EXPLORING hidden depths

ACHIEVING glorious heights

Management Discussion and Analysis Report
Subsequent waves of pandemic and conflict in Ukraine has dealt
a severe blow to the global economy, shattering expectations of a
fast paced recovery from the damaging impact of the COVID-19
and has triggered an inestimable humanitarian crisis that demands
a harmonious resolution. As tensions between Russia and Ukraine
escalated into a full-blown crisis, global oil and gas market faced an
upward rally in crude oil prices, to surge past USD100 per barrel, a
phenomenon that is likely to sustain if the conflict prolongs.
The global economic recovery continues amid evolving challenges,
Companies and Governments worldwide are re-evaluating their
dependencies and re-analysing their strategies. For oil and gas, the
volatility reflects the unwinding of partnerships between Western
and Russian energy groups. The impact of supply issues will vary
by country and be heavily influenced by the geopolitical actions.
Gas is particularly vulnerable, with almost 40% of the natural gas
consumed in the European Union originating in Russia.
The immediate and longer-term impact on raw materials, logistics/
transportation, implementation teams, and infrastructure is
inevitable. The conflict in Ukraine exposes once more the risks
associated with the interconnected nature of global trade. India
meets half its gas needs through imports of liquefied natural
gas (LNG). Though Russian LNG imports are low, the crisis has
pushed up the fuel prices. India’s economic recovery amid rapid
vaccination will also be affected severely as it is intricately linked
to war-induced commodity price increases and broadening price
pressures. Aggregate Emerging Market and Developing Economies
(EMDE) inflation reached over 9.4 percent-its highest level since
2008-while inflation in advanced economies, at 6.9 percent, is the
highest since 1982.
IMF also states that frequent and wider-ranging lockdowns in
China-including in key manufacturing hubs-have also slowed
activity there and could cause new bottlenecks in global supply
chains. In several countries uncertainty has steeply risen and further
increases in commodity prices, additional supply disruptions, and
tighter financial conditions remain threats. World Bank highlighted
that higher, broader, and persistent price pressures shall slow
down the global trade growth to 4 percent in 2022. Overall risks
to economic prospects have risen sharply and policy trade-offs
have become ever more challenging. Maintaining the resilience of
financial institutions through effective regulation is also critical at
this juncture.
Indian Economy:
25
20
15
10
5

Per cent
to accessibility, availability and affordability of Energy. Inflationary 0
pressures on economies due to rising fuel costs has prompted
hardening of monetary policy by the Central Banks. -5
In the present circumstances, energy security has joined energy -10
transition as a top global priority, though the energy picture is -15
less clear at the global level. The energy sector impacts of the -20
present crisis will reverberate across every corner of the globe. It
is expected that countries would accelerate the implementation -25
of their decarbonisation policies, in particular energy demand
Q1:2019-20
Q2:2019-20
Q3:2019-20
Q4:2019-20
Q1:2020-21
Q2:2020-21
Q3:2020-21
Q4:2020-21
Q1:2021-22
Q2:2021-22
Q3:2021-22
Q4:2021-22
Q1:2022-23
Q2:2022-23
Q3:2022-23
Q4:2022-23
reduction strategies.
1. Global Economy

50 per cent CI 70 per cent CI 90 per cent CI

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

RBI: Monetary Policy Statement (June)

CI - Condence Interval

Indian economy grew 8.7 per cent in 2021-22 as per latest

IMF: World Economic Outlook
Ukraine-Russia crisis unfolded while the global economy was on a
mending path but had not yet fully recovered from the COVID-19
pandemic. April edition of the World Economic Outlook highlighted
that the ongoing conflict in Ukraine has “severely set back” global
economic recovery. As per IMF, global growth is projected to slow
from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and
2023. This is 0.8 and 0.2 percentage points lower for 2022 and
2023 than projected in January. World Bank in its Global Economic
Prospects report published in June 2022, has lowered global growth
forecast for calendar year 2022 to 2.9 per cent from 4.1 per cent.
World Bank reported that Global median headline CPI inflation rose
to 7.8 percent (y/y) in April 2022, its highest level since 2008 due
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Provisional Estimates of National Statistics Office. The GDP growth
for 2021-22 takes the economy above its pre-pandemic level and
is an improvement after contracting 6.6 per cent in 2020-21. The
economic impacts from the most recent COVID-19 Omicron wave
were relatively small and the populations are well-vaccinated.
World Bank expressed concerns regarding deterioration in asset
quality previously masked by COVID-era lending support measures
including loan forbearance can resurface as these measures are
phased out.
Pandemic has left country with rising fiscal deficit. High import prices
and demand during the recovery have led to deteriorating current
account balance, while supply constraints and rising commodity
prices have added to inflationary pressures. The ongoing conflict
further adds to supply constraints and financial sector uncertainties,
as trade embargoes and financial sanctions on Russia reverberate
through the global goods and financial markets. The unemployment
rate has declined to levels seen prior to the pandemic, but the labor
force participation rate remains below pre-pandemic levels.
In India, rising inflationary pressures led to an unscheduled policy
rate hike in May & June 2022. Considering the microeconomic
uncertainties, World Bank has also lowered India’s growth forecast
for the current fiscal year (2022-23) to 7.5% from its previous
estimate of 8% made in January.

2. Global Energy Sector
World has experienced multiple waves of infections from the
contagious virus, and new variants have brought additional
challenges. Global energy markets are under stress as it is facing
double whammy of energy crunch and higher prices caused by
pandemic & conflict in Ukraine. Crude oil prices increased by 36
percent between August 2021 and February 2022, driven by a
strong recovery in oil demand, followed by geopolitical tensions.
Brent crude oil temporarily reached USD 140 in early March as
markets started to reduce Russian oil imports. The global energy
system is facing extreme uncertainty in the near, medium and long
terms, while the consumers are facing hardships due to the limited
availability of oil and gas.
The oil and gas sector is confronted with the biggest task in society-
addressing climate change. The structure of energy demand is
changing, with the importance of fossil fuels gradually declining.
What pathways can companies opt, and how can they steer towards
low carbon opportunities in an economically viable manner is a big
question. There has been a marked strengthening in the past two
years in the ambitions of governments around the world to increase
the pace and extent of reductions in carbon emissions. Wind and
solar power are expanding rapidly, underpinned by continuing falls
in their costs and an increasing ability of power systems to integrate
high concentrations of variable power sources.
BP energy outlook 2022 estimates that share of fossil fuels in
primary energy shall fall from close to 80% in 2019 to 30-20% by
2050 in Accelerated and Net Zero Emissions (NZE) Scenarios. The
declining importance of fossil fuels in global energy is offset by the
increasing role played by renewable energy, whose share in primary
energy increases from a little over 10% in 2019 to 55-65% by 2050
in Accelerated and Net Zero scenarios. It is believed that the recent
energy crisis will accelerate the adoption of renewable energy.
Oil Prices & Demand
With Oil markets struggling to navigate supply losses and
dislocations stemming from Russia-Ukraine conflict, US and
International Energy Agency (IEA) coordinated stock releases are
somehow easing the pressure emanating from supply crunch and
providing a crucial buffer to oil markets that’s facing heightened
uncertainty amid the multitude of repercussions stemming from
sanctions and embargoes targeted at Russia. As per IEA, global
demand for oil in 2022 is forecasted to average 99.4 million barrels
a day, up by 1.9 mb/d from 2021.
Woodmac expects oil demand to grow at 3.6 million b/d in 2022 (still
the second-biggest annual jump ever) and 2.2 million b/d in 2023.
However, annual demand for 2022 has been trimmed by 0.8% and
for 2023 by nearly 1% – mainly due to Covid-related lockdowns in
several major cities in China and the weaker outlook for Russia’s
economy due to sanctions. The impact of higher prices in some
countries is a secondary factor.
IHS Markit’s base case scenario projects Dated Brent to average
about USD 104/bbl in 2022, assuming disruptions to Russian oil
supply of the order of 1-3 MMb/d, which are offset to a degree by
higher Iranian exports, unilateral output hikes by Saudi Arabia and
the UAE, and strong supply gains outside of OPEC+. If there are
more extreme cuts to Russian supply, then prices could average
USD 133/bbl or more, with spikes to even higher daily levels at times.
Short-term prices have jumped as a result of tightening supply and
demand conditions as well as the Russia-Ukraine conflict. As more
supply emerges, particularly from the US and demand growth
decelerates, prices are expected to ease back to the low USD 70s
in 2023. However, there are plausible scenarios where prices move
even higher as a result of Russian supply disruptions.
INTEGRATED ANNUAL REPORT 2021-22
There has been a strong rebound in oil demand that has not been
matched by a rebound in investment in supply. Despite upward
pressure on prices, upstream spending in 2021 is set to remain
below 2019 levels. Major international companies are diversifying
their spending and building their portfolio in low carbon business.
Financial resilience is increasingly becoming a function of climate
resilience, companies are keen to build a portfolio that is resilient to
both lower commodity prices and higher carbon prices.
Gas & LNG
Global natural gas consumption showed a strong recovery in 2021,
with an estimated 4.5% y-o-y increase. This is more than twice the
equivalent of the decline experienced in 2020 and the third strongest
year since 2000, after 2010 and 2018 (which grew by 7.8% and 5.2%
respectively). This strong growth resulted from the combination of a
rebound in economic activity after the lockdowns of 2020, boosting
consumption in the industrial and power generation sectors, and
a succession of extreme weather events that led to higher than
expected heating and power generation needs. Growth slowed
significantly in the second half of 2021 due to a challenging price
environment and softening of the economic recovery.
Global LNG trade expanded by 6% in 2021, slightly below the 7%
average rate in the 2015-2020 period, but much faster than the 1%
increase in 2020. The Asia Pacific region saw an 8% increase in
LNG imports and accounted for more than 95% of the net growth in
LNG trade globally. China (up by 17%) and Korea (up by 14%) were
the largest contributors in volume terms, particularly in the first three
quarters of 2021, and China became the world’s biggest importer
of LNG last year.
Russia is Europe’s largest natural gas supplier, meeting 33% of
the region’s demand in 2021 after constant growth over the past
decade due to the depletion of domestic production. Higher LNG
import needs in Europe are putting pressure on an already tight
global LNG market balance in 2022. Natural gas storage played a
crucial role in meeting seasonal swings in gas demand across all
key gas regions during the 2021/22 heating season. Gas storage
levels both in Europe and the United States stood well below their
five-year average levels at the end of the heating season, indicating
strong restocking needs.
The record highs in spot natural gas prices in 2021 and 2022 have
refocused attention on the role of natural gas, and raised new
questions about the extent to which, and for how long, it can retain
a place in the energy mix as clean energy transitions accelerate.
Main Spot and forward Natural Gas prices, 2020-2022 (IEA)
Exploration
Oil and gas companies have continued to keep a tight control on
exploration spending following the market upheavals in the middle
of the last decade and more recently from the damage wrought
on global demand by the Covid-19 pandemic. Exploration drilling
activity saw a significant drop in 2020 due to the impact of the
Covid-19 pandemic on global oil demand. A rise in oil prices from
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last year has not directly translated into a similar hike in exploration
capex, as upstream players maintain financial discipline and focus
on high-quality prospects. Rystad predicts that licensing activity is
likely to see a drop in 2022. 66 rounds are expected to be completed,
out of which around 14 are currently in the bid evaluation stage and
16 are open for bidding, with the remaining 36 still in the planning
stage. The rounds that are still under planning are high-risk rounds
and around 50% of these likely to face delays and closing dates be
extended to next year. The rounds that are yet to open have higher
risk and could face delays in actual awards, with results potentially
by next year. Most of the rounds that are likely to be completed are
in mature basins.
Investment
Upstream investment is rebounding off a 15-year low, led by
resource holding NOCs. But demand is recovering faster and high
prices suggest more investment is needed. As many oil and gas
companies have started to reshape and reorient their portfolios,
only a few are positioned to react swiftly to the recent oil price surge
to provide much-needed additional production.
The current upcycle –which has seen Brent crude surge past USD
100 per barrel –is remarkable in that, despite the oil price surge
and robust cash flow generation, exploration and production (E&P)
investment is only showing a modest uptick, with little sign of a
recovery to levels seen before the Covid-19 pandemic kicked off
in early 2020.
One of the key reasons for the reduced investment sensitivity
to oil price movements is a shift in cash flow distribution among
industry players. Amid the downturn caused by the drop in demand
due to the Covid-19 pandemic, returning cash to shareholders
became a top priority and companies reshaped their business
models accordingly. Companies are also shifting priorities towards
diversification, resilience and decarbonisation.
The focus for the most part is on short-cycle, fast-payback
conventional, deep water or shale projects. For the year 2022,
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Rystad Energy expects that the global upstream investments will
grow around 20%. From 2020 to 2023, the average yearly growth in
investments is estimated at 7%. It expects shale/tight oil investments
to increase almost 35% this year. Deepwater is expected to grow
around 30% this year. Brazil, Guyana, West Africa and Australia will
drive most of this growth.
Woodmack observes that Investment is on track to rebound from
USD 350 billion in 2020 to USD 430 billion by 2023 but price volatility
created by demand uncertainties would serve to reinforce or break
discipline, or recreate capital starvation, perpetuating the risk of
under or over investment. Upstream capital requirements depend
on expected demand and achievable capital efficiency.
M&A
Deloitte’s 2022 oil and gas M&A outlook highlighted that aggressive
acquisition strategy of O& G companies has given way to restrained,
130
strategic, and environment-focused buying in 2021. Despite a 75%
rebound in oil prices and record cash flows, for example, global
O&G M&A deal activity increased by only 18% and capex grew by
only 17% in 2021. Rystad Energy reported that Global upstream
merger and acquisition (M&A) deals rebounded to pre-Covid-19
levels in 2021, reaching a total of USD 181billion, a 70% increase
over 2020. The total deal value for 2021 was the highest in three
years and almost reached the highs seen in 2017 and 2018 of USD
205 billion and USD 199 billion, respectively. Deals valued at more
than USD 1 billion accounted for USD 126 billion, or 70%, of the
global total.
Geopolitical uncertainties may impede O&G M&A momentum in
2022. ESG consideration in M&A is emerging and evolving. Private
Equity (PE) interest has started looking for low-carbon solutions.
However, portfolio-rebalancing amid the evolving geopolitical
landscape and ongoing opportunities to integrate hydrocarbon
and green energy assets could provide some support to the M&A
activity in 2022.The deal pipeline is robust, and the upstream M&A
market looks set to continue to strengthen.
3. India Energy Snapshot
India is the world’s third largest energy consumer and a major force
in the global energy economy. Energy consumption in India doubled
since 2000, due to growing population, rapid industrialisation and
large scale urbanisation. While the pandemic seriously hampered
capacity growth in 2020 and 2021 the pace is likely to further pick
up in 2022. Energy use on a per capita basis is well under half the
global average, and there are widespread differences in energy use
and the quality of service across states and between rural and urban
areas. Over 80% of India’s energy needs are majorly met by three
fuels: coal, oil and solid biomass. Coal remains the largest single
fuel in the energy mix. Oil consumption and imports have grown
rapidly on account of rising vehicle ownership and road transport
use. Domestic fuel sales have been rising since the government
has been lifting COVID-19–induced curbs.
BP Energy Outlook has envisaged that there will be a strong
growth in primary energy led by renewables and, to a lesser extent,
natural gas. Average growth per year would be around 2.5%- 2.7%.
As result of this strong growth, India would account for around
13%-14% of the global primary energy consumption in 2050, up
from around 7% in 2019. The country is the world’s fifth largest
renewable energy market with installed capacity of close to 109 GW.
India has increased its Conference of Parties (COP) 21 Nationally
Determined Contributions (NDCs) commitment, the country has set
an ambitious target of 500GW by 2030.
Crude Oil & Natural Gas Production
As per Petroleum Planning and Analysis Cell (PPAC) data, domestic
crude oil production in FY’22 stood at 29.69 Million Metric Tonnes
(MMT) versus 30.49 MMT during FY’21. ONGC’s standalone
production was 19.54 MMT vs 20.27 MMT in FY’21. Production
from Oil India Ltd and PSC/ JVs was 2.98 MMT and 7.16 MMT
respectively.

Natural Gas output in FY’22 was 34.02 Billion Cubic Metres (BCM),
versus 28.67 BCM in FY’21. The increase in gas output was mainly
contributed by private operator in Eastern Offshore.
ONGC’s standalone domestic output stood at 20.91 BCM. Oil India
produced 2.89 BCM and other private operators 10.22 BCM.
Consumption of Petroleum Products
According to PPAC figures, domestic petroleum products
consumption in FY’22 increased by over 4 percent to 202.71 MMT,
as demand for transport fuels surged as the pandemic-linked
lockdown restrictions eased and economic activity picked up.
Except SKO, petcoke & others, all petroleum products reported a
growth in consumption during April-March 2022 compared to the
same period of the previous year.
Petrol consumption was up 10.3 per cent at 30.9 million tonnes
in 2021-22 while diesel sales were up 5.4 per cent at 76.7 million
tonnes. Consumption of LPG was up 3 per cent at 28.3 million
tonnes. Aviation Turbine Fuel (ATF) demand soared 35 per cent
to 5 million tonnes but was less than the consumption recorded
during the pre-pandemic year. This was mainly because full aviation
services resumed only towards the end of the year.
Crude Oil Price: Indian Basket
120.00
100.00
Crude oil price (US$/bbI)
80.00
60.00
40.00
20.00
0.00
2020-21
April May June July Aug Sep Oct Nov Dec Jan Feb Mar
2018-19
2017-18
2019-20
Price
leads to broader price increases since it adds to input costs for
large number of products. While current prices are at a level that
aligns with ONGC’s strategic outlook and will boost the capex
spending and fast track the monetization of discovered fields.
Domestic Gas Prices
The ongoing Ukrain-Russia conflict has added further pressure and
uncertainty to an already tight natural gas market. Europe’s natural
gas supply has been a topic of concern since mid-2021. Short-term
prices have reached all-time record highs since the beginning of
the conflict. The competition for flexible LNG cargoes pushed Asian
spot prices to a record high and led to further curtailment in price-
sensitive importing markets, particularly in emerging Asia. Price
INTEGRATED ANNUAL REPORT 2021-22
Import and Export
PPAC reported that Crude oil imports increased by 7.9 percent
in FY’22 to 211.9 MMT. The country’s import dependence has
increased owing to a steady decline in domestic output and surge
in demand, however, lower than pre-pandemic imports of 227
million tonnes in 2019-20.
Petroleum product exports increased to 62.7 MMT from 56.8 MMT
in FY’21. Forex outgo for imports for FY’22 surged to all time high at
USD 120.4 billion versus USD 62.2 billion in the previous financial
year. The higher import bill may significantly affect the forex reserves
and current account deficit.
Crude Oil Price: Indian Basket
Crude oil price of the Indian basket averaged USD 79.18 per barrel
during FY’22 compared to USD 44.82 per barrel in the previous
fiscal. The rise in prices was the steepest in the month of March
2022 when the Indian basket averaged USD 112.87 per barrel. The
supply concerns have kept global oil prices elevated since Russia-
Ukraine Crisis in February. India, which meets nearly 85% of its oil
needs through imports, could be hit by a widening trade deficit,
weakening rupee and persistent higher inflation. Higher oil Prices
80
75
70
65
US$ vs Rs
60
55
50
45
40
Exchange rate (US$ vs Rs)
volatility also reached record levels as a result of unprecedented
uncertainty.
Domestic gas prices in FY’22 have been revised – it was priced at USD
2.90/MMBTU for H2FY’22 as against USD 1.79/MMBTU for H1FY’22.
Also the ceiling price for gas produced from challenging fields of
deep-water and HP/HT areas was revised to USD 6.13 per MMBTU
for October 2021-March 2022 from USD 3.62 per MMBTU in H1FY’22.
Further, the prices of domestic natural gas for H1 FY’23 have been
revised to USD 6.10 per MMBTU (million British thermal units). For
the Gas produced from discoveries in deep-water, ultra deep-water
and HPHT fields, the gas price ceiling is USD 9.92 per MMBTU.
In order to give a fillip to the gas based economy, focus is being
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given to enhancing domestic gas production, expeditious
development of gas infrastructure as well as development of Gas
market by providing open access to gas infrastructure. To further
facilitate conducive business environment for competitive gas
markets, efforts are underway to rationalise gas pipeline tariff
structure for improving the affordability of gas across the country
and for attracting investments into the gas infrastructure. Reform
measures like e-auction, Gas exchange platform, common carrier
etc. will create conducive conditions for growth of gas based
economy in the country.
Present remunerative prices will unlock value while ensuring a
steady and reliable supply of indigenously developed gas to the
country’s growing industrial and commercial setup – making that
the perfect embodiment of an ‘Atmanirbhar Bharat’ philosophy.
Domestic Upstream Reforms and Initiatives
The last few years in the domestic upstream sector have been a
sight for significant policy reforms and progressive decisions, GOI
has undertaken several policy measures to increase exploration
and production activities in India. The rapid pace of policymaking
and swift progress on the ground with projects such as the National
Seismic Project and Reassessment of Hydrocarbon potential
will provide the necessary support for exploration activities in the
country and further augment Oil & Gas supplies.
Some of the key reform measures have been, the introduction of
a new licensing regime – Hydrocarbon Exploration and Licensing
Policy (HELP) – that allows for Open acreage system of bidding
with marketing and pricing freedom among other incentives. New
players that entered the fray through the DSF and OALP bid rounds
will provide the much needed thrust to explore the prospectivity of
the Indian Sedimentary Basins. Government also brought in policy
to incentivize greater recovery from our hydrocarbon producing
assets through the EOR Policy.
Further, the Ministry of Petroleum & Natural Gas (MoPNG),
Government of India, vide Notification dated 15 October 2020, has
allowed the producers to sell the natural gas through e-bidding
where the contracts require market price discovery through
transparent means. These affirmative policy actions are a much-
needed vital nudge for a sector that has enormous untapped
potential and is a key strategic plank for supporting the country’s
sovereign growth and development pursuits.
ONGC has made significant progress in this timeframe. It has
completely monetized ‘U’ Field of KG-DWN-98/2 project. Its
efforts contributed to the upgrading of Bengal and Vindhyan from
Category 3 to Category 2 Basins, of which the former became a
Category 1 basin soon after with commercial production of first oil
from its Ashokenagar-1 well.
Perseverance of ONGC over the last 25 years, has now paid off –
the Vindhyan Basin is close to becoming the ninth producing Basin
of India. On testing, the Well Hatta#3 in the Son valley sector of
Madhya Pradesh produced over 62,044 cubic meters/day gas, thus
confirming the production potential of Proterozoic Basin for the first
time in India. ONGC is fully geared to consolidate this development.
With belief in prospectively, it has already acquired 5 Blocks under
OALP rounds on the same Play trend.
At present world is witnessing double jolt of Pandemic and Ukraine-
Russia Crisis. Energy Transition has gained fresh impetus due to
unsustainable Oil & Gas Prices which will entail fresh challenges
to E&P Sector. Some key issues that merit attention at this point
are the moderation of OID Cess and royalty rates and coverage of
crude oil and natural gas under GST.
Operational Performance
For FY’22, Oil & Gas production of ONGC Group, including PSC-
JVs and from overseas Assets has been 55.72 MMTOE (against
58.39 MMTOE during FY’21). ONGC-operated domestic fields
accounted for bulk of the countries oil and gas production – 66
percent and 61 percent respectively.
Oil and gas production profile of ONGC from domestic as well as
overseas assets during last five years are as given below:

Oil and gas production FY’22 FY’21 FY’20 FY’19 FY’18

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Crude Oil Production (MMT) 29.81 31.04 33.11 34.33 34.79

ONGC 19.55 20.27 20.71 21.11 22.31
ONGC’s share in JV 2.16 2.26 2.64 3.12 3.13
ONGC Videsh 8.10 8.51 9.76 10.10 9.35
Natural Gas Production (BCM) 25.91 27.35 30.12 30.55 29.42
ONGC 20.91 22.10 23.85 24.75 23.48
ONGC’s share in JV 0.77 0.72 1.04 1.06 1.13
ONGC Videsh 4.23 4.53 5.23 4.74 4.81
Proved reserves
Position of proved reserves of your company (including ONGC Videsh) is as below:

Proved Reserves (MMtoe) FY’22 FY’21 FY’20 FY’19* FY’18

ONGC 557.31 580.52 602.55 625.52 683.46
JV share 14.22 16.33 17.82 20.07 11.42
ONGC Videsh 274.34 273.59 340.45 345.78 287.13
Estimated Net Proved O+OEG Reserves 845.87 870.44 960.82 991.37 982.01
*FY’19 onwards the reserves are based on PRMS basis; earlier years were reported based on SPE-classification

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 INTEGRATED ANNUAL REPORT 2021-22

Financial performance: ONGC Standalone

(` Million)
Particulars FY’22 FY’21 % Increase/ (Decrease)
Revenue
Crude Oil 836,612 479,338 74.53
Natural Gas 124,414 114,216 8.93
Value Added Products 138,597 85,355 62.38
Other Operating revenue 3,831 2,502 53.12
Total Revenue from Operations: 1,103,454 681,411 61.94
Other Income 65,156 71,425 (8.78)
EBIDTA 609,456 335,697 81.55
PBT 410,400 164,028 150.20
PAT 403,057 112,464 258.39
EPS 32.04 8.94 258.39
Dividend per share 10.50 3.60 191.67
Net Worth ** 2,371,481 2,045,586 15.93
% Return on net worth 17.00 5.50 209.09
Capital Employed 1,349,661 1,159,394 16.41
% Return on capital employed# 29.01 12.23 137.20
Capital Expenditure 277,413 268,593 3.28
** includes reserve for equity instruments fair valued through other comprehensive Income

# Return on capital employed is calculated by excluding exceptional item. In case exceptional item is included, ROCE would be 13.42% for 2020-21.

Details of Significant change in ratio (i.e. 25% or more from previous year):-

Particulars 2021-22 2020-21 Change in %

(i) Debtors Turnover (days) 32 34 (5.88)
(ii) Inventory Turnover 13.51 8.00 68.88
(iii) Interest Coverage Ratio 142.18 55.95 154.12
(iv) Current Ratio 0.98 0.86 13.95
(v) Debt Equity Ratio 0.03 0.07 (57.14)
(vi) Operating Profit Margin (%) 39.33 25.30 55.45
(vii) Net Profit Margin (%) 36.53 16.50 121.39
(viii) Return on Net Worth (%) 17.00 5.50 209.09

Notes:
1. Change in Inventory Turnover Ratio 3. Change in Debt Equity Ratio

Inventory Turnover ratio for FY 2021-22 is 13.51 against 8.00 in FY
2020-21 i.e. increase of 68.88%, due to increase in revenue from
operations by `422,043 million and decrease in average inventory
by `3,526 million. The increase in revenue from operations is mainly
due to increase in crude oil revenue by `357,274 million on account
of increase in crude oil prices, increase in natural gas revenue
by `10,198 million on account of increase in natural gas prices,
increase in value added products revenue by `53,242 million and
increase in other operating revenue by `1,329 million.
2. Change in Interest Coverage Ratio
The Interest Coverage ratio for FY 2021-22 is 142.18 against
55.95 in FY 2020-21 i.e. increase of 154.12%, this is mainly due to
increase in Profit Before Interest & Tax (PBIT) by `261,576 million
and marginal decrease in interest cost during the year. The increase
in PBIT is mainly due to increase in revenue from operations by
`422,043 million which is partly offset by increase in statutory levies
by `115,085 million as the levies are charged on ad-valorem basis.
The Debt Equity ratio for FY 2021-22 is 0.03 against 0.07 in FY
2020-21 i.e. decrease of 57.14%, due to decrease in Debt by
`86,257 million and increase in other equity by `325,895 million.
The decrease in Debt is due to repayment of current borrowings
during FY 2021-22.
4. Change in Operating Profit Margin
The Operating Profit Margin for FY 2021-22 is 39.33 % against
25.30 % in FY 2020-21 i.e. increase of 55.45 %, this is mainly due
to increase in Profit Before Interest & Tax (PBIT) by `261,576 million
The increase in PBIT is mainly due to increase in revenue from
operations by `422,043 million which is partly offset by increase
in statutory levies by `115,085 million as the levies are charged on
ad-valorem basis.
5. Change in Net Profit Margin
The Net Profit Margin for FY 2021-22 is 36.53% against 16.50% in
FY 2020-21 i.e. increase of 121.39%, this is due to increase in Profit
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after Tax (PAT) by `290,593 million mainly on account of increase in crude oil prices and also on account of reduction in tax expenses by
`44,221 million due to adoption of lower tax regime as per section 115BAA of income tax act 1961.
6. Change in Return on Net Worth
The Return on Net Worth for FY 2021-22 is 17.00% against 5.50% in FY 2020-21 i.e. increase of 209.09% ,due to increase in Profit after Tax
(PAT) by `290,593 million mainly on account of increase in crude oil prices and also on account of reduction in tax expenses by `44,221
million. The same is partly offset by increase in net worth by `325,895 million.

Financial performance: ONGC Group

(` in Million)
Particulars FY’22 FY’21 % Increase/ (Decrease)
Revenue from Operations 5,317,618 3,604,635 47.52
Other Income 74,376 93,324 (20.30)
EBIDTA 873,113 588,057 48.47
PBT 540,911 301,264 79.55
Profit after Tax for the year 492,941 213,602 130.78
- Profit attributable to Owners of the Company 455,221 163,044 179.20
- Profit attributable to Non-Controlling interests 37,720 50,558 (25.39)
EPS 36.19 12.96 179.24
Net Worth * 2,595,029 2,209,810 17.43
% Return on net worth 17.54 7.38 137.67
Capital Employed 2,308,233 2,025,625 13.95
% Return on Capital employed# 25.43 15.66 62.39
* Includes reserve for equity instruments through other comprehensive income

# Return on capital employed is calculated without considering the impact of exceptional items. In case exceptional item is also considered for calculating PBIT, ROCE
would be 24.52% for 2021-22 and 16.12% for 2020-21.

4. Opportunities & Threats

The recent geopolitical crisis amidst the ongoing pandemic, has Despite the challenges, many E&P companies are sustaining efforts
proved just once again, how vulnerable the global economy remains to decarbonize their operations and their value chains. A number
to systemic risks. The oil and gas industry has rebounded strongly of oil and gas companies have already set net-zero-emissions
MANAGEMENT DISCUSSION AND ANALYSIS REPORT

in 2021, with oil prices reaching their highest levels in six years.
These price increases come on top of already tight commodity
markets due to a solid demand recovery from the pandemic, as
well as numerous pandemic-related supply constraints posed
by the ongoing conflict in Ukraine. The conflict has disrupted
production and trade of several commodities, particularly those
where Russia and Ukraine are key exporters, including energy,
fertilizers, and grains. IHS in its recent report has highlighted that
the world oil supply cost curve has shifted upward. This results in
about a USD 15/bbl increase in their price outlook to 2050 in base-
case scenario. It is expected that the general price environment
between 2030 and 2050 shall average about USD 74/bbl in real
terms (or about USD 117/bbl in nominal terms). While the recovery
is better than expected, pressure is mounting on E&P companies to
accelerate the shift of energy system away from one dominated by
hydrocarbons towards the one with low-carbon system.
Most models of the energy transition also suggest that continued
petrochemical demand and use in industry & transportation will
ensure a considerable level of oil and gas demand, even in a net-
zero scenario. The global energy mix is not changing nearly as
quickly as the world needs it to, as it is influenced by a range of
factors, from political support, economics, to the development of
emerging technologies. IHS Markit predicts that higher oil prices
and a renewed focus on energy security are expected to jump-start
global upstream capex spending. Liquids demand (demand for
refined products, natural gas liquids, biofuels, and other liquids) is
now expected to peak at about 109 MMb/d in 2030.
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targets. The Paris Agreement strengthened the global response to
the threat of climate change. According to new data released by
the International Renewable Energy Agency (IRENA), renewable
energy continued to expand steadily and well above the long-term
trend, with share in total capacity expansion reaching new record
of 81% last year. Global renewable generation capacity amounted
to 3,064 Gigawatt (GW) by the end of 2021, increasing the stock of
renewable power by 9.1 per cent.
Total installed renewable capacity (excluding hydro) in FY’22 has
reached 109 GW in India. The share of renewables in the power
sector is already at 27.5 percent and is likely to step up further with
the development of more efficient and cheaper storage solutions.
India has also already raised the nationally determined contribution
(NDC) target of non-fossil energy capacity to 500 GW by 2030.
At present nearly 1 Million Electric Vehicles are already plying on
Indian roads. Rystad Energy’s report states that in the 2030s, the
EV revolution will spill over into electric trucks which will see a
delayed transition, but once it takes hold, on a per unit basis, will
have a material negative impact on oil demand that will materialize
in the 2040s.
Energy consumption in India has doubled since 2000, with 80%
of demand still being met by coal, oil and solid biomass. On a per
capita basis, India’s energy use is less than half the world average.
As Indian economy is the fastest growing major economy, it is re-
entering a very dynamic period in its energy development. Over the
coming years energy demand and energy dynamics is expected
to transform from fossil to low-carbon by the second half of this

century. Despite the ongoing transition, IEA has underlined that Oil
& Gas will remain central to the Indian economy over the next three
decades.
Being an energy starved country, GoI has laid special onus
on ONGC to carry out surveillance programme on behalf of
Government of India to probe and explore remaining unexplored
sedimentary basins of the country. As per the most recent resource
reassessment study, a total of about 42 BTOE of resource potential
was estimated from all category basins. Out of this about 12 BTOE
has already been discovered, with a large potential of about 30
BTOE yet to be discovered. ONGC will have opportunities to take
lead in acquiring prospective areas through OALP & DSF for
exploration of oil & gas and to expand its reserve base. ONGC has
already initiated and is continuing efforts for identifying such areas
in various basins.
ONGC added one more basin (Vindhyan) to the hydrocarbon
map of India by testing the well, Hatta-3 which flowed @ 62,044
standard cubic metre of gas per day. With this, ONGC discovered
08 out of 09 active basins of the country. ONGC has declared 4
New hydrocarbon discoveries (2 in onland and 2 in offshore) during
FY 2021-22 in its operated acreages. Six hydrocarbon discoveries
have been monetized during the year including 2 discoveries
notified during the FY 2021-22. ONGC plans to invest `3,10,000
million in next 03 years on exploration. This will help ONGC achieve
its acreage acquisition program to bring around 5,00,000 sq. km
under active exploration by 2025. Your Company has also lined up
25 projects in next 03 years on field development.
Beyond ambitious renewable energy target for ES 2040, your
Company is also looking to aggressively induct technology
across all facets of its business ensuring greater energy
efficiency, more productivity and improving safety performance.
This focus has only sharpened in the wake of the COVID-19
pandemic which has reset expectations and priorities of our
business. ONGC is also focused on leveraging its extensive
experience in meeting vast and complex challenges to
advance solutions at scale in the highest-emitting sectors of the
economy and keenly striving to enhance its renewable portfolio.
ONGC is exploring growth options in low-carbon businesses,
technologies like clean hydrogen and carbon capture, utilization,
and storage to lessen emissions intensive footprint and steadily
wants to increase its size and scale in renewable sector.
Extra cash generated in a higher commodity price scenario may
allow E&P companies to reinforce their financial position and
to move into the next phase of the capital allocation framework.
Companies must now, in all probability, also invest resources
towards making their portfolio lighter or more diverse depending
on their expertise, future opportunity set and shareholder / investor
demands.
5. Risks and Concerns
The biggest impact on physical oil fundamentals so far in 2022 is on
the demand side because of prevailing geo political concerns. But
this is expected to shift as China will start reopening its lockdowns
areas.
There is diminishing likelihood of a revitalized US-Iran nuclear
deal, which will keep out 1 MMb/d of additional Iranian oil output
that had been expected to begin to enter the market later in 2022.
Other factors include OPEC+ running out of spare capacity,
falling Russian oil production, the European Union eliminating
most Russian oil imports, the risk of US supply gains falling short
of expectations as producers adhere to capital discipline, and oil
inventories that are already very low.
INTEGRATED ANNUAL REPORT 2021-22
Russia’s isolation following its invasion of Ukraine is deepening,
Russia has historically been a source of low-cost oil for the world
market. IHS in its report expects Russian crude and condensate
output to fall from 10.4 MMb/d in 2021 to 9.1 MMb/d in 2022. Further
output declines are expected over the longer term given Russia’s
loss of foreign investors and access to international capital and
technology. Amid the widening supply and demand uncertainties,
oil market volatility remains rife.
For oil companies, an array of issues have influenced capital
planning strategies, these factors include the industry’s growing
emphasis on the energy transition, rising inflation, Govt. regulations,
geopolitical concerns and more recently a surge in commodity
prices and an increased focus on energy security following Russia-
Ukraine conflict. High oil prices poses risk for less capital discipline
which reduces the focus on new opportunities, companies focus
more on the core business through higher capex spending. Current
O&G price regime is apt for companies to fund their sustainability
commitments.
Further, domestic gas sector is prone to price fluctuations The fact
that our project pipeline is quite gas-rich with break-evens in the
USD5-USD9/MMBtu range-current price range will support the
vision of Gas based Economy. We are hopeful that the setting up of
the online gas hub - India Gas Exchange - is the first step towards
liberalising prices and moving away from the current formula which
is a derivative of international gas-rich and liquid hubs that do not
really reflect the reality of our domestic market. ONGC has acquired
5% equity in Indian Gas Exchange (IGX) as strategic investment and
is also a member of IGX. ONGC has become the first Exploration
and Production (E&P) company in India to trade domestic gas on
Indian Gas Exchange from its KG-98/2 block.
The expanding LNG business also supports its global reach, and
with the emerging concept of ‘green LNG’ it will gain traction even
among the more climate-forward regions of the world. Under more
aggressive scenarios where world transitions faster to lower carbon
ecosystem, the verdict for more oil is quite extreme – IEA in its NZE
case sees oil demand at 72 mb/d in 2030 and 24 mb/d by 2050.
Natural gas demand increases in all scenarios over the next five
years, with sharp divergences afterwards. Many factors affect to
what extent, and for how long, natural gas can retain a place in
the energy mix when clean energy transitions accelerate, and the
outlook is far from uniform across different countries and regions.
In the NZE, demand drops sharply from 2025 onwards and falls
to 1,750 bcm in 2050. By 2050, more than 50% of natural gas
consumed is used to produce low-carbon hydrogen, and 70% of
gas use is in facilities equipped with Carbon Capture Utilization and
Storage (CCUS). Whereas, Rystad Energy has forecasted that oil
demand to peak at 107 million bpd in 2025 and then progressively
decline to 51 million bpd by 2050. While these are merely forecasts
right now and much depends on how actually leading countries
or regions or economic blocs like EU and countries like US and
China move ahead with implementing their COP-21 commitments
and their own internal Net-Zero goals/ policies.
Oil and gas companies have kept their exploration spending low
following the market crashes in the middle of the last decade
and more recently from the damage wrought on global demand
by the Covid-19 pandemic. A rise in oil prices from last year has
not directly translated into a similar hike in exploration capex, as
upstream players maintain financial discipline and focus on high-
quality prospects. Exploration drilling activity saw a significant drop
in 2020 due to the impact of the Covid-19 pandemic on global
oil demand. The total number of exploration wells drilled in 2021
was on the low side with a marginal drop of around 5% from the
previous year, however there was an opposite trend for offshore
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wells where activity increased. Rystad Energy in its analysis expect
a similar trend in 2022 and could see an around 10% increase in
offshore well numbers this year.
ONGC, however, continues to aggressively pursue exploration
programs to maximize its reserve base as well as to augment the
country’s prospective hydrocarbon-bearing areas. This means a
combination of near-field appraisal and conventional wildcats. Your
Company also runs the risk of running into unplanned delays on
account of various environmental and regulatory issues. A single
window clearance system may be expedited to facilitate prudent
utilisation of resources and enable timely delivery of results in
strategic and economically sensitive sector like oil and gas.
Loss of valued experience, in a technology-intensive sector like
E&P, where the pool of expertise is already limited is a serious
obstacle. The possibility of not attracting enough talent into the
sector is an area of grave concern. However, diversification and
technology-integration could not only ease people requirements of
companies but may be useful to get the younger generation to join
this vital industry by offering a different value proposition.
ONGC has implemented updated OISD Standards to improve
contingency combat capabilities. International underwriters,
enabling a lower-than-peer insurance premium for these assets,
have rated ONGC offshore assets under ‘acceptable risk’.
Operational safety is a high-risk element for most upstream
operations. It requires companies to adopt a more holistic approach
through a well-designed and strong HSE framework. With future
operations, at least domestically, moving to more difficult terrains
with challenging geologies, the centrality of Safety cannot be over-
emphasized at this point.
Energy Strategy 2040
ONGC had adopted Energy Strategy 2040 as its strategic blueprint
for future in 2019. ‘Energy Transition’ was one of the fundamental
drivers of the roadmap and, going along, it is clear that this
transition is going to play an increasingly stronger role in charting
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
out the future policies and strategies.
ONGC remains committed to expand its production from both
domestic and overseas operations to 110 MMTOE by 2040.
However the pandemic has introduced further challenges in
production particularly from difficult plays. ONGC is in the process
of sourcing new technologies and partnerships for harnessing
these fields as it remains focussed on shorter business cycles.
In Downstream, Your Company is well poised to expand its capacity
through the expansion and green-field activities in progress at its
subsidiary units. Your Company is also expanding its footprints in
CGD & regas through group entities and has presence in 23 GA’s
across 12 states. A 5 MMTPA LNG regasification terminal at Chhara
port (Gir Somnath District) in Gujarat is under implementation
Your Company is progressing well on the path of strategic restructuring
of the group businesses with amalgamation of OMPL with MRPL.
In addition, your Company is also exploring opportunities in the
field of Renewables in India and abroad. ONGC has signed MoU
with SECI for pursuing clean energy Goals.
6. Outlook
Your Company is positioned well for further business avenues
backed by steady cash-flows. ONGC is exploring opportunities
in new energy as part of its transformation into a true energy
behemoth. Not only do we have the largest exploratory acreage
of 1,26,657 Km2 in India as an operator as on 31.03.2022. We
also are making continuous efforts to create a commercial play in
newer and frontier areas. Over the last few years, we have brought
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more and more discoveries into the production stream quicker
as well as made solid contributions to national E&P missions. In
terms of supplies, the Company has a strong pipeline of projects –
greenfield projects as well as brownfield redevelopment schemes.
Presented below is a brief overview of our current exploration status
as well as efforts in emerging areas and production enhancement
efforts.
A. Exploration
ONGC continues to make meaningful discoveries while
consolidating its reserves. It has adopted a ‘Play Based Exploration’
approach to accelerate the exploration activities from prospect
focus to play focus. The strategic change to play based concept
is primarily to assess the maximum YTF resource potential and
enhance the reserve base of the company. In the present OALP
regime, your Company is continuously evaluating prospectivity of
new areas to maximize its acreage holding as well as to carry out
aggressive exploratory efforts. Recent exploratory breakthrough in
terms of finding hydrocarbon in Bengal basin, commercial flow of
hydrocarbons in Vindhyan basin, and presence of gas within intrusive
in Mesozoic sequence in Kutch Offshore are major leads to boost
exploratory efforts. In Mahanadi offshore basin, your Company has
restarted its exploratory campaign. With the culmination of fifth
round of Open Acreage Licensing Policy (OALP) bidding, ONGC
was awarded 24 blocks as an operator in onshore and offshore
areas falling in 3 tier category Indian sedimentary basins adding
exploration acreage of 46,313.36 Km2. Your Company participated
aggressively in the OALP rounds VI & VII held during the year and
emerged as the highest bidder winning an acreage measuring
34,097 Sq. Km. in OALP Round VI against the total offered area of
35,346 Sq. Km. ONGC emerged as sole bidder in 3 blocks in OALP-
VII and is expecting an addition of at least 9,397 Sq. Km.
Currently, all the awarded OALP blocks are in exploratory phase.
Cumulatively as on 01.04.2022, a total 3,047.66 LKM of 2D seismic
data and 8,965.05 SKM of 3D seismic data has been acquired
and one exploratory well has been drilled in OALP Blocks. Further
exploration activities are in progress.
The significant potential growth areas in exploration are:
• Kopili, Sylhet, Barail, Bokabil and Tipam in South Assam Shelf
area, Kuargaon-Mahakuti-Lakwa-Lakhmani-Banamali-Safrai
corridor In North Assam Shelf, Lower Bhuban play in high-
pressure area in Rokhia field, Middle Bhuban formation in
Kunjaban field
• Exploration focus in the coming years will be oriented towards
probing Early Paleocene Olpad, Late Paleocene OCS/
Mandhali and Early Eocene YCS/Chhatral, Paleocene-Early
Eocene Panna Play with significant YTF potential.
• Kutch-Saurashtra will be of prime importance in the coming
years. Plio-Pleistocene play in deep water block KG-DWN-98/2
& Bhuvanagiri play shall also be targets for future exploration.
• Exploration focus will also be oriented towards opening of
new potential corridors in newly acquired OALP blocks in Son
Valley Vindhyan Basin especially for Rohtas, Mohana Fawn,
Jardepahar and Kajrahat plays.
• Probing of sub-thrust Dharamsala sequences in Palampur-
Sarkaghat areas and Subathus/ Bilaspur Limestone in
Palampur thrust areas in Kangra-Mandi sector of Himalayan
Foot hills will remain as prime focus areas for future exploration.
• For the first time, ONGC will venture into Bikaner Nagaur
Basin through its newly acquired OALP block to largely probe
potential of Jodhpur and Upper Carbonate plays.

B. Development of new fields
On the production front, while legacy fields continue to be the
mainstay of our base production, there is significant traction on the
development of new fields as well as new schemes for maximizing
recovery in mature areas.
ONGC is cognizant of the role it assumes in the national energy
landscape. It has made cumulative core E&P spends of over
` 1,500 billion over the past 5 years. As on 01.04.2022, 20 major
projects are under implementation with a total projected cost of
around ` 5,90,000 million with envisaged gain of ~85.5 MMTOE.
Among these is ONGC’s mega offshore deep-water project in
East Coast, Cluster-2 Development of KG-DWN-98/2. U Field of
this project has been fully monetised with the opening of third well
U-1-A. The completion of this project is expected to substantially
enhance the Gas portfolio of your Company.
Further, your Company, supported by Government’s policy support,
is strongly pursuing improving recovery from existing areas. As part
of expanding its EOR portfolio under the ER policy, 211 fields of
ONGC located in onshore and offshore areas were considered for
screening. Total of 33 ER Proposal were submitted, out of which 17
have already been approved. Two fields, Gandhar GS-9 & Gandhar
GS-11, are under feasibility Study.
ONGC for the first time executed a Pilot polymer flood project in
heavy oil field of Mehsana. The Pilot was completed on 15.09.2020
before the scheduled period. The pilot was successful in achieving
all its objectives. The incremental gain is 5057 m3 in 13 Months
against FR envisaged 4960 m3. The closure report was approved
by DGH on 08.11.2021. Commercial scheme for the same has
already been submitted and envisages incremental oil gain of 1.79
MMt (~ 5 % over BAU) and recovery of 23.3 % by 2046.
7. Internal Control Systems
To manage the large portfolio, your Company has institutionalized
robust internal control systems to continuously monitor critical
businesses, functions and operations; particularly field operations.
The top management of your Company monitors and reviews
various activities on continuous basis. A set of standardized
procedures and guidelines has been issued for all the facets of
activities to ensure that best practices are adopted and those
percolate even up to ground level.
Your Company has a dedicated Performance Management and
Benchmarking Group (PMBG) which monitors the performance
of each business unit against the Key Performance Indicators
(KPIs) defined in the Performance Contracts between the top
management and the Key Executives. As part of its push for
systemic transformation and strengthening of control systems, your
Company has placed adequate emphasis on institutionalization
of tools, practices and systems that facilitate greater operational
efficiencies and workplace productivity. Your Company has
introduced E-Grievance handling mechanism for quick redressal of
grievances of its various stake-holders.
Your Company has dedicated Internal Audit (IA) group which carries
out audits in-house. At the same time, based on requirement,
specialized agencies are engaged to carry out audit in the identified
areas. Statutory auditors are appointed by Comptroller and Auditor
General (CAG) of India for fixed tenures.
Third party safety audits are conducted regularly for offshore and
onshore installations by established national and international
HSE agencies such as Oil Industry Safety Directorate (“OISD”), an
organization under the control of the MoPNG, which issues safety
guidelines. Further, subject to the safety regulations prescribed by
the Directorate General of Mines and Safety (DGMS), each work
INTEGRATED ANNUAL REPORT 2021-22
center has teams dedicated to HSE, which execute the safety
guidelines prescribed by OISD as well as DGMS. HSE teams are
also responsible for obtaining necessary licenses and clearances
from the State Pollution Control Boards.
All transactions in the company are carried out on upgraded SAP
S/4HANAsystem. It is the successor to SAP R/3 and SAP ERP and
is optimized for SAP’s in-memory database SAP HANA. Proper and
adequate system of internal control exists to ensure that all aspects
are safeguarded and protected against loss from unauthorized use
or disposition and that each transaction is authorized, recorded
and reported. The system further ensures that financial and other
records are fact-based and reliable for preparing the financial
statements.
Outcome Budget analysis: Your Company has established the
linkages of budget expenditure with anticipated outcomes to
have clear sight on the future growth orientation parameters.
Expenditure proposed in Budget towards Development drilling
and creation of Capital Facilities is co-related with the incremental
gain in Oil and Gas production targets for next 5 years. Some of
the other parameters included for outcome budget analysis are
profitability variation analysis, budgeted Balance Sheet and Cash
Flow, sensitivity analysis on profitability and cash flow as a result of
changes in Crude Price and Exchange Rate.
8. Human Resource Development
Employees are the cornerstone of ONGC’s growth and value
creation. ONGC’s HR Vision is to build and nurture a world class
human capital by continuously innovating and adopting best-in-
class HR practices through engaged, empowered and enthused
employees.
Your Company’s talent management strategy is focused on building
an optimal and competent workforce to meet business needs
and is centred around workforce planning and talent acquisition,
performance management, learning & development, career growth,
succession planning, leadership development, and extending best
of employee facilities, welfare benefits and work environment. As
on 31.03.2022 there were 27,165 employees on rolls of ONGC.
Even amidst the challenges of pandemic, ONGCians ensured
critical supplies of Oil & Gas through their commitment, and spirit
of collective collaboration & achieved a stellar physical & financial
performance during the year.
Capacity building of the workforce is a priority area, with dedicated
institutes effectively catering to the learning & development needs
of our employees to efficiently meet the challenges of dynamic &
evolving E&P industry. ONGC also has tie-ups with various reputed
national & international institutions, agencies and business schools
for this purpose. During FY 2021-22, learning methodologies were
continued on online mode. 19,219 executives and 4,338 non-
executives were imparted training in relevant domains, spanning
66,660 executive and 9617 non-executive training days.
Learning Management System (LMS) undertaken by ONGC is a
pioneer project under the Government’s Digital India Initiative.
LMS portal brings competency-based learning, to enable self-
paced continual learning, through learning pathways, world class
trainings, latest content and assessment-based progress. With this,
ONGC has become the first PSE to onboard Learning Management
System in 2022 under Mission Karmayogi launched by Hon’ble
Prime Minister.
Leadership Development: ONGC has in place strategic
development interventions across executive levels, to
build and nurture a continual pipeline of energy leaders.
During the year, ONGC launched Harvard ManageMentor – a
management development program [e-learning] covering more
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than 3,100 executives. Further, to take care of development needs
of the young officers, under ONGC Mentor Mentee Exercise 2021-
22, 600 Mentors have been initiated into the mentoring journey, who
are each mentoring 1-2 young executives from their work centre.
Digitisation of HR Processes: A number of digital initiatives
were taken up, during the year, towards improved employee
processes, HR workflows, digitization of Trust records, in line
with the organization’s push for technology & digitization. ONGC
has introduced IT Enabled paperless Medical Referral process
system through Medical Smart Cards (ONGCCares) to regular/
retired employees & their dependents thus making the system
more convenient & transparent. Further, Paperless Medical
reimbursement processes and referral systems was also launched
in 2021, directly impacting more than 1.5 Lakh beneficiaries,
leading to considerable reduction in carbon footprint, as well as
system improvement.
Continuous communication & connect of top leadership with
operations teams at ONGC locations across the country was
ensured to reinforce employee safety, boost workforce morale
and provide all necessary support for smooth operations. Towards
supporting its workforce for timely immunisation, ONGC organized
Vaccination camps at various work locations across the country for
employees and secondary workforce.
Your Company continued its support for development of sports in the
country by providing employment opportunities to sportspersons
and also granting scholarships to budding talents in 22 games.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Hon’ble Minister of Petroleum and Natural Gas & Housing and Urban Affairs
Hardeep Singh Puri at the Platinum Explorer Rig in Eastern Offshore
138
Your Company sponsored various sports associations/ federations/
sports bodies for organizing sports events as well as developing
sporting infrastructure. The endeavours of your Company, towards
Human Resource development, are well recognized in the industry
with ONGC being ranked 404th in the Forbes World Best Employers
list 2021 & also featured in Great place to work among nation
builders.
9. Environment Protection and Conservation, Technological conservation
and Foreign Exchange Conservation
The particulars of environment protection and conservation are
detailed in the Business Responsibility and Sustainability Report
and Technological conservation and foreign exchange conservation
are detailed in the Board’s Report.
10. Corporate Social Responsibility (CSR)
A detailed overview of the Company’s CSR programmes and
spends are detailed in the Board’s Report.
11. Cautionary Statement
Statements in the Management Discussion and Analysis and
Directors Report describing the Company’s strengths, strategies,
projections and estimates, are forward-looking statements and
progressive within the meaning of applicable laws and regulations.
Actual results may vary from those expressed or implied,
depending upon economic conditions, Government Policies and
other incidental factors. Readers are cautioned not to place undue
reliance on the forward looking statements.