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Overseas Operations of ONGC
1. A STUDY of
INTERNATIONAL BUSINESS
OPERATIONS OF ONGC
Group 5
Abhishek Singh(11DM006)
Apurv Jain(11IT009)
B Shri Harsha(10FN108)
Hema Koppala(11FN041)
Shaurya Vikram Singh(11FN096)
2. Contents
• About ONGC
• OVL
• Factors for Success
• Competitive Strengths
• CSR
• New Opportunities
• Issues and Threats
• Recommendations
• Learnings
3. ABOUT ONGC
• Oil & Natural Gas Corporation is India’s 3rd
Most Valuable Company
• Has a market capitalization of Rs.2.32 trillion
• Owns and operates more than 11000
kilometers of pipelines in India
• Has paid the highest-ever dividend in the
Indian corporate history.
• Dividend paid in 2009-10: Rs 7,058 crore
4. About ONGC
• In 2010, it was ranked 18th in the Platts Top
250 Global Energy Company Rankings
• Every sixth LPG cylinder comes from ONGC.
5. ONGC VIDESH LIMITED
• OVL is a wholly owned subsidiary of ONGC
• OVL operates solely in foreign markets
• OVL acquired 39 projects in 15 foreign
countries
• Has tie ups with some of the biggest names:
– Petronas
– British petroleum
– Exxon etc.
6. ONGC VIDESH LIMITED
• Pursuing Oil and gas exploration blocks in
Algeria, Australia, Indonesia, Nepal, Iran, Rus
sia, UAE and Venezuela
• Investments of $1.7 billion in Sakhalin, Russia
• A one time investment of $690 million in
Sudan, biggest by any corporate in India
• Projects are spread out in
Vietnam, Russia, Sudan, Iraq, Iran, Lybia, Syri
a, Myanmar, Australia, and Ivory Coast
7. ONGC VIDESH LIMITED
• Going by the investments (Committed: US $
4.3 billion, and Actual: US $ 2.75 billion)
ONGC is the biggest Indian Multinational
Corporation
10. Some Projects
• Vietnam : Production Sharing Contract with
45 per cent stake in partnership with BP and
Petro Vietnam
11. Some Projects
• Russia: 20 per cent holding in the Sakhalin–1
• The investment is the single largest foreign
investment by India in any overseas venture
and the single largest foreign investment in
Russia.
12. Some Projects
• Sudan:25 per cent of equity in the Greater
Nile Oil Project
• Around 3 Million Tonnes of crude oil is
coming to India annually from this project.
14. COMPTETIVE STRENGTH
• All crudes attract a premium in the market.
• Strong intellectual property
base, information, knowledge, skills and
experience
• Maximum number of Exploration
Licenses, including competitive New
Exploration Licensing Policy (NELP) rounds
15. COMPTETIVE STRENGTH
• ONGC owns and operates more than 11000
kilometers of pipelines in India, including
nearly 3200 kilometers of sub-sea pipelines
No other company in India, operates even 50
per cent of this route length
16. CORPORATE SOCIAL
RESPONSIBILITY
• Successfully handled safety & environmental issues at
all sites.
• Proper treatment of affluent before releasing it in the
environment.
• At Sakhalin a $1 million micro-finance project with
Exxon Mobil.
• Park Beautification Programmers near foreign plants
• Over $200 million for public infrastructure like roads &
bridges both in Russia and Sudan
• Have regulations in place to ensure that the laws of the
land are followed
17. NEW OPPORTUNITIES
• Foray into retailing by launching OVaL, fuel
dispensing stations
First OVaL @ Mangalore
18. NEW OPPORTUNITIES
• Tie up with SHELL Bitumen co. for
manufacturing petroleum products in India
• Launched Mangalore SEZ to envisage an
investment of 35000 crores
• Foster tie ups with other Indian companies
like GAIL, OIL etc. to jointly explore and extract
oil & gas in India & abroad
19. ISSUES AND THREATS
• The US-Iraq war has left the Iraq Block 8
exploration project inoperative
• The dwindling petroleum reserves
• Competition from other regional players like
China National Petroleum corp.,
Korea Gas corp., Daewoo Intnl.
Corp.
• Has expertise over land ; while majority of the
crude oil is deposited deep beneath the sea
20. ISSUES AND THREATS
• The dictatorial regimes in Myanmar, Sudan &
political instability Libya and strict government
regulations in Iran
21. RECOMMENDATIONS
• Aggressively lookout for new oil blocks
• An overall organizational restructuring
i.e., vertical to horizontal to facilitate faster
communication
• Keep upgrading technology to have an edge
over regional players
22. RECOMMENDATIONS
• Increase recovery from a low 28% to 40-50%
(technologies)
• Increase presence in the fuel retailing business
by opening more pumps all over India
• Form joint ventures with local companies to
explore oil in India and abroad
23. LEARNINGS
• Think global act local . ONGC has made
sure that wherever they go they keep in mind
the culture , ethics and the laws of the land
• If a company cannot adapt and adjust to the
local environment it might not last long
24. LEARNINGS
• ONGC & OVL have proved that Indian
companies can beat global standards by being
the first Indian company to figure
in double digits in Fortune 500 list
• Corporate Social Responsibility is an important
tool to be used by companies