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ASSIGNMENT

Submitted by

MANU ANTONY

2ndMBA

MIIM

KUTTIKANAM

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1.What are the gr!th "trategie" ad#ted by ONG$%

The case describes the growth strategy and

diversifcation plans o the Government owned Oil

and Natural Gas Corporation Limited (ONGC) the

largest oil e!ploration and production ("#$) company

in %ndia& ONGC has near monopoly in %ndia's oil "#$

industry producing nearly percent o the country's

crude oil and natural gas& Till the late *s thecompany was mainly confned to upstream activities

o "#$& %n order to reduce ris+s inherent in confning

to one activity and to achieve fnancial stability and

steady growth ONGC ac,uired a ma-or e,uity sta+e

in .angalore /efnery and $etrochemicals Limited so

as to enter the downstream activities o refning&

0ith this ONGC became the frst integrated oil

company in %ndia& The case e!amines the benefts

and drawbac+s o oil "#$ Company entering into

refning and retailing businesses& The case also

discusses the possible benefts and disadvantages o

ONGC's plans in 12 to enter insurance power

generation and shipping businesses as part o its

diversifcation program&

The Oil and Natural Gas Corporation Limited (ONGC)was the largest oil e!ploration and production ("#$)

company in %ndia& The company en-oyed a dominant

position in the country's hydrocarbon sector with 32

per cent mar+et share o crude oil # gas production&

4round 56 per cent petroleum e!ploration licenses in

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%ndia or over 533 thousand s,& +m belonged to

ONGC&

The company was the frst to achieve /s * bn net

profts in the %ndian corporate history& ONGC's ma-orproducts included petroleum crude natural gas li,uefedpetroleum gas (L$G) +erosene and petrochemicaleedstoc+& 7or the fscal year ended 1189 thecompany reported gross revenues o /s 959&361 bn andnet proft o /s *5&19 bn& 0ith mar+et capitali:ation o; in ?usiness0ee+'sGlobal * list o the world's top companies by mar+et

value or 1982&

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?oth companies had meagre oil e!ploration outputs asma-or parts o %ndia were deemed unft or e!ploration ooil and gas resources& %n October *5 the body receivedurther elevation both in status and powers with the

Commission being converted into a statutory body by anact o $arliament& This act came to be +nown as theONGC 4ct in *5&

4ccording to the act Oil and Natural Gas Commission'smain unctions were to plan promote organi:e andimplement programmes or the development o$etroleum /esources and the production and sale o

petroleum and petroleum products produced by it and toperorm such other unctions as the Central Governmentmay rom time to time assign to it&&&

Conclusion

ONGC tried to overcome the declining production o

oil and natural gas by ocusing on new domestic

production enhancement programs o@shore

e!ploration and technology upgradation& To improveproductivity and fnancial perormance ONGC

concentrated on human resources development and

fnancial restructuring& 7or the fscal year 1285

ONGC planned to spend appro!imately /s * bn on

capital e!penditure relating to e!ploration and

development o domestic oil and gas properties& 4s

part o production enhancement redevelopment o

?ombay Bigh oil wells was given top priority& This

involved two pro-ects called ?ombay Bigh North

/edevelopment and ?ombay Bigh

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additional 6> mn tonnes o producible reserves o oil

and gas& ONGC e!panded its global operations

through its subsidiary OAL by ma+ing si:eable

capital investments in Aietnam

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programmes or the development o $etroleum

/esources and the $roduction and

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or other oils in any orm asphalt bitumen or similar

substances or natural gas chemicals or any

substances used or which is thought li+ely to be

useul or any purpose or which petroleum or any

oils in any orm asphalt bitumen or similar

substances or natural gas is or could be used or to

that end to organise e,uip or employ e!peditions

commissions e!perts and other agents and to sin+

wells to ma+e boring and otherwise to search or

obtain e!ploit develop render suitable or trade

petroleum other mineral oils natural gas asphalt or

other similar substances or product thereo&

>& To underta+e assist encourage or swap or

promote the production o petroleum resources and

to carry on in all their respective branches all or any

o the business o producing treating (including the

redefning o crude oil) storing transportation

importing e!porting swapping and generally dealing

in or with petroleum or other crude oils asphaltbitumen natural gas refnery gasses li,uefed

petroleum gas and all other +ind o petroleum

products chemicals and any such substances

aoresaid&

6& To carry on all mar+eting and distribution o all

+inds o petroleum products and to purchase orotherwise ac,uire manuacture refne treat reduce

distil blend puriy and pump store hold transport

use e!periment with mar+et distribute e!change

supply sell or otherwise dispose o import e!port

and trade and generally deal in any and all +inds o

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petroleum products oil gas and other volatile

substances&

3& To carry on all or any o the businesses o the sale

and purchase o petroleum and other crude oil

asphalt bitumen natural gas li,uefed petroleum

gas chemicals and all +inds o petroleum products

treat and turn to account in any manner whatsoever

petroleum and other crude oils asphalt bitumen

natural gas li,uefed petroleum gas and all +inds o

petroleum products chemicals and any such

substance as aoresaid&

& To establish provide maintain and perorm

scientifc technical engineering pro-ect

management consultingEcontacting services

including but without limiting to technical studies

design construction maintenance repair all +inds o

wor+s and buildings procurement inspection

e!pediting management o construction and relatedservices or petroleum reservoir storage and

transportation o oil gas and other minerals by

pipeline in or otherwise seismic data ac,uisition

interpretation logging drilling cementing other oil

felds related e,uipment&

*& To promote organise or carry on the business oconsultancy services in any feld o activity in which

the Company is engaged in or connected therewith&

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+.$m#are and )ntra"t bet!een gr!th and )urrent ")enari%

The scenario at ONGC during the growth stagewas as ollowsI

million over the

previous fnancial year) towards the under8recoveries o

Oil .ar+eting Companies& 19 ONGC Aidesh Limited

(OAL) the division o ONGC concerned with its oreign

assets ac,uiredTalisman "nergy's 15J sta+e in the

Greater Nile Oil pro-ect&

%n 1> a commemorative coin set was issued to mar+the 5th anniversary o the ounding o ONGC ma+ing it

only the second %ndian company (

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%n 1** ONGC applied to purchase 1 acres o land

at Kahanuto process o@shore gas& ONGC Aidesh along

with

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