.09 21.18 36.45 34.00 32.45
Net Profit Margin (%) 16.51 13.98 24.37 23.47 23.03
Return on Networth / 5.49 6.91 13.16 10.31 9.64
Equity (%)
Return on Capital 6.12 10.96 16.61 12.56 11.59
Employed (%)
Return on Assets (%) 3.53 4.53 8.83 6.84 7.23
Total Debt/Equity (X) 0.07 0.07 0.11 0.13 0.00
35
Asset Turnover Ratio (%) 21.38 32.41 36.26 29.17 31.42
LIQUIDITY RATIOS
Current Ratio (X) 0.86 0.67 0.61 0.44 1.55
Quick Ratio (X) 0.63 0.45 0.44 0.30 1.23
Inventory Turnover Ratio 8.03 11.23 14.14 12.70 12.60
(X)
Dividend Payout Ratio 19.57 53.80 35.91 38.92 53.17
(NP) (%)
Dividend Payout Ratio 7.98 22.56 22.57 22.55 31.63
(CP) (%)
Earnings Retention Ratio 80.43 46.20 64.09 61.08 46.83
(%)
Cash Earnings Retention 92.02 77.44 77.43 77.45 68.37
Ratio (%)
VALUATION RATIOS
Enterprise Value (Cr.) 143,227.65 98,904.39 221,808.33 252,754.94 227,968.77
EV/Net Operating 2.10 1.03 2.02 2.97 2.93
Revenue (X)
EV/EBITDA (X) 4.27 2.12 3.81 5.63 5.90
MarketCap/Net Operating 1.89 0.89 1.83 2.69 3.06
Revenue (X)
Retention Ratios (%) 80.42 46.19 64.08 61.07 46.82
Price/BV (X) 0.63 0.44 0.99 1.18 1.28
Price/Net Operating 1.89 0.89 1.83 2.69 3.06
Revenue
Earnings Yield 0.09 0.16 0.13 0.09 0.08

4.2 SWOT ANALYSIS OF ONGC

4.2.1 STRENGTHS
a) Main features are:
 ONGC LTD is perceived to be the leader in oil production industry.
 ONGC has a very efficient and professional management team.
 ONGC being an international company has sufficient resources and capital to invest.
36
  ONGC has ISO-9001 & ISO 14001 registration.

b) Dominate Indian Leadership

 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.
 Retain dominant position in Indian petroleum sector and enhance India's energy availability.
 ONGC has a unique distinction of being a company with in-house service capabilities in all the
activity areas of exploration and production of oil & gas and related oil-field services.

c) Represents India’s Energy Security ONGC has single-handedly written India's hydrocarbon saga by the
following methods:

 Building 6 billion tonnes of In-place hydrocarbon reserves with more than 300 discoveries of oil and
gas; in fact, 5 out of the 6 producing basins have been discovered by ONGC: out of these In-place
hydrocarbons in domestic acreage, Ultimate Reserves are 2.1 Billion Metric Tonnes (BMT) of Oil
Plus Oil Equivalent Gas (O+OEG).
 Cumulatively producing 685 Million Metric Tonnes (MMT) of crude and 375 Billion Cubic Meters
(BCM) of Natural Gas, from 115 fields. a) India’s Most Valuable Public Sector Enterprise
 Ranked as the most respected Public Enterprise in India in 2007 “Business World Survey, with 19th
position in the league of the most-respected Indian Corporate(s).
 Rated ‘Excellent’ in MOU Performance Rating for 2006-07 by the Department of Public Enterprises,
Ministry of Heavy Industries in Public Enterprises, GOI. e) Pioneering Efforts ONGC is the only
fully–integrated petroleum company in India, operating along the entire hydrocarbon value chain.

4.2.2 WEAKNESSES
 ONGC facing difficulties to produce oil from aging reservoirs.
 Security of personnel & property especially crude oil continues to be a cause of concern in certain
area.
 In some exploration Campaign Company involves high technology, high technology, High
investment and high risks.

4.2.3 OPPORTUNITY
 Energy utilization of buried coal resource (700 – 1700M), estimated 63BT (Equivalent to 15000
BCM).
37
  ONGC facing difficulties to produce oil from aging reservoirs.

4.2.4 THREATS
The Global Energy market is concerned about – shift in energy demand-supply axis, energy security, geo-
politics, growing competition to establish control over energy resources, shortage of skilled manpower,
spiraling cost of services resource nationalism, regulatory frame works and taxation policies. ONGC being
one of them also faces unprecedented challenge in the form of contradictions in expectations from the
nations and societies and ground realities. The contradictions are:
 Shrinking conventional energy resources and booming energy demand.
 Increasing cost of producing energy vis-à-vis challenge to supply energy at defined affordable cost
to majority of the global population.
 Changes in complexity of fossil fuel (more from heavy oil and other unconventional sources),
available infrastructure to process such fluid and related complexity to downstream operations.
 Resource holder’s demand for partnership in prosperity & economic development and priorities of
energy companies
 Climate change concerns vis-à-vis Energy security.

38
CHAPTER 05
CONCLUSIONS

39
5.1 FINDINGS
 It has to its credit more than 570 discoveries of oil and gas with Ultimate Reserves of 3.13
Billion Metric tonnes (BMT) of Oil Plus Oil Equivalent Gas (O+OEG) from domestic
acreages. It has cumulatively produced 1042 Million Metric Tonnes (MMT) of crude and 715
Billion Cubic Meters (BCM) of Natural Gas.
 ONGC has discovered 7 out of the 8 producing Indian Basins, adding over 7.15 billion
tonnes of In-place Oil & Gas volume of hydrocarbons in Indian basins.
 ONGC produces over 1.26 million barrels of oil equivalent per day , contributing around
71% of India’s domestic production . of this , over 76%of crude oil produced is light and
sweet .the company holds the largest share of hydrocarbon acreages in India.

5.2 SUGGESTIONS
 ONGC as a corporate entity, is committed to fueling India's socio-economic . Should
concentrate more on Skill Development, Swachh Bharat and Rural Development .
 ONGC is the largest producer of oil and natural gas in India. It is one of the
best public enterprise(Maharatna PSU) in India to work and it should provide a service a a
reasonable price.

5.3 CONCLUSIONS
ONGC is the largest producer of crude oil, accounting for 69 per cent of the country’s production.
Significant efforts and resources of the Company are deployed for augmenting production of crude
oil from its offshore and onshore Assets. Accurate measurement and reporting of crude oil
production by the Company is of critical importance to assess and monitor its performance. Audit of
the crude oil measurement and reporting system indicated that the Company was reporting partially
stabilized crude oil as its crude oil production. This led to overreporting of crude production by
including items other than crude oil, namely, offgas, BS&W and recoverable internal consumption.
At the same time, the Company has reported ‘condensate’ production inappropriately as crude oil
production, though both products were distinct and treated differently by the Company.

40
5.4 LEARNING EXPERIENCE

I learnt a lot during this project ,it would be a great experience to know about the reputed company
and a largest oil company in India. This helped me gather huge amount of information based on the
industrial sector, it is a multinational company which plays a important role in the development of
the economy. It is an Indian government owned company,it spread worldwide and It was ranked as
a largest profit making company in India. ONGC is holding many sports team and they motivate the
young generation to come up with their talents. It is providing a subsidiaries to there employees.
Most of the shares of ONGC are hold by a government . recently they got a award of “Maharatna of
the year “ for their works.

41
 REFERENCES
 https://www.ongcindia.com/wps/wcm/connect/en/sustainability/energy-center/organisational-
structure/organisation-structure/
 https://www.ongcindia.com/wps/wcm/connect/en/home/
 https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation
 https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation#History
 https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation#Operations
 https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation#Joint_Ventures
 https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation#Products_and_services
 https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation#Awards_and_recognitions
 https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation#Awards_and_recognitions
 http://www.ongcindia.com/wps/wcm/connect/5b191428-a821-4096-9511-
d9173d0e0705/Q1_FY14_ONGC_OVL_MRPL.pdf?MOD=AJPERES
 http://www.ongcindia.com/wps/wcm/OngcHTML/Annual_Report_2012_13/Annual_Report_2012_13.pdf
 https://www.ongcindia.com/wps/wcm/connect/a52398aa-f384-4095-8b25-
d73dab24a017/Shareholding+Distribution+As+31.03.2020.pdf?
MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-a52398aa-f384-4095-8b25-d73dab24a017-
n8oycap
 http://www.ongcindia.com/wps/wcm/connect/ongcindia/Home/Company/History/
 http://www.ongcindia.com/wps/wcm/OngcHTML/Annual_Report_2012_13/Annual_Report_2012_13.pdf
 http://www.moneycontrol.com/company-facts/oilnaturalgascorporation/shareholding-pattern/ONG
 http://www.hindustantimes.com/business-news/cabinet-allows-ongc-to-buy-out-govt-stake-in-refiner-
hpcl/story-2oqzKRbSfScBDmCt3oiL2L.html
 https://indianexpress.com/article/india/ongc-employees-abducted-assam-7282475/

 UPSTREAM INDIA Fifty Golden Years of ONGC" by ONGC group publications year 2006 is official narrative of
the history of ONGC.

42
43