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The petroleum industry includes the global process of exploration, extracting and refining, transporting and marketing the petroleum product. The largest quantity products of the industry are fuel oil and Gasoline. Petroleum is also the raw material for many chemical products, including pharmaceuticals, fertilizers, solvents, pesticides and plastics. The oil industry is mainly divided into three major components: Upstream, Midstream and Downstream. Midstream operations are usually included in downstream industry.
Petroleum is vital to many industries, and is of the importance to the maintenance of industrialised civilization itself, thus is of great concern for many countries. Oil accounts for the very large percentage of oil consumption worldwide, ranging from a low 32% for Europe and Asia, up to a high of 53% for Middle East.
Challenges faced by Oil and Gas Industry
The oil and gas industry is totally a global industry. However, its underlying importance in India's growth cannot be ignored. Current business scenario has raised many challenges for oil and gas industry and policy makers.
In order to acquire and sustain competitive advantage, companies need to continuously innovate; un-learn; learn; restructure; and improve their core and support processes. It is not just enough to manage current processes; but go beyond the existing model and framework to question and reassess how value is created and delivered. Functional area challenges must be unique for this unique and growing industry.
- ONGC was ranked as the Numero Uno Oil & Gas Exploration & Production (E&P) Company.
- ONGC ranked 20th among the Global publicly-listed Energy companies as per “PFC Energy 50” (Jan 2008)
- ONGC is the only Company from India whose name appears in the Fortune Magazine's list of the World's Most Admired Companies 2007.
- Occupied 152nd rank in “Forbes Global 2000” 2009 list (up 46 notches than last year) of the elite companies across the world; based on sales, profits, assets and market valuation during the last fiscal. In terms of profits, ONGC maintains its top ranking from India.
- ONGC was ranked 335th position as per Fortune Global 500 - 2008 list; up from 369th rank last year, based on revenues, profits, assets and shareholder's equity. ONGC maintains has maintained top rank in terms of profits among seven companies from India in the list.
- the world, as per Platts 250 Global Energy Companies List in the year 2008 based on assets, revenues, profits and return on invested capital (ROIC).
REPRESENTS INDIA'S ENERGY NEEDS
ONGC has single-handedly scripted India's hydrocarbon saga by:
- Producing 6.61 billion tonnes of In-place hydrocarbon reserves with more than 300 discoveries of oil and gas; in fact, 6 out of the 7 producing basins have been discovered by ONGC: out of these In-place hydrocarbons in domestic acreages, Ultimate Reserves are 2.36 Billion Metric tonnes (BMT) of Oil + Oil Equivalent Gas (O+OEG).
- Simultaneously producing 788.273 Million Metric Tonnes (MMT) of crude and 463 Billion Cubic Meters (BCM) of Natural Gas, from 111 fields.
- ONGC has bagged 85 of the 162 Blocks (more than 50%) awarded in the 6 rounds of bidding, under the New Exploration Licensing Policy (NELP) of the Indian Government.
- ONGC's fully-owned subsidiary namely ONGC Videsh Ltd. (OVL) is the biggest Indian multinational company, with 44 Oil & Gas projects (7 of them producing) in 18 countries.
INDIA'S MOST VALUABLE PUBLIC ENTERPRISE
- It was 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)”.
- It was rated ‘Excellent' in MOU Performance Rating for 2006-07 by the Department of Public Enterprises, Ministry of Heavy Industries in Public Enterprises, GOI.
- Oil Industry Safety Directorate (OISD) has selected ONGC's Ahmedabad Asset and MRPL for the year 2006-07 (as number one in Group-4 category (Oil & Gas Assets) and Second in Group-1 Refinery category respectively).
- It has topped the visibility metrics in Indian Oil and Gas Sector and the only PSU in the top 10 list of Indian Corporate newsmakers.
- Golden Peacock was awarded to ONGC for the 3rd consecutive year.
- Won the coveted winner's trophy of the maiden “Earth Care Award for excellence in climate change mitigation and adoption” under the category of GHG mitigation in the small/medium and large enterprises.
- Awarded with “Infraline Energy Excellence Award” for its services to the Nation in Oil & Gas Exploration and Production category.
- Mr. R.S Sharma (CMD) was bestowed with “Amity Award for Excellence” in Cost Management.
- Holds largest share of hydrocarbon acreages in India.
- It contributes to over 80 per cent of Indian's oil and gas production.
- It contributes about one tenth of Indian refining capacity.
- It created a record of sorts by turning Mangalore Refinery and Petrochemicals Limited around from being a stretcher case for referral to BIFR to the BSE Top 30, within a year.
- It has interests in LNG and product transportation business.
- All crudes are sweet and most (76%) are light, with sulphur percentage ranging from 0.02-0.10, API gravity range 26°-46° and hence attract a premium in the market.
- Strong intellectual property base, information, knowledge, skills and experience
- Maximum number of Exploration Licenses, including competitive NELP rounds. ONGC has bagged 85 of the 162 Blocks (more than 50%) awarded in the 6 rounds of bidding, under the New Exploration Licensing Policy (NELP) of the Indian Government.
- It owns and operates more than 15000 kilometers of pipelines in India, including nearly 3800 kilometers of sub-sea pipelines. No other company in India, operated even 50 per cent of this route length.
- For focusing on core business of E&P, ONGC has following Objectives:
- To double Reserves.
- To improve average recovery from 28% to 40%.
The focus of management will be to monetize the assets as well as to assetise the money.
- ONGC posted a net profit of 161.26 million profits despite volatile market and crude prices.
- Net worth 781 million.
- Practically zero debt corporate.
Contributed over 280 million to exchequer.
THE ROAD AHEAD
- New discoveries and fast track development.
- Equity oil from abroad.
- Downstream value additions and forward integration.
- Leveraging state of art technologies and global best practices.
- New sources of energy.
- Production from small and marginal field.
SEGMENTATION OF THE ORGANISATION
Financial Highlights of the Organisation
Net Worth ( Rs Million)
NET PROFIT (RS MILLION)
TURNOVER (RS MILLION)
Contribution of Exchequer
When I started thinking for carrying out my research then the company whose name came first to my mind was of Oil and Natural Gas Corporation. The main reason for choosing this company was that this is amongst the fortune 500 companies and is called ‘Navratna'. The aim of the research was to gather information about this company. Researches basically are of two types: (1) Exploratory Research and (2) Conclusive Research. To fulfill the above mentioned objective I have carried out an exploratory research in the company. The table given below gives the details of my research journey.
It is important to have a preunderstanding when one would like to interpret and understand the collected material. Preunderstanding means prior knowledge of the subject, and one's experiences from the field. A person's experience can be extracted from both working and personal life and from others through books, reports and lectures.
Firstly, when one decides to prepare the design of the research then one has to consider that it would be a great idea if research is created in the way suitable to one's personality, skills and knowledge. Moreover, there are two methods, quantitative and qualitative, where one is not better than the other; it all depends on how the researcher would like to conduct study.
Quantitative method is recognized being scientific wherein researchers use mathematical and statistical surveys to investigate the phenomenon. Here, the focus is to explain cause and affect relationship and to be able to test whether hypothesis is applicable in reality. The measurement, tests and questionnaires are very controlled and the results lead to the generalization of the population. The researcher is seen as a outsider, and keeps a distance and objective view of the research.
In contrast, qualitative method is pigeonholed by the fact that one wants to understand people and how they experience their reality. Qualitative researchers investigate different parts of the context to create a visible whole. In addition, it involves fieldwork, description and discovering the meaning of the hypothesis, where the researcher plays an important role in collecting data. The data can be retrieved from interviews and observations, where generalization is made by comparing individuals. Researcher is an active part and considered as an insider which is subjective in one's judgement.
The method of my research is qualitative research.
There mainly two procedures for collecting information i.e. theoretical and empirical. Theoretical refers to the secondary data, which are collected or created by others where the purpose of that data might differ from our work. On the other hand, empirical data is primary data, which the writers of thesis collect directly to investigate the specific problem.
Theoretical data will be used to understand and interpret our research question, it will help us in broadening the base from which conclusion can be drawn. This type of information consists of books, historical studies, articles and online data, which need to be reviewed to see that whether it is useful to us and from reliable sources. To find suitable data I have referred ONGC's resources and literature.
Empirical data is collected in favour of research, with questions and objectives. It is important to decide which persons should be included in the study to see the accurate picture of the reality. As I had scarcity of time, I could conduct only one interview.
When the research is being conducted it is of utmost importance to make sure that that information is reliable and trustworthy, the reader must be able to trust the hypothesis being presented. When talking about validity and reliability in qualitative research one has to take ethical aspect into consideration to make fair judgement. To test the trustworthiness of the report there are three are three different categories, to judge the quality one uses internal-external validity, reliability.
Internal Reliability is how our findings match the reality, and if we as authors measure the things that are aimed to measured. Moreover, quality of research is an ongoing process; it always changes, due to the fact that what we study is how other people understand it.
External Validity is primarily reusing the findings in other situations, if is possible to generalise the result of the study. To develop the results from qualitative research in external way different strategies can be used. Starting with rich, thick description, where researcher must provide much material so that the reader can decide if their situation matches the research. Additionally, typically or modal category is to make detailed description of the studied phenomenon so that it can be compared with other categories. Finally, multisite designs the researcher uses as much information and data collection is possible so that the reader can use it in other situations.
Another aspect that must be considered is reliability, where the findings from research with same studied phenomenon, should reach the same conclusion, independent of the researcher. However, when it comes to qualitative studies, which we are using in our thesis, the reliability is hard to define though human behavior is investigated. Moreover, it can be hard to segregate and it could be explained “researchers seek to describe and explain the world as those in the world experience it.”
For conducting an empirical research I have conducted an interview of Mr. Vinod Kumar who works at ONGC as Chief Chemist in Sub-Surface Specialist pool. He has been working for this organisation for past 25years and has a plenty of knowledge and experience as he was posted in various departments at different places during his stint until now in this company. The interview draft given below gives the idea of the information gathered during this interview.
Company: Oil and Natural Gas Corporation Limited.
Interviewee: Vinod Kumar Dimri (Chief Chemist).
- Can you tell us shortly about your organization?
- What kind of position do you have in your company? What tasks do you perform?
- What are your working hours?
- How long have you been working for....(the ONGC)?
- How do you feel about your job?
- Can you influence your work/ company decisions?
- What is beneficial with your job? What are your benefits? (If there are any)
- What role do they play in your life?
- Can you tell something about the financial position of your organisation?
- Oil and Natural Gas Corporation is perceived as a leader in oil production industry.
- ONGC has a very efficient and professional management system.
- ONGC being an international company has sufficient resources and funds to invest.
- ONGC has ISO-9001 and ISO- 14001 registration.
- ONGC is finding difficulties in producing oil from ageing wells.
- Efficient energy utilization of buried coal reserve (700-1700M), estimated 63BT- Equivalent to 15000BCM.
- Upgradation of the existing reservoirs.
- Security of personnel and property especially crude oil remains a major concern in certain areas.
- In some exploration Campaigns Company uses high technology, high investment at very high risk.
After studying the details of ONGC LTD I reached at conclusion that ONGC has achieved its entire goal with its idea and unique idea. ONGC has good manpower and provides good facilities to its employees. The majority of company's profitability ratios shows upward trend. The performance of the company can be considered as considered as satisfactory. As per my opinion ONGC has a wide scope to develop in future.