E&P Performance

New Delhi
22nd May 2008
Presentation overview

6 Exploration
6 Production
6 IOR/ EOR
6 Marginal fields
6 Technology & Alliances
6 Concerns
6 Growth perspectives

3
• Exploration
 Exploration

India has 7 producing Basins; ONGC discovered 6

1889: Assam Shelf *

1967: Rajasthan Basin

1973: A&AA FB

1958: Cambay Basin

1980: KG Basin

1974: Mumbai Offshore

1985: Cauvery Basin

5
* By AR & T Co. - Assam Railways and Trading Company Ltd.
Oil & Gas Discovery in India (up to 31.03.2007)
ONGC Accounts for > 72% of hydrocarbon discovery Initial In-place: Oil
in India (Oil:77%; Gas:62%)

6 ONGC: 72%
6 OIL: 11% ONGC
OIL
12%
6 Pvt./JV:17% 77%
Pvt/JV
11%
Last 10 years In-place Reserves: 2,421 MTOE (India)
6 ONGC: 48%
6 OIL: 8% Initial In-place: Gas
6 Pvt./JV: 44%
OIL
9%
Last 5 years In-place Reserves: 1,626 MTOE (India)
ONGC

6 ONGC: 42% 62% Pvt/JV

29%

6 OIL: 7%
6 Pvt./JV: 52%
Source: MoP&NG
6
 Highest Reserve Accretion in Decade

200
182.23
160

120

80

40

0
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Initial Inplace (MTOE) Ultimate (MTOE)

6 Highest IIP Accretion in last 10 years (182.23 MTOE or 1,336 Million

Barrels), with 63.82 MTOE of Ultimate Reserve (UR) Accretion.

7
ONGC: RRR

6 ONGC RRR >= 1 in successive Four years

– Average last 10 years: 1.02
– Average last 5 years: 1.09
2007-08 1.32

2006-07 1.35

2005-06 1.10

2004-05 1.00

2003-04 0.68

2002-03 0.81

2001-02 1.36

2000-01 1.36

1999-00 0.72

1998-99 0.51

RRR: Reserve Replacement Ratio

8
 2007: ONGC RRR Benchmarked
Maintaining RRR over 1 (one) is a global challenge
189%

131% 136% 135%

109%
84%
76%

22% 27%
17% 11%

Chevron
Total

ENI

ONGC
StatoilHydro
PetroChina
ExxonMobil

RD Shell

BP

Petrobras
ConcoPhillips

6 RRR of ONGC & ONGC Group (ONGC+OVL) in 2007-08: 132% & 1.94%
respectively
9
Source: PFC Energy & ONGC data (for 2006-07)
Finding cost Benchmarked

Finding cost ($/boe): 3 years rolling 2005-07

22.79
19.36

7.89 8.47
7.09
5.07 5.52
3.99
1.86 2.14
1.72 ConcoPhillips
ExxonMobil

RD Shell

Chevron

StatoilHydro
ENI
PetroChina
Total

ONGC
Petrobras
BP

10
Source: PFC Energy & ONGC data
ONGC appoints D&M

6 ONGC appoints D&M for ‘Post Drill

Analysis Report (PDA)’ of 579 wells
drilled since 2002
6 Phase-I: 350 wells drilled between
2002-05

Observations:
6 348 wells or 99.4% ranked at >2.5
(Satisfactory)
6 97.5% of activities scored >2
(Completed adequately)
6 90.5% of Individual Aspects ranked >
2.0

Observations:
Often one needs to have
6 Overall ranking has improved from
a look at the mirror…
3.01 in 2002 to 3.20 in 2005
How fit you are!!

11
Muhammad Ali- looking at Mirror
Photo: Neil Leifer
ONGC appoints D&M

It is up to you…

How do you look at it…

330/ 350 or 20/350 !!

12
• Production
Rising O+OEG Production

+1.76% (2007-08/2006-07)
CAGR in last 5 years: 2.9%
70
MTOE
PSC JVs OVL
60
ONGC
50

40

30

20

10

0
87-88 89-90 91-92 93-94 95-96 97-98 99-00 01-02 03-04 05-06 07-08

14
Oil & Gas Production

ONGC
25.95 22.33
2007-08

(-0.44%)
26.05 22.44
2006-07

Oil (MMT) Gas (MTOE)

OVL
6.83 1.93
2007-08

(+10.21%)

5.80 2.15
2006-07

Oil (MMT) Gas (MTOE)

15
Lifting cost Benchmarked

Lifting cost ($/boe): 3 years rolling 2005-07

16.11

9.53
8.88 7.97
8.37
6.03
5.94 5.68
5.14 4.89
4.02

ConcoPhillips
ExxonMobil

RD Shell

StatoilHydro
Chevron

ENI
PetroChina
Total

ONGC
Petrobras
BP

16
Source: PFC Energy & ONGC data
OVL: Operation

Sourced: 8.761 MTOE of Equity Oil & Gas

12 New projects in FY 08

Business relationship with three new countries: Totaling 18

After oil Discovery at North Ramadan, Egypt; Farsi Offshore,

Iran- OVL strikes oil & Gas at Najwat Najem Block, Qatar

17
 OVL: Operation
38* Projects in 18 Countries 24 Exploration 6 Development 7 Producing

Venezuela 1
1 Russia
Cuba 2
2 3 Myanmar
Colombia 3 1
1 2 Vietnam

Brazil 2 1
1 Turkmenistan

Libya 3
1 Iran
Nigeria 2
1 Qatar
Nigeria JDZ 1
1 Iraq
Congo Br 1
1 1 Syria
Sudan 1 2
* 38th project is Sudan’s 741 km long completed Pipeline
18 Egypt 2
Operation: MRPL
MRPL: A Mini Ratna (Category-1) Company

129.5% capacity Utilization:

Highest so far

Highest ever Turnover:

Rs. 37,339 cr. (+14%)

Highest ever Profit:

Rs. 1,272 cr. (+142%)

“CCR AAA” Rating:

Reaffirmed by CRISIL

19
• IOR/ EOR
Managing matured fields
IOR/ EOR projects

Projects completed Projects under implementation

6 MH North (Dec’2006) 6 Heera Ph-2
6 MH South (May’2007) 6 Sobhasan
6 Neelam (Jul’2005) 6 Kalol
6 Heera Ph-1 (Dec’2003) 6 Lakwa-Lakhmani
6 Balol (Nov’2001) 6 Geleki
6 Santhal In-situ (Dec’2001) 6 Rudrasagar
6 Santhal – IOR (Nov’2003)
6 Jotana (Oct’2004)
6 North Kadi-1 (Apr’2007)
6 North Kadi-2 (Nov’2006)
6 Sanand EOR (Sep’2002)
6 Gandhar IOR (Jun’2005)

21
Managing matured fields
35

30
Gain through IOR/ EO
R ~ 40 MMT
25
(110 MMT envisaged
by 2030)
20

15

Offshore
10

5
Onshore
0
19 6 1- 6 2 19 8 4 -8 5 2 0 0 7- 0 8

• 15 major fields: Producing 60% of country’s total oil for more than 30 years put on
IOR/ EOR
• Natural decline of these fields @ about 7% per year arrested
• Recovery Factor of these 15 fields rises from 27.51 in 2000 to 30.5 in 2007

22
• Marginal fields
ONGC: Developing Marginal Fields
• 109 marginal fields identified for fast-track monetization
• Optimizing Resource distribution and enhancing service efficiency to manage
their development along the production from existing 100 fields.

Total

Monetized 87

Monetized thru’ In-house efforts 67

Since
Monetized thru’ Service Contract 20 2005
Prioritized for development 22
(under proposed new Marginal Field Policy)

Total 109

24
• Technology & Alliances
 Technology : Alliances: Minds
S PS- Cube S Petrobras S Domain specialists
S Q-Marine S Gazprom empanelled in various
S GX-Technology S ENI, Italy domains of API, like;
S Sea-bed Logging S NTNU, Norway & NGRI, S Dr. Octavian Catuneanu,
Hyderabad University of Alberta
S Shallow seismic survey
S CGG, France S Dr. Nicholas Christie Blick,
S Non-seismic survey
University of Columbia for PS
S EOR S Roxar, Norway
Cube
S IIT, Roorkee
S Mr. Steve King, Akron Inl. Pvt.
S Norsk-Hydro, Norway Ltd.
S Halliburton S Mr J.V.C. Howes International
S Schlumberger Petroleum Geo-science
S Baker & Hughes Consultant, New Zealand
S TERI and others S M. Yohana, M/S Paradigm
Geophysical et al.

26
• Concerns
Concern: Resource scarcity

Rising E&P expenditure

O il P r ic e V s . R ig r at es o ver t im e

600000 8 0 .0

7 0 .0
500000
6 0 .0
R i g r a te s - U S

400000
5 0 .0

O il P r ic e - U S
300000 4 0 .0

200000
3 0 .0

2 0 .0
100000
1 0 .0
0 0 .0
4 -4 -0 2 1 0 -2 1 -0 2 5 -9 -0 3 1 1 -2 5 -0 3 6 -1 2 -0 4 1 2 -2 9 -0 4 7 -1 7 -0 5 2 -2 -0 6 8 -2 1 -0 6

D a te

5th G en 4th G en 3 rd G e n > 7 5 0 m 3 rd G e n < 7 5 0

2nd gen > 750m 2nd G en< 750m Ja c k u p O il P ric e

Even then… resource constraint:

rig-scarcity - especially deep water rigs
28
Concern: Procedural constraint

6 Sourcing rigs & other resources under

PSU dispensation often A CHALLENGE
due to Procedural constraints

29
Concern: Subsidy

6 Increase in subsidy ~ Rs. 5,000 Crore

6 Discount on Sales tripled in 3 years; from 12.5%
(2004-05) to 38.2% (2007-08).
Rs. Crore
Description 2003-04 2004-05 2005-06 2006-07 2007-08

Discount on sales 2,690 4,104 11,956 17,024 22,001

Impact on PAT 1,596 2,553 7,210 10,333 13,235*

* Provisional

30
Concern: Subsidy
Crude oil price realization (USD/bbl)

100
90
80
70
60
50
40
30
20
10
1)

2)

1)

2)

1)

2)

1)

2)

2)

1)

2)

1)

2)
3)

4)

3)

4)

3)

4)

3)

4)

1)

3)

4)

3)

4)

3)

4)
Q

Q
Q

Q
2(

2(

2(

2(

3(

3(

3(

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4(

4(

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5(

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-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0

-0
-0

-0

-0

-0

-0
01

01

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02

02

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03

03

03

03

04

04

04

04

05

05

05

05

06

06

06

06

07

07

07

07
Crude Oil Price USD per bbl
Rates 2004-05 2005-06 2006-07 2007-08
Pre-discount 43.24 59.65 66.33 85.54
Post-discount 37.83 42.33 44.22 52.90 20%
(Rs.2,000.96) (Rs.2,129.75) 6%
Discount 5.41 17.32 22.11 32.64
31
 Concern: Gas Price

94.91%
12
10

$/ mmbtu

5.73 5.57
0.71%
4.37% 4.22 4.6

@3200 @1920 @>3840 2.02

Rs. Per 1000 M3

ONGC_Avg RIL-Well RVNL PM Tapti International Spot-LNG

Gas Price head Avg Price

6 Tariff Commission recommendation yet to be implemented

32
Concern: Attrition

400 370

6 558 GTs recruited in 2007-08

7
25
350

6 525 Class-III recruitment on card 300

63
261
6 1,018 tenure based employee joined 250 55
5
8

45

Number
200 173
49
4
18
131
150 23
53
14
63
100 51 56 47
44
4
4 1
6 7 5
6 101
50 6 15 2
5 89

6 400 applications for re-induction

5 17 8 67
17 15 9 9
7 9
10 18 18 11

26 being re-inducted in 1st Phase

0

6 2001-02 2002-03 2003-04 2004-05

Year
2005-06 2006-07 2007-08

Exploration Drilling Technical Production F&A HR

Within PSU dispensation

6 Proactive compensation package
6 Better openings through JVs & OVL
6 Employee satisfaction focus area

33
• Growth perspectives
Capex

Capex: Rs. 65,075 Crore during last 6 years

6,603 6,852 10,681 11,421 13,305 16,216

Capex: 2007-08
613

PSC JVs
10.2% Integration
245
Projects
37.2% 3.8%
696 727
15,602 Survey
13,060 10.2%
492 9,985 10,694
974
R&D
6,360
Expl. Drilling
5,089
0.8%
15.5%
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Dev. Drilling
(16.1%) (7.2%) (6.5%) (6.7%) (1.8%) (3.78%)
22.3%
Domestic E&P Integration

35
Major projects

Major Project Rs. Crore

6 C-Series fields’ development 3,195

2. B-22 Cluster development 2,323

3. B-193 Clusters development 3,249

4. Heera & South Heera redevelopment 2,305

5. Development of B-46, B-48, B-105 & B-188 1,284

6. MH South redevelopment Ph-II 6,339

7. Assam Renewal Project 2,230

8. Development of Mangala, Aishwariya, Raageshwari & Saraswati 1,804

(MARS)

36
XI Plan: Oil & Gas Production

112.4
115.8
9.7

5.9
129.0 140.1 30.6

17.6

X Plan XI
X Plan XI
Actual PlanTarget
Actual PlanTarget

ONGC sets 3% higher OVL sets 72% higher

target in XI plan target in XI plan

37
XI Plan: Oil & Gas Production

O+OEG production level from ONGC fields to be maintained

60
XI Plan: ONGC fields
50 Gas (Offshore)

40 Gas (Offshore)

30
Oil (Onshore)
20

10 Oil (Offshore)

0
2007-08 2008-09 2009-10 2010-11 2011-12

38
 XI Plan outlay: ONGC Group

XI Plan outlay: Rs. 130,043 Crore against

Rs. 75,380 Crore during X Plan
Overseas E&P,
45,333,
(34.86%)

Domestic E&P, Integration,

71,795, 4,189, (3.22%)
(55.21%)

MRPL, 8,726,
(6.71%)

Domestic E&P includes ONGC’s investment for PSC JVs

39
XI Plan outlay: ONGC & OVL

66% increase in E&P Plan outlay (Domestic & Overseas)

50000 X Plan XI Plan 50000

+85%
40000
40000

+78%
30000 30000

20000 20000
+16% +67%
10000
+35%
10000
+74% +35%
+32%
0 0
Seismic Ex pl. Drilling Dev . Drilling Capex PSC JVs R&D Integration
OVL
ONGC

40
Thank You