A

PROJECT REPORT

ON

“A brief study on strategic planning of ONGC”

IN PARTIAL FULLFILLMENT OF THEREQUIREMENT OF THE AWARD FOR THE DEGREE OF

POST GRADUATION DIPLOMA IN MANAGEMENT

Approved by AICTE

SUBMITTED TO

Mr. SANJAY SRIVASTAVA

SUBMITTED BY

SHREY SAXENAENROLMENT NO. 1413

PGDM 5TH TRIMESTER

INTERNATIONAL INSTITUTE FOR SPECIAL EDUCATION,

LUCKNOW

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ACKNOWLEDGEMENT

I take this opportunity to express our deep sense of gratitude to all those who have

contributed in making my report a success. Every project is a blend of efforts and learning on the

part of students and knowledge and experience of the experts in their respective fields.

I would like to express my sincere gratitude and thanks to Mr. Sanjay Srivastava for his

support and guidance during my report

I express my profound sense of gratitude and indebtedness towards all of them for

providing every information, assigning various task, guidance, appreciating and correcting us

thought our project period.

Last but not the least; I would like to express gratitude to all the friends and colleague

who helped me throughout the period and gave me proper response and co-operating in our

various activities with their patience.

PLACE: Lucknow

DATE: Shrey Saxena

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DECLARATION

I Shrey Saxena, hereby declare that the report entitled “A brief study on strategic planning of

ONGC” is the result of our own work and our indebtness to other work publications, references,

if any, have been duly acknowledged.

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Content

Sr. no. Topic Page no.

1 Strategic planning 5

2 Introduction to company 7

3 Strategic management of ONGC 10

4 Strategic planning of ONGC 14

5 Production strategies of ONGC 15

6 Bibliography 17

Strategic Planning4 | P a g e

Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful.

Strategic Plan

A strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise. 

Strategic Management and Strategy Execution

Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change.  Strategy Execution is basically synonymous with Strategy Management and amounts to the systematic implementation of a strategy.

Steps in Strategic Planning & Management

There are many different frameworks and methodologies for strategic planning and management. While there is no absolute rules regarding the right framework, most follow a similar pattern and have common attributes. Many frameworks cycle through some variation on some very basic phases: 1) analysis or assessment, where an understanding of the current internal and external environments is developed, 2) strategy formulation, where high level strategy is developed and a basic organization level strategic plan is documented 3) strategy execution, where the high level plan is translated into more operational planning and action items, and 4) evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs. 

Attributes of a Good Planning Framework

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The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association dedicated to advancing thought and practice in strategy development and deployment, has developed a Lead-Think-Plan-Actrubric and accompanying Body of Knowledge to capture and disseminate best practice in the field of strategic planning and management. ASP has also developed criteria for assessing strategic planning and management frameworks against the Body of Knowledge.

These criteria are used for three primary purposes:

Ensure that the ASP Body of Knowledge is continuously updated to include frameworks that meet these criteria.

Maintain a list of qualifying commercial and academic frameworks recommended for study and training, to prepare participants to sit for the three ASP certification examinations.

Provide a resource and “check list” for practitioners as they refine and improve their organization’s systems and for consultants as they improve their product and service offerings.

The criteria developed by the ASP are:

Uses a Systems Approach that starts with the end in mind.

Incorporate Change Management and Leadership Development to effectively transform an organization to high performance.

Provide Actionable Performance Information to better inform decision making.

Incorporate Assessment-Based Inputs of the external and internal environment, and an understanding of customers and stakeholder needs and expectations.

Include Strategic Initiatives to focus attention on the most important performance improvement projects.

Offer a Supporting Toolkit, including terminology, concepts, steps, tools, and techniques that are flexible and scalable.

Align Strategy and Culture, with a focus on results and the drivers of results.

Integrate Existing Organization Systems and Align the Organization Around Strategy.

Be Simple to Administer, Clear to Understand and Direct, and Deliver Practical Benefits Over the Long-Term.

Incorporate Learning and Feedback, to Promote Continuous Long-term Improvement.

Introduction of Company6 | P a g e

(Oil &Natural Gas Corporation):

Oil and Natural Gas Corporation is a public sector petroleum company involved in wide scale exploitation of oil as well as natural gas from the Indian mainland as well as from Arabian Sea and Indian Ocean.

ONGC is one among the Indian Government’s Navarathna Companies which involves the most profit making nine public sector companies and hence is one of the most profit making companies in India.

Oil and Natural Gas Corporation Limited (ONGC India) is considered Asia's best Oil & Gas Company. It ranks as the second biggest E&P company (and first in terms of profits), as per the Platts Energy Business Technology (EBT) Survey 2004. It ranks 24th among Global Energy Companies by Market Capitalization in PFC Energy 50 (December 2004). ONGC was ranked 17th until March 2004, before the shares prices dropped marginally for external reasons.

Oil and Natural Gas Corporation Limited was first set up as a commission on August 14, 1956. The Company later on became corporate on Feb, 1994. The company now has become into Exploration and Production Company of the highest quality. ONGC was the first corporate to register a five digit profit figure in the year 2002-03. It contributes to economy of India about more than 70% of India’s Crude Oil Production and more than 75% of India’s Natural Gas Production.

ONGC Ankleshwar is located in western part of India and its main objectives are production, exploration, development and distribution of petroleum. Its drilling site is located at different places viz. Gandhar near Ankleshwar, Hajira near Surat.

There are as many as 4000 employees in the company. It has very large area. Company provides nice canteen facilities, which provides goods food and refreshments items for the employees. Company has also a township build up for its employees which provides accommodation, sport and recreation facilities to its employees. Security facility is also outstanding. Families of employees are given free medical treatment and educational support.

The first well was drill by ONGC in 1957 at Jwalamukhi in North West Himalayan foothills. The onshore Ankleshwar giant field was discovered in 1960. Gas stock at mannera tibba in Rajasthan in 1967.

Ankleshwar Asset located in south Gujarat region in Bharuch District is the largest. It is being spread through out Contiagal, Kim, Jalod, Rajpardi, Gandhar, Dahej, Nada, Kavi, Dupka, Alamgir oil fields.

The Asset has two main fields: Ankleshwar field and Gandhar field. While Ankleshwar is the old field and the gandhar is the new one discovered in 1984.

In offshore giant oil and gas field “Bombay high” was discovered in 1974. Operation of ONGC started in early sixties. With its registered office at New Delhi, ONGC has offices in seven cities and training institutes in four locations.

Foundation:

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In August 1956, the Oil and Natural Gas commission was formed. Raised from mere directorate status to commission, it had enhanced powers. In 1959, these powers were further enhanced by converting the commission into a statutory body by an act of Indian Parliament.

Oil and Natural Gas Corporation Limited (ONGC) (incorporated on June 23, 1993) is an Indian Public Sector Petroleum Company. It is a fortune global 500 companies ranked 335th, and contributes 51% of India’s crude oil production and 67% of India’s natural gas production in India. It was set up as a commission on August 14, 1956. Indian government holds 74.14 % equity stake in this company.

ONGC is one of Asia’s largest and most active companies involved in exploration and production of oil .It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India. It produces 30% of India’s crude oil requirement. It owns and operates more than 11,000 kilometers of pipelines in India. In 2010, it was ranked 18th in the Platts Top 250 Global Energy Company Rankings and is ranked 413st in the 2012 Fortune Global 500 list. It is the largest company in terms of market cap in India.

Vision

To be a World Class, Oil and Gas Company integrated in Energy business with dominant Indian

leadership and global presence.

Mission

World Class

Dedicated to excellence by leveraging competitive advantages are Research and

Development and technology with involved people.

Imbibe high standards of business Ethics and organization Values.

Abiding Commitment to health, safety and environment to enrich quality of community

life.

Foster a culture of trust, openness and Mutual content to make working a stimulating and

challenging experience for one people.

Strive for customer delight through quality products and services.

Integrated in Energy business

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Focus on domestic and international oil & 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.

Size of the unit and form of organization

Generally size of the unit is based on the total investment and total employment made by

particular unit. While form of organization is decided on the basis of internal relationships,

authority and responsibility to concerned departments.According to latest small-scale industry

which is having investment more than 100 corers plant and machinery is considered as large-

scale unit. While the employment made by particular industry is based on factory act. Factory

act shares the detailed information regarding the employment for different industry. As the

ONGC Ltd. Having approximately 26,000,000,000 as per the factory act thus ONGC is a large

scale unit and it gets the benefit that every scale unit gets.ONGC Ltd. Company. Its shares

available in stock market fir purchase and resale by public. It is also public sector unit.

CORE VALUES

SENSE OF BELONGING

There should be a sense of commitment loyalty and sense of ownership of the job and

company properties.

There should be improvements in personal work area as a self-starter.

There should be quality individual work and value addition.

There should be a sense of pride in company.

INTEGRITY

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Personal / Professional integrity is strictly abiding by rules and regulations.

Processing / deciding cases in an unbiased / dispassionate way.

Sense of ethics in behaviour and interpersonal and professional interaction.

TEAM-SPIRIT

Employees should be working in groups, with trust and openness.

There should be proper cooperation, communication between employees and employees,

employer and employer, employer and employee.

Employees should share knowledge and information there should be collective learning

between them.

There should be target consciousness, cost and quality consciousness between employees

and employer.

DISCIPLINE:

There should be punctuality, work ethics, dress code and self discipline.

Enforcing discipline in a fair and firm manner.

SOCIAL RESPONSIBILITY:

Caring of society and environment, projecting a lofty image of ONGC to society.

STOP CORRUPTION:

By not acception / giving bribes in cash / kind.

By not harassing any body.

By taking decisions upon objective reality.

Strategic management of ONGC10 | P a g e

Strategic analysis, design and direction

• What is strategic management and why is it important?• Generic upstream and downstream petroleum strategies• Exercise: identifying strategic objectives• Analyzing strategic environments – external and internal • Resources’ capabilities– financial, human, facilities and data • Commonly used strategic analysis techniques• Strategy and business development • Exercise: SWOT analysis • Recognizing and exploiting synergies and alliances • Identifying and focusing upon core competencies • Teams, teamwork, leadership and motivation • Exercise: teams and joint ventures in competition • Strategic options and organizational design • Extracting value along oil and gas supply chains • Competitive strategies in refining and fuel retailing

Strategic risk and opportunity management

• Building and monitoring business plans and budgets • Identifying uncertainty: risks and opportunities • Case Study (with video): Understanding asset risks of transnational pipelines • Contingencies to cover probability-of-occurrence extreme-impact risks • Exercise: oil and gas hedging strategies using derivatives • Measured management, benchmarking and key performance indicators • Exercise: rationalize an upstream oil and gas asset portfolio • Optimizing performance of oil and gas asset portfolios • Distinguish portfolio risks from asset risks • Exercise: asset correlation (dependency) and risk • Diversification, balance and asset combinations to reduce risk • Exercise: asset diversification to reduce risk • Measurements of uncertainty that do not penalize the upside opportunity• Exercise: complexity of quantifying risk • Efficient frontiers and feasible envelopes applied to portfolio decision-making • Portfolio optimisation linked to quantified corporate strategies • Simulation and statistics to quantify strategic portfolio performance • Acquisitions, divestments and mergers to improve strategic performance

Managing strategic change and human obstacles to change

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• Corporate dynamics and inherent resistance to change • Exercise: promoting a global mind-set to recognize opportunities • National oil company strategies and competencies • Balanced scorecard approach aids the implementation of strategic change • Aligning operations, accountability and sustainability to strategy • Consequence of major accidents (with video) • Linking strategy and enterprise risk management • Multi-directional communications throughout organisations • Exercise: strategic issues for asset performance reviews and business plans • Cultural issues – corporate and national• Integrating qualitative and quantitative analysis • Improving quality and timing of decision-making: decision trees • Applying strategy to direct business planning and budget cycles • Overcoming human obstacles to strategic change

Any process industry can be solely divided into 4 parts:

1. Process plant2. Utilities3. Environmental system4. Safety system

1. Process Plant: This part consist the basic purpose of that process industry for which it has been established. ONGC Uran plant basically produces LPG and other value added products and pumps the stabilized oil to different refineries. In sum to get this purpose there is overall two plant:a) Co-generation Plantb) Oil and Gas process Plant

Co-generation plant can be also sub divided into mainly 3 different process units: Gas Turbine Boilers(heat recovery steam generation) Gas fired boilers

Oil and gas process plant can be sub divided into 6 different processing units:

Slug catcher unit Condensate fractionation unit Gas sweetening unit Crude separation unit LPG recovery unit Ethane propane recovery unit

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2. Utilities: Utilities plays very important role in any process industry. They provide support

to process plant for the smooth running and continuous production as in our case. The basic utilities which are very necessary in our case are: Effluent treatment Instrument air Air dryer Flare system Blow down system Soft water system Fuel gas Inert gas system

3. Environment System:This system monitors the effect of plant on environment by continuous

monitoring inside and outside surrounding of plant and always tries to maintain a minimum national standard of different environmental parameters. If this minimum standard is not achieved by the plant then government has to shut that industry as per environmental law. It can be also categorized in two parts:

Primary environmental system:It is directly related to the health precaution and keeps on check on severe affect

on environment like the surrounding temperature, H2S gas concentration in the atmosphere, suspended particles and carbon concentration etc. as these changes affect the people and works health working or living in the surrounding of the planet. Secondary environmental system:

This system is not related to health but works for the sake of environmental protection and welfare. Plantation, nitrogen’s oxide removal system comes under this system category.

4. Safety system: This system maintains the safe working condition in this plant is very much prone

to fire as the air in the surrounding contains lots of hydrocarbon and oil vapours. So any small spark can produce large scale destruction. This system consist of

Firewater unit Gas detection unit

Strategic planning of ONGC

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Strategic analysis, design and direction

• What is strategic management and why is it important?• Generic upstream and downstream petroleum strategies• Exercise: identifying strategic objectives• Analyzing strategic environments – external and internal • Resources’ capabilities– financial, human, facilities and data • Commonly used strategic analysis techniques• Strategy and business development • Exercise: SWOT analysis • Recognizing and exploiting synergies and alliances • Identifying and focusing upon core competencies • Teams, teamwork, leadership and motivation • Exercise: teams and joint ventures in competition • Strategic options and organizational design • Extracting value along oil and gas supply chains • Competitive strategies in refining and fuel retailing

Strategic risk and opportunity management

• Building and monitoring business plans and budgets • Identifying uncertainty: risks and opportunities • Case Study (with video): Understanding asset risks of transnational pipelines • Contingencies to cover probability-of-occurrence extreme-impact risks • Exercise: oil and gas hedging strategies using derivatives • Measured management, benchmarking and key performance indicators • Exercise: rationalize an upstream oil and gas asset portfolio • Optimizing performance of oil and gas asset portfolios • Distinguish portfolio risks from asset risks • Exercise: asset correlation (dependency) and risk • Diversification, balance and asset combinations to reduce risk • Exercise: asset diversification to reduce risk • Measurements of uncertainty that do not penalize the upside opportunity• Exercise: complexity of quantifying risk • Efficient frontiers and feasible envelopes applied to portfolio decision-making • Portfolio optimisation linked to quantified corporate strategies • Simulation and statistics to quantify strategic portfolio performance • Acquisitions, divestments and mergers to improve strategic performance

Managing strategic change and human obstacles to change

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• Corporate dynamics and inherent resistance to change • Exercise: promoting a global mind-set to recognize opportunities • National oil company strategies and competencies • Balanced scorecard approach aids the implementation of strategic change • Aligning operations, accountability and sustainability to strategy • Consequence of major accidents (with video) • Linking strategy and enterprise risk management • Multi-directional communications throughout organisations • Exercise: strategic issues for asset performance reviews and business plans • Cultural issues – corporate and national• Integrating qualitative and quantitative analysis • Improving quality and timing of decision-making: decision trees • Applying strategy to direct business planning and budget cycles • Overcoming human obstacles to strategic change

Production strategies of ONGC

Step 1.

A Geologist & Geophysics survey was conducted by Sub Surface team for the searching of Reservoir rocks which are tracked in the mother earth. They usually search for tracked reservoir because they have tendency to remain at one place for years. Extracting fossil fuel from them become easier as they are placed at one place.

Step 2.

Once the survey is done, an accurate estimation is done based on the data available. On the basis of estimation a production facilities and other installation is made at that particular field.

Step 3.

After installation of production facilities drilling process start. They do drilling by two ways:

Vertical Oil Well Drilling Directional Oil Well Drilling

At the bottom of the Rig, One cutting machine is there which is called the BIT. It is used to cut the heavy stones while drilling. The bit is made up of diamonds which is helpful in the cutting of the stones.

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Step 4.

Once the drilling is completed, tubing pipes is used to extract crude oil and other hydro carbon from the earth. Along with Tubing pipes, Casing pipes are also attached with it to provide support to it.

Step 5.

The crude oil extract from well is transferred to GGS (Group Gathering Section) for separation of Natural Gas from Crude Oil. GGS is a separator which have dome like structure from which Natural Gas is separated from upper side of machine as it is light as compared to Crude Oil. The Natural Gas separated is transfer to GAIL. The Crude Oil that remains is the mixture of Crude oil and Water.

Step 6.

The mixture of Crude oil and water is transfer to CPF (Central Processing Facilities). CPF is Heater-Treater machine water is burnt without allowing oxygen to enter in process in order to convert water into gas so that water can be separated from crude oil.

Step 7.

The crude oil after processing in CPF is ready for sale which is transferred to Refineries such as IOCL, BPCL & HPCL through pipelines.

Bibliography

www.ongcindia.com

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www.google.comwww.investopedia.comwww.businessportfolio.com

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