Introduction:

ONGC is the largest crude oil and natural gas Company in India, contributing around 75 per cent
to Indian domestic production. Crude oil is the raw material used by downstream companies like
IOC, BPCL, and HPCL (subsidiary of ONGC) to produce petroleum products like Petrol, Diesel,
Kerosene, Naphtha, and Cooking Gas-LPG.

Vision:
To be global leader in integrated energy business through sustainable growth, knowledge
excellence and exemplary governance practices.

Integrated In Energy Business:

· Focus on domestic and international oil and gas exploration and production business
opportunities.
· Provide value linkages in other sectors of energy business.
· Create growth opportunities and maximize shareholder value.

Exploration:
Oil and Natural Gas Corporation Limited (ONGC) is a global energy holding company, engaged in
the oil exploration, development, and production of crude oil and natural gas. Its segments
include Exploration & Production (E&P), and Refining.

ONGC's on-going upstream exploratory efforts are an important segment of its core E&P
Business in India with the responsibility of finding and accreting oil and gas reserves. It has three
facets of hydrocarbon exploration activities viz. Deep Water, Shallow Water, and Onshore
exploration activities.

Oil and Natural Gas Corporation (ONGC) is an Indian public sector multinational crude oil and
gas company. Its registered office is in New Delhi. It is owned by the Government of India, under
the administrative control of the Ministry of Petroleum and Natural Gas. It is the largest oil and
gas exploration and production company in the country, and produces around 70% of India's
crude oil (equivalent to around 57% of the country's total demand) and around 84% of its
natural gas.
Annual Report:
The reports states that India has 4.5 thousand million barrels of proven oil reserved at the end
of 2018 and produced 39.5 million tons in 2018.

ONGC expects production to fall 3-4 per cent this fiscal. Oil and Natural Gas Corporation (ONGC),
the country’s largest petroleum explorer, expects oil and gas production to decline in a range
between 3 per cent and 4 per cent in the current financial year ending March 2020, a company
executive told analysts post the firm’s third quarter results

ONGC cumulative domestic production

Financial Year Crude oil (Million Tonne) Natural Gas (Billion Cubic Meter)

FY 14 26 24.85

FY 15 25.94 23.52

FY 16 25.92 22.53

FY 17 25.53 23.27

FY 18 25.43 24.61

FY 19 24.23 25.81

FY 19 (April-December) 18.33 19.25

FY 20 (April-December) 17.53 18.57

ONGC VS RIL:
ONGC is the country's largest oil exploration and production (E&P) company accounting for
nearly 90% of India's proven oil and gas reserves. At the current rate of production, the
company accounts for over 80% of oil and gas production. Apart from E&P, the company also
produces value-added petroleum products such as LPG, kerosene, naphtha and diesel.

Reliance Industries Limited (RIL) operates in multiple business segments namely petrochemicals,
refining and marketing, textiles, exploration and production etc. The petrochemicals segment
includes production and marketing operations of petrochemical segment includes production
and marketing operations of petrochemical products.
CURRENT VALUATIONS
RELIANCE IND. ONGC

P/E (TTM) 29.6 11.8

P/BV 2.7 0.4

Dividend Yield % 0.3 9.8

Challenges:
ONGC faces challenge of natural decline in onshore oil wells. Public sector energy major, ONGC
is faced with a double whammy, where on one side it is facing depleting oil production from its
onshore fields in Gujarat, while on the other new finds are not picking up pace.

As per the recent data by the Ministry of Petroleum and Natural Gas (MoPNG), ONGC’s oil
production in Gujarat during April-February period stood at 45.1 million tonnes, against 47.5
million tonnes recorded during same period last year, showing a decline of 5 per cent.The
Ministry noted the reason for decline in oil production in Gujarat saying, “Ageing of fields
resulting decline in reservoir pressure and increased water cut affected production.”

Plans and strategy for next 5 years:

Timely project completion, attrition at senior level and low gas prices will be the key challenges
for ONGC NSE -0.69 %, which is seeking to raise its oil production by a quarter and double gas
output in five years with Rs 92,000 crore worth of projects.

"Project implementation is going to be another challenge because of undertaking huge

investments.

ONGC adopts new 'Energy Strategy 2040', targets doubling of oil, gas production. The firm
produced 24.23 million tonnes of crude oil in the 2018-19 fiscal year and 25.81 billion cubic
metres (bcm) of natural gas from its domestic fields. Another 10.1 million tonnes of oil and
4.736 bcm of gas were produced from its overseas assets.

The 'Energy Strategy 2040' entails ONGC achieving "three times revenue distributed across
exploration and production, refining, marketing and other businesses; four times current
profit-after-tax (PAT), with 10 per cent contribution from non-oil and gas business; and 5-6 times
current market capitalization.

The document targets cumulative upstream output (local and overseas) almost doubling from
current levels with 2 per cent and 5 per cent CAGR in domestic and international operations
respectively.

Reference:
· https://www.ongcindia.com/wps/wcm/connect/en/about-ongc/performance/financial/
results/
· https://www.google.com/search?q=ongc&rlz=1C1YQLS_enIN920IN920&oq=ongc&aqs=
chrome.0.69i59j46i199i291i433j0i433l2j69i60l4.3102j0j7&sourceid=chrome&ie=UTF-8
· https://energy.economictimes.indiatimes.com/news/oil-and-gas/ongc-expects-producti
on-to-fall-3-4-per-cent-this-fiscal/74228654
· https://www.equitymaster.com/stock-research/compare/RELI-ONGC/Compare-RELIANC
E-IND-ONGC
· https://www.thehindubusinessline.com/companies/ongc-faces-challenge-of-natural-dec
line-in-onshore-oil-wells/article23123234.ece
· https://economictimes.indiatimes.com/industry/energy/oil-gas/have-to-find-out-all-wa
ys-to-increase-output-ongc-chief/articleshow/61459610.cms?from=mdr
· https://economictimes.indiatimes.com/industry/energy/oil-gas/ongc-adopts-new-energ
y-strategy-2040-targets-doubling-of-oil-gas-production/articleshow/70721759.cms?fro
m=mdr