ONGC: Fuelling The Nation
Oil And Natural Gas Corporation (ONGC) is the largest crude oil and natural gas company in India, contributing around 75 per cent to domestic production with a total consolidated turnover Rs 453,461 crore for FY19 (up 25 per cent from Rs 3,62,246 crore in FY18).
Fiscal 2019 was yet again a year of growth for ONGC and its business. Internationally as well, it was a period of steady recovery in the oil and gas sector as crude oil prices stabilised at levels higher than a year ago and exploration and production recorded impressive numbers.
During the year, ONGC made a total of 13 discoveries of which 8 were on-land and 5 in off-shore areas. More importantly, the company monetised 5 of those discoveries during the year itself. Reserve accretion for the year stood at 63 MT of oil equivalent on 2P basis and a reserve replacement ratio of 1.4 means that we replenished more than the total quantum of hydrocarbon produced during the period.
In terms of financial performance, ONGC recorded a gross revenue of Rs 1,09,654.6 crore in FY19, compared to Rs 85,004.1 crore in FY18. Net profit touched a record high at Rs 26,715.8 crore (an increase of 34 per cent compared to FY18 which was at Rs 19,945.3 crore).
The company recently adopted ‘Energy Strategy 2040’, in this regard the CMD, Shashi Shanker, while presenting the annual report stated, “It envisions ONGC as a diversified energy company with strong contribution from non E&P businesses; 3 folds revenues and 5-6 folds market capitalisation.” He further stated that this aims to transform ONGC into a future-ready energy entity, one that positions itself well to respond to the challenges and opportunities of the tomor-row’s energy scene. Ofcourse, technology, digitalisation of operations, meaningful partnerships and organisational restructuring will play critical roles in the successful implementation of the plan, he added.
ONGC began as the Oil and Natural Gas Directorate of the Union Ministry of Natural Resources and Scientific Research in 1955. The Directorate was converted into a Com-mission and christened Oil & Natural Gas Commission on 14 August 1956. In 2010, the government conferred the Maharatna status on ONGC.
One of the most valued E&P company in the world, it produces approximately 75 per cent of India’s crude oil and stands as one of the highest profit-making and dividend-paying enterprises. Its international arm, ONGC Videsh, has participation in 41 projects across 20 countries. Acclaimed for its corporate governance practices, Transparency International has ranked ONGC 26th among the biggest publicly traded global giants.
Even as ONGC expands and diversifies its business, it remains steadfast in its commitment to equitable value-creation for all its stakeholders, and a healthy and consistent dividend payment track record is part of this business philosophy, said Shanker.
In fact, Shanker pointed out that even through the downturn, when the service sector cost deflated, ONGC had not implemented any cuts in its budget. “While the focus on ‘doing more with less’ has gained substantial support in the E&P community in the aftermath of the oil price crisis, it is also true, at least in the case of our country, producing every additional barrel of oil has also become difficult, complex and costly.”
The energy giant believes in impacting the lives of people positively, its CSR spends in FY’19 were Rs 614 crore, targetting areas such as healthcare, poverty, environment, women empowerment and also heritage preservation.
