ONGC's Growth Strategy

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"ONGC, the most valuable company in India by market capitalization, is on a high growth trajectory. It is on its way to be a truly integrated oil and gas player." ¹

- Jigar Shah, Head, Research Wing, KR Choksey Shares & Securities Pvt Ltd.

"In the coming six to seven years' time, one would see ONGC on an assured growth path. It should have increased production and recovery factor, reserve accretion, best-in-class technology, competent, motivated human resource and strong financials. I would like ONGC to meet India's hydrocarbon needs to the maximum possible extent. I would also like to see ONGC recognized within and outside the country, for its competencies and achievements. We should be accepted globally as one of the best E&P companies." ²

- Subir Raha, Chairman & Managing Director, ONGC.

Introduction

The Oil and Natural Gas Corporation Limited (ONGC) was the largest oil exploration and production (E&P) company in India. The company enjoyed a dominant position in the country's hydrocarbon sector with 84 per cent market share of crude oil & gas production. Around 57 per cent petroleum exploration licenses in India for over 588 thousand sq. km belonged to ONGC.

The company was the first to achieve Rs 100 bn net profits in the Indian corporate history. ONGC's major products included petroleum, crude natural gas, liquefied petroleum gas (LPG), kerosene and petrochemical feedstock. For the fiscal year ended 2002-03, the company reported gross revenues of Rs 353.872 bn and net profit of Rs 105.293 bn. With market capitalization of US$ 15 bn, ONGC was ranked 260 in BusinessWeek's Global 1000 list of the world's top companies by market value, for 2003-04. Since the mid 1990s, ONGC had faced the problem of declining crude oil and gas production. The company made efforts to consolidate its position in the business by acquiring foreign oil equity through its wholly owned subsidiary, ONGC Videsh Limited (OVL).

OVL was formed to help ONGC secure a strong foothold in the international oil market. With the acquisition of Mangalore Refinery and Petrochemicals Limited (MRPL), ONGC became the first integrated oil company in India.

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1] "Analysts upbeat about the future of ONGC," www.ongcindia.com, June 28, 2003.

2] Drilling & exploration world, Volume 11, No. 10, August 2002.