FUTURE ONGC Directors Report

Dear Shareholders,
The, on behalf of the Board of Directors of your Company, am pleased to share with you the achievements and highlights of your Company during the financial year ended March 31, 2017 and to present the 24th Annual Report on the business and operations of Oil and Natural Gas Corporation Ltd. (ONGC) and its Audited Financial Statements with the Auditors'' Report and Comments on the Accounts by the Comptroller and Auditor General (CAG) of India and the reply of the management thereto.
The challenges that marked the macro environment, viz. low commodity prices, uncertain demand outlook and slow global economic recovery, in FY''16 persisted in FY''17 as well. Crude prices today are distinctly higher than they were in early 2016. However, it would be prudent for oil and gas companies to remain wary as the recovery has not been as robust and stable as one would have liked it to be. It is reflective of the larger economic environment of the world where secular growth has not returned to the markets post the global financial meltdown and the subsequent Eurozone slowdown. While this extended period of low commodity prices poses challenges for E&P companies in terms of ambitious exploratory efforts and development from difficult areas, it is a source of meaningful monetary comfort for an import dependent economy likes ours.
That being said, price-related pressures are likely to ease going forward as companies learn to adapt and improvise in this ''new normal'' of low prices. We must not forget that our industry has faced numerous challenges in the past and has always come out stronger each time. This ''new normal'' will also be defined and influenced by the international political developments in the past one year and the remarkable growth (both in terms of investment as well as capacity addition) of renewable energy sources, adding a further layer of complexity to the operating environment of oil and gas.
In this prevailing environment of increased volatility and uncertainty, it has become more important than ever for companies to sharpen their focus on promising growth avenues while consolidating their key areas of strength.
For your Company, it meant a more aggressive approach to cost optimization and operational efficiencies in our legacy business and stepping up activity in the area of unmonetized discoveries with comprehensive planning and robust project management philosophy.
Considering the critical importance of your Company in the country''s overall energy infrastructure, the decisions and actions of today will, to a large extent, not only set the ground for a significant transformation that will enable it to contribute even more expansively to the country''s energy sector but also ensure its competitiveness in any operating environment.
Despite the challenges of the business and its surrounding environment, your Company along with its group companies has registered yet another year of strong performance and made substantial progress on most of these priority areas. In addition, performance in the other areas of business where your Company has significant interests also recorded important milestones.
Backed by an intensive and continuous exploration programme, your Company made 23 oil and gas discoveries in various basins of India out of which eight discoveries have already been monetized. During the year, your Company produced 22.25 MMT ofoil against 22.37 MMT during FY''16. Natural gas production was at 22.09 BCM against 21.18 BCM during FY''16, thereby recording an increase of 4%. Your Company''s share in domestic joint ventures'' production has been 3.28 MMT of oil and 1.18 BCM of gas. Combining the two, total domestic production has been 25.53 MMT of oil and 23.27 BCM of gas. VAP production increased from 2.77 MMT in FY''16 to 3.24 MMT in FY''17 (increase of 17%) with contribution from C2-C3 and Hazira plants. All joint ventures of your Company established for value-chain integration i.e.,- ONGC Petro-additions Ltd. (OPaL), ONGC Teri Biotech Ltd. (OTBL), ONGC Tripura Power Company Ltd., (OTPC), Petronet MHB Ltd. (PMHBL), Dahej SEZ Ltd. (DSEZ) and Mangalore SEZ Ltd. (MSEZ) are now operational and have started generating revenue.
The significant milestones achieved by your Company during 2016-17:
- Your Company made 23 Oil and Gas discoveries out of which 13 were Onshore and 10 were Offshore. 4 of these discoveries are in New Exploration and Licencing Policy (NELP) blocks. Focusing on quick monetization, 8 of these discoveries have already been put to production.
- With these 23 discoveries, your Company accreted 64.32 MMtoe of 2P reserves in the domestic fields. RRR with 2P reserves during the year has been 1.45.
- With Jabera discovery, Vindhayan Basin has made entry into the oil reserves map of India.
- With recent discoveries in Kutch offshore, focus is on bringing this new basin on production.
- Your Company has taken up development of KG-DWN-98/2 block in Krishna-Godavari (KG) Basin with an investment of more than US$ 5,000 million (approx. Rs.340,000 million). Peak oil from the field is around 78,000 bpd and gas @ 15.57 MMSCMD.
- Gas production commenced from S1 Deep Water field (water depth around 280M) in KG Basin @ 0.9 MMSCMD and the first Deep Water gas well to fetch a price of US$ 5.05 per MMBTU under government approved pricing and market freedom policy.
- Gas sales increased from 16.08 BCM in FY''16 to 17.06 BCM in FY''17; an increase of 5.80 %.
- Your Company deployed 35 rigs in offshore, the highest ever and drilled 501 wells again the highest ever (401 development wells, the highest ever). Commercial speed during the year has been 1,472; an increase of more than 24% compared to 2015-16.
- Testing the efficacy of B-90 culture in the wells of Becharaji field Microbial Enhanced Oil Recovery (MEOR) job was carried out in 3 wells of Bechraji in 2016-17.
- Gas flaring during the year has been 529 MMSCM which reduced from 3.06% (FY''16) to 2.40% (FY''17); a reduction of21.6% over the previous year.
- Additional development of Vasai (East): facility creation (2 well platforms and Subsea pipeline) completed. 12 wells out of 20 wells drilled and added additional oil production of 7000 BOPD.
- Besides 28 ongoing oil and gas development projects, 6 development projects worth Rs.76,700 million have been taken up during FY''17. The projects are NW B-173A, B -147, BSE-11, 4th phase of NBP Field and R-Series and redevelopment of Santhal field.
- Your Company signed Farm-in/Farm-out (FIFO) agreement with GSPC on 10th March, 2017 to acquire 80% PI with operatorship in block KG-OSN-2001/3.
- Commencement of Coal Bed Methane (CBM) field development operations in Bokaro and North Karanpura.
- Gross Revenue of the Company stood at Rs.779,078 million and for ONGC Group it has been Rs.1,421,490 million.
- Your Company recorded a Net Profit of Rs.179, 000 million during the year under review. Net Profit of ONGC Group increased by 59% to Rs.204, 979 million (Rs.128, 752 million in FY''16).
- ONGC Videsh Limited (OVL), a wholly owned subsidiary of your Company, registered highest-ever production of 12.80 MMtoe of O+OEG during the year. It recorded Gross Revenue of ''100,800 million and Net Profit of Rs.6,974 million (against loss of Rs.36,401 million in FY''16).
- Mangalore Refinery and Petrochemicals Limited (MRPL), a subsidiary of your Company, recorded highest-ever throughput of 16.27 MMT during FY''17.
- MRPL recorded 17% increase in Turnover to Rs.599,801 million (Rs.509, 623 million during FY''16) and highest ever Net Profit of Rs.32,932 million (Rs.5,058 million in FY''16).
- ONGC Tripura Power Company Ltd. (OTPC) clocked highest-ever Annual Gross Generation of 4,170 million units.
- Six ONGC team members successfully accomplished Mission Everest. This is first time that a Corporate has taken a Mission to send its team to mount the highest peak of the Earth.
These achievements reflect your Company''s proven commitment towards sustained growth and performance excellence. Consistently driven by well-defined growth strategies, your Company delivers and improves performance year-on-year basis which is the benchmark of excellence in various facets of E&P activities and has also been well recognized through peer-and-public evaluations.
Global Recognitions
Your Company has been ranked number one E&P Company in the world by Platts Top 250 Global Energy Company Rankings-2016 and 20th among global energy majors based on assets, revenues, profits and Return on Invested Capital. The leading international business journal Forbes has ranked ONGC the 3rd largest in India and 220th worldwide based on sales, profit, assets and market value. Your Company has strengthened its brand position in India, climbing from 10th position during previous year to 7th position, according to a study conducted by consultant Brand Finance. Further, the Rs.2016 EU Industrial R&D Scoreboard'' listed your Company at the 12th position in the list of oil and gas companies based on Research and Development (R&D) expenditure.
Performance 2016-17
During FY''17, your Company made 23 Oil & Gas discoveries out of which 13 were Onland and 10 were Offshore including 4 discoveries in the blocks awarded under NELP. All these 23 discoveries are healthy pointers to the continued performance of the Company''s exploratory efforts. Details of these discoveries are tabulated as below:
Sl. No. Well No. Basin/Sub-basin Hydrocarbon Type Pool/ Prospect NELP/ Nomination
1 KGS092NA-SRI-1/SRI-AA Krishna Godavari (KG Offshore-SW) Basin Oil & Gas Prospect NELP
2 B-34-2/B-34-B Mumbai Offshore Basin Oil & Gas Prospect PML
3 Suphayam-2/S UA A Assam Shelf Basin Oil & Gas Prospect PEL
4 Jabera-4/RJBF Vindhyan Basin Gas Prospect PML
5 Dayalpur-1/SUAB Assam Shelf Basin Oil & Gas Prospect PML
6 B-157N-1/B-157N-A Mumbai Offshore Basin Oil & Gas Prospect PML
7 GS-71-1/GS-71-AA Krishna Godavari (KG Offshore-SW) Basin Oil & Gas Prospect PML
8 B-154N-1/B-154N-A Mumbai Offshore Basin Oil & Gas Prospect PML
9 South Akholjuni/Akholjuni-29/ AKAP Cambay Onland Basin Oil & Gas Prospect PML
10 D-30-2/ D-30-A Mumbai Offshore Basin Oil & Gas Prospect PML
11 G-1-N-2 / G-1-N-AB Krishna Godavari (KG Offshore-SW) Basin Oil & Gas Prospect PML
12 GKS101NCA-1/GKS101NCA-A Kutch Offshore Basin Oil & Gas Prospect NELP
13 MBS051NAA-2/NAA-B Saurashtra Offshore Basin Gas & Condensate Pool NELP
14 Dahej/Dahej-20/DJAT Cambay Onland Basin Gas Pool PML
15 Nambar/Nambar-12/NRAF Assam Shelf Basin Gas Pool PML
16 Nadiad/ Nadiad-4/NDDA Cambay Onland Basin Oil Pool PML (NELP)
17 Kesanapalli / Kesanapalli West Deep -1 /KWD-AA Krishna Godavari Onland Basin Oil & Gas Pool PML
18 West Penugonda/ Thurupu Vipparu-1 / TVAA Krishna Godavari Onland Basin Gas Pool PML
19 B-12C / B-12C-2 / B-12C-A Mumbai Offshore Basin Gas & Condensate Pool PML
20 Geleki / G-390 / GKHX Assam Shelf Basin, Oil Pool PML
21 Khoraghat / Khoraghat-38 Z / KHBB_Z Assam Shelf Basin Oil & Gas Pool PML
22 Olpad/Olpad-47/OPAM Cambay Onland Basin Gas Pool PML
23 Gandhar-724(GGAM) Cambay Onland Basin Oil Pool PML
The significant discoveries are - Kesanapalli West (KG Basin), Suphayam and Dayalpur (Upper Assam). Supahyan and Dayalpur have opened up new exploration targets by establishing multilayered hydrocarbon occurrence. With Jabera discovery, your Company brought Bindhayan Basin onto the oil reserve map of India. With these 23 discoveries, your Company accreted 64.32 MMtoe of 2P reserves in the domestic fields.
Discoveries put on production
Dahej-20, Gujarat Suphayam-2, Jorhat
Akholjuni-29, Gujarat Dayalpu r-1, Jorhat
Gandhar-724, Gujarat Geleki-390, Assam
Nambar-12, Jorhat Kesanapalli-West, AP
In KG Offshore, two new oil finds, each one in shallow water (GS-71) and deep water (G-1-N) have produced much encouraging results during initial production testing. 8 out of 13 onshore discoveries have already been put on production during FY''17 itself. The ultimate reserve of 8 monetized discoveries is 3.4 MMtoe and has production potential of 0.218 MMtoe of O+OEG per year.
Re-assessment of Hydrocarbon Resources
Government of India (GoI) initiative for ?Re-assessment of Hydrocarbon Resources? in Indian sedimentary basins has been undertaken by your Company. About 100 geoscientists of ONGC, in 12 working teams, are on the job. These studies are ongoing in 26 different basins -onshore, shallow water, deepwater. The project is expected to be completed by Nov''17.
National Seismic Programme
Your Company has been actively associated with National Seismic Programme (NSP), initiated by Government of India under which 48% of unappraised sedimentary in onland area is being covered through seismic survey. Out of proposed acquisition, processing and interpretation (API) of 48,243 LKM of onland data, your Company will be taking up API of 40,835 LKM in all states other than North East (NE).
Details of discoveries in NELP blocks (since inception till 01.04.2017)
Out of the 114 NELP blocks awarded to/acquired by your Company, as the operator, 32 blocks are operated presently and the remaining 82 blocks are relinquished so far. Exploration/ appraisal programme is under way in all the active blocks. As on 01.04.2017, your Company has a total of 64 discoveries, out of these, 58 discoveries (18 in deep water, 21 in shallow water and 19 in onland areas) are in 25 NELP blocks and the remaining 6 discoveries (4 deep water, 2 onland) fall under two blocks acquired from other operators. Commencement of production from these discoveries is governed by stipulation laid down in the respective Production Sharing Contracts (PSCs) and will be taken up after successful completion ofappraisal programme followed by submission of Declaration of Commerciality (DoC) and approval of Field Development Plan (FDP) by Directorate of Hydro Carbon (DHC).
Reserve accretion & Reserve Replacement Ratio (RRR)
During the year, accretion to in-place Hydrocarbons (3P-Proved, Probable and Possible), from the Company operated fields in India, has been 203.24 million metric tonnes (MMT) of Oil and Oil equivalent Gas (O+OEG), out ofwhich about 87 percent accretion has been due to exploratory efforts. Reserve Replacement Ratio (RRR) during the year has been 1.45.
Total in-place reserve accretion during 2016-17 in domestic basins, including the Company''s share in PSC JVs, stands at 210.61 MMtoe (7.37 MMtoe from JVs). As on 01.04.2017, total in-place hydrocarbon volume of ONGC group stands at 9,655.36 MMtoe against 9,444.74 MMtoe as on 01.04.2016. The ultimate reserves (3P) have been estimated at 3,132.35 MMtoe as against 3,075.51 during the FY''16. Voluntary disclosures in respect of Oil & Gas Reserves, conforming to SPE classification 1994 and US Financial Accounting Standards Board (FASB-69) have been followed in your Company.
The following table gives the details of reserve accretion (2P-Proved and Probable) for the last 5 years in domestic basins as well as from the overseas assets:
Ultimate Reserve (2P) accretion O+OEG (in MMtoe)
Year Domestic Assets (1) ONGC''s share in domestic JVs (2) Total Domestic (3)=(l)+(2) ONGC Videsh''s Share in Foreign Assets (4) Total (5)=(3)+(4)
2012-13 67.59 4.23 71.82 10.09 81.91
2013-14 56.26 4.29 60.55 213.24 273.79
2014-15 61.06 -1.03 60.03 20.03 80.06
2015-16 65.58 0.80 66.38 -7.22 59.16
2016-17 64.32 0.22 64.54 120.28 184.82
Note: Reserve accretion reported in terms of 2P reserves
Statement of Reserve Recognition Accounting (RRA)
Reserve Recognition Accounting (RRA) is a voluntary disclosure towards recognizing income at the point of discovery of reserves and seeks to demonstrate the intrinsic strength of an organization engaged in exploration and production of hydrocarbons with reference to its future earning capacity in terms of current prices for income as well as expenditure. This information is based on the estimated net proved reserves (developed and undeveloped) as determined by the Reserves Estimates Committee of the Company.
As per FASB-69 on disclosure about Oil and Gas producing activities, publicly traded enterprises in USA that have significant Oil and Gas producing activities, are to disclose with complete set of annual financial statements, the following supplemental information:
a) Proved Oil and Gas reserve quantities
b) Capitalized costs relating to Oil and Gas producing activities
c) Cost incurred for property acquisition, exploration and development activities
d) Results of operations for Oil and Gas producing activities
e) A standardized measure of discounted future net cash flows relating to proved Oil and Gas reserves quantities
Your Company has disclosed information in respect of (a) to (d) above in the Annual Financial Statements.
Your Company has also made voluntary disclosure on standardized measure of discounted future net cash flows relating to proved oil and gas reserves at Annexure-A'' to this report as statement of RRA.
Oil & Gas Production
On standlone basis, in FY''17 the Company''s domestic crude oil production level registered at 22.25 MMT against 22.37 MMT in FY''16. Oil production from onshore assets increased by 2.4% while offhore registered a decline of 1.6%. Increase in onshore oil production has been mainly due to various initiatives and early monetization of discoveries in Ankleshwar, Cauvery (Madnam) and Rajahmundry (Keshnapalli West), etc. Domestic PSC JVs contributed 3.31 MMT of oil against 3.56 during FY''16.
Natural gas production (from domestic operated fields) during FY''17 has been 4% higher than the previous year (22.09 BCM against 21.18 during FY''16). The Company''s onshore gas production increased by healthy 9.1% where as offshore production increased by 2.9%. Onshore gas production increased mainly due to commissioning of GDUs in Rajahmundry, drilling of development wells and commissiong of Sonamura GCS in Tripura and GS-4 well in Gandhar. Incremental gas production in offshore was contributed by C-26 cluster/Daman fields in Western Offshore and Deep Water well S2AB in Eastern Offshore. Further most ofAssets registered increase in gas production during the year. Your Company''s share in oil and gas production from PSC JVs has been 3.29 MMT and 1.18 BCM respectively.
Oil & Gas production of ONGC Group, including PSC-JVs and from overseas assets for FY''17 has been 61.60 MMtoe (against 57.38 MMtoe during FY''16); an increase of 7.4%. Out of the total production of 33.96 MMT of crude oil, 65.5 per cent production came from the Company operated domestic fields, 24.8 per cent from the overseas assets and balance 9.7 per cent from domestic joint ventures. As far as natural gas production is concerned, majority of production (79.9 per cent) came from the Company operated domestic fields, 15.8 per cent from overseas assets and 4.3 per cent from domestic joint ventures.
Unit Production Qty Sales Qty Value (Rs. in millions)
FY''17 FY''16 FY''17 FY''16 FY''17 FY''16
Crude Oil (MMT) 25.53 25.93 23.86 24.15 548,036 511,316
Natural Gas (BCM) 23.27 22.53 17.94 17.10 139,398 182,239
Ethane/Propane 000 MT 420 375 420 375 8,557 8,945
Propane 000 MT 90 29 87 26 2,223 496
Ethane 000 MT 137 - 135 - 5,354 -
Butane 000 MT 31 - 30 - 1,131 -
LPG 000 MT 1355 1195 1352 1191 37,276 34,951
Naphtha 000 MT 1101 1043 1087 1065 30,455 30,609
SKO 000 MT 36 67 42 66 1,321 2,118
Others 1,113 894
Sub Total 774,864 771,568
Motor Spirit 000 KL 0.21 0.68 11 35
HSD 000 KL 0.43 1.16 20 49
Sub Total 31 84
Total 774,895 771,652

Production from Overseas Assets
During the year total production from overseas assets has been 12.80 MMtoe of O+OEG (Oil: 8.43 MMT; Gas 4.37 BCM) against 8.92 MMtoe during FY''16; an increase of 43% mainly due to incremental production from Sakhalin-1 (Russia) and additional production on account of acquiring 26% share acquisition in Vankorneft. Russia (56%), Vietnam (12%), Azerbaijan (7%), and Myanmar (7%) contribute 82% of equity oil and gas followed by Brazil (5%), Venezuela (4.9%), Colombia (4.3%) and Sudan (3.8%).
Technology Induction/Upgradation
Your Company gives utmost importance for induction and upgradation of technology in various areas of its operations to remain competitive. During the year the following technology were inducted:
- Suitable polymer squeezing technology to arrest sudden rise in water cut in North Kadi field of Mehsana Asset - Job execution in 8 No. ofwells done
- Deep Penetrating Retarded Acid System (DPRAS) & Self Diverting Acid Stimulation technology for wells of NBP & other fields of Mumbai Offshore -job execution in 30 No. of wells done
- Technology for deliquification for reviving production from gas wells of Ahmedabad Asset. The same is implemented in 2 No. of wells
- Resource optimization through Batch Drilling in Offshore & Pad Drilling in onshore
- Under Balanced Drilling
- Technology penetration in onshore drilling at par with offshore
- Use of Advanced Hybrid bits
Exploration of different hydrocarbon
(a) Basement Exploration:
Concerted efforts for Basement Exploration, a frontier exploration play, have been taken up by the Company as a major initiative. The prospects achieved success in Mumbai Offshore, Kutch offshore, Cambay, Cauvery and A&AA Basin have further enhanced the scope of basement exploration.
During the year, Basement fracture modeling and prospectivity analysis are also in progress in Assam & Arakan, Cauvery and KG and Kutch Offshore and West of Mumbai High Area of Western Offshore basins. Fracture model developed for Madnam field has been validated by Production Logging Tool (PLT) logs recorded in well MD-3 Sub and MD-7. Further, 7 exploratory wells and 8 development wells were drilled in different basins for basement prospect.
In A&AA Basin, exploratory well SU-3 flowed 3.5-7.2 m3/day oil with 11000 m3/day gas from basement during production testing. B-121-8 in Western Offshore Basin flowed oil @200 Barrels/day through %? choke, well BH-75 gave oil indications from basement during testing and another well N-24-5 in Mumbai High Field flowed oil at 190 barrels/day from Basaltic Basement. In Cauvery basin development well MD-3 Sidetrack, MD-7, MD-8 and MD-9 have flown oil from basement. In Madnam field cumulative oil gain is around 300 m3/day from basement.
For the development of discoveries in basement play, FDP approval has been obtained for Madanam Field and plan is under implementation. PML of Madanam field has been granted by GoI and grant from state government is awaited. FDP of Pandanallur Field, which also has basement play, has been submitted to DGH for approval.
(b) Exploration in HP-HT & Tight Reservoir:
Fields/Reservoirs with a sub-surface pressure of more than 10,000 psi and temperature of more than 350?F are classified as HP-HT reservoirs. The Company has prioritized HP-HT/Tight/Deeper plays in KG, Cauvery, Western Offshore Basin and Assam & Arakan Fold belt where such environment have been encountered during exploration for deeper pays. These plays have been an exploration challenge for drilling as well as for testing.
In addition, your Company after acquiring the operatorship of NELP block KG-ONN-2003/1 has submitted the FDP of two discoveries made in the block. Further, hiring desired technological support/ services from domain consultants and service providers are explored to maximize established/potential for monetization. An action plan has been prepared for monetization of 3 HPHT Fields - Nagayalanka, Periyakudi and Bantumilli South and first production from these efforts is likely to commence in 2017.
Unconventional & Alternate sources of energy
Your Company plans to continue its endeavor for exploration and development of unconventional like - Shale (CBM) etc. and alternate sources of energy. Necessary action plan is being worked out for exploration and exploitation of Non-Conventional and Alternate Sources of energy which has been perceived as the future sources of energy. The initiatives towards this are summarized below:
(a) Shale Gas/Oil Exploration:
Exploration for assessing the Shale gas/oil prospectivity has been initiated in 4 basins of the country viz., Cambay, KG, Cauvery and A&AA Basins as per the policy guidelines notified by Government of India (GoI) for exploration and exploitation of shale gas and oil by National Oil Companies (NOCs), your Company has identified 50 nomination PML (Petroleum Mining Lease) blocks under Phase-I. As on 31.03.2017, 22 assessment wells (5 exclusive shale gas in Cambay basin and 17 dual objective wells) in 19 PML blocks have been drilled and required data are being generated/ evaluated for Shale gas/oil assessment.
During the year, 4 dual objective wells in Cambay basin have been drilled. Laboratory studies of core and cutting samples collected in wells during the current year are in different stages of completion. A second zone in well JMSGA (JM#55) (instead of well number field/block may be mentioned) has also been hydro-fractured (HF) and indication of oil was observed during post-HF activation. Cumulative oil knocked out till 21.03.2017 was 2.35 m3. The well has been put on Gas Lift Value (GLV) for effective activation. Earlier, the well cumulatively flowed 19 m3 of oil with gas and about 173 m3 of flow back water from first zone.
(b) Coal Bed Methane (CBM):
The Government of India awarded total 33 blocks to various operators through four rounds of bidding and nomination. Out of these, your Company was awarded 9 CBM Blocks. Due to poor CBM potential, concluded on the basis of data generated in the exploratory activities, five blocks viz. Satpura (Madhya Pradesh), Wardha (Maharashtra), Barmer-Sanchor (Rajasthan), North Karanpura (West) and South Karanpura ( Jharkhand) have been relinquished.
(c) Gas Hydrate Exploration:
Your Company has been an active participant in the National Gas Hydrate Programmes (NGHPs). Towards this, Gas Hydrate Research & Technology Centre (GHRTC) was established on 14th September, 2016 at Panvel. The Centre would give impetus to the Gas Hydrate research & technology development and contribute to GOI''s plan to commercialize Gas Hydrates as energy resource at the earliest.
(d) Alternate sources of energy
For harnessing alternate sources of energy, your Company took structured initiatives.
- The contract for installation of a 10 MW Solar Plant at Hazira was awarded in 2016-17. The Notification of Award (NOA) was placed on 23.02.17 with scheduled completion period as seven months from NOA
- One 40 KW Roof Top Solar Power plant at KV Hazira was commissioned in 2016-17(06.03.17). Another three 20 KW Roof Top Solar Power plants were installed in Ahmedabad at IRS, Logging Section and Fire Station in December 2016.
Oil & Gas Projects
(a) Projects completed during FY''17
Sl. No. Name of the Projects Completion/ Commencement of Production Total Investment (Rs. in Million) Envisaged Oil & Gas Gain
1. Additional Development of Vasai East May, 2016 24,768 1.827 MMT of oil and 1.971 BCM of gas by 2029-30
2. Improved Oil Recovery of B-173A Field December, 2016 3,525 0.567 MMT of oil and 0.071 BCM of gas by 2025-26
3. Reconstruction of BPA & BPB Platforms March, 2017 11,385 -
4. Construction of 6 ETPs, Five at Ahmedabad and One at Ankleshwar March, 2017 3,176.4 -
Total 42,854.4
(b) Projects initiated during FY''17
The following 6 development projects were taken up.
Sl. No. Name of the Projects Estimated Cost (Rs. in Million) Incremental Oil & Gas Gain
1. NW B-173A Development Plan for Exploitation of Mukta pay - NW B-173A Field 4741.5 0.760 MMT of oil and 0.213 BCM of gas respectively by the year 2031-32.
2. 4th Phase Development of NBP field 9,686.1 2.08 MMT of oil by the year 2031-32.
3. Development of BSE-11 Block 5,113.0 0.20 MMT of oil, 0.37 MMT of condensate and 0.568 BCM of gas by 2030-31
4. Development of B-147 field 5,461.5 0.489 MMT of oil and 0.708 BCM of gas by year 2029-30
5. Development of R-series fields including revival of R-12 (Ratna) 40,068.3 7.03 MMT of oil and 0.881 BCM of gas by the year 2035-36
6. Redevelopment of Santhal field 11,625.6 3.44 MMT by the year 2029-30
Total 76,696.0
(c) Implementation of IOR/Redevelopment Schemes
To arrest the decline and improve recovery factor from mature fields, your company has successfully implemented several IOR schemes to sustain/augment oil & gas production from major offshore producing fields -Mumbai High, Heera & Neelam since year 2000-01.
To further improve the recovery from the matured fields, three major IOR Projects were initiated during the FY'' 14-15 and 15-16 and are as under:
- Two IOR Projects were initiated in FY 15 viz. ?Mumbai High North Redevelopment Phase-III Project with an investment of Rs.58,132.5 Milliion envisaging 6.997 MMT of oil and 5.253 BCM of gas by 2030 and Mumbai High South Redevelopment Phase-III Project with an investment of Rs.60688 Million envisaging 7.547 MMT oil and 3.864 BCM gas by 2030.
Production has commenced on both the above projects.
- One IOR projects was initiated in FY 1516 i.e. ?Neelam Redevelopment Plan for Exploitation of Bassein and Mukta pay of Neelam field? with an investment of Rs.28188.8 Million. The project envisages incremental production of 2.76 MMT of oil and 4.786 BCM of gas by year 2034-35.
(d) Fast track monetization ofMarginal Fields
Your Company is developing new and marginal fields in fast track to augment the oil and gas production. It is pertinent to mention here that many marginal fields in western offshore which were not techno-economically viable for exploitation earlier on standalone basis are now being developed with cluster concept.
Some of the marginal fields put on production in the last few years include NBP (D-1) with its additional development/ development of lower Pays, Vasai West, Vasai East with its additional development, North Tapti, BHE , SB-14, B-46 Cluster fields, C-24 cluster fields, B-22 Cluster fields, B-193 cluster fields, Cluster-7 fields and WO-16 cluster fields.
In addition, production has commenced from ?Development ofC-26 Cluster Fields? and ?Daman Development? projects in 2016-17 and would contribute further with drilling of more wells under these projects. Monetization of marginal fields under B-127 cluster is under implementation and would contribute in the coming years.
(e) Development of fields in Eastern Offshore
Major thrust is being given to develop discoveries made in the Krishna Godavari basin which is a promising basin with various discoveries like G1/GS-15, Vasishtha, S1, GS-29 and KG-DWN-98/2, etc.
Presently ?Integrated Development of Vasistha & S-1 Fields? is under implementation and is aimed to contribute 15.95 BCM of gas by year 2026. The production has commenced from deep water well S2AB under this project from May 2016 utilizing the existing G1 field facilities and remaining wells are under drilling and would contribute in coming years.
Further, to boost up oil and gas production from Eastern Offshore, one mega project for development of cluster 2 fields of NELP Block KG-DWN-98/2 was initiated in March 2016. The project is under implementation and envisages production of 23.526 MMT of oil and 50.7 BCM of gas by 2034-35.
Development of other discoveries in KG offshore such as KG-DWN-98/2 (Cluster-I & III fields), GS-49 and GS-29, G-4-6 fields, shallow water NELP block KG-OSN-2004/1, etc. are under various stages of appraisal/approval for development.
In addition to above initiatives, after the decision of Government of India to revert Ratna and R-Series fields in Western Offshore to the Company, Project ?Development of R-series fields including revival of R-12 (Ratna)? has recently been initiated, which envisages incremental production of 7.03 MMt of oil and 0.881 BCM of gas by the year 2035-36.
1. Financial Results
The Ministry of Corporate Affairs (MCA), vide its notification in its official gazette dated 16th February 2015, notified Indian Accounting Standards (Ind AS) applicable to certain class of Companies. Ind AS has replaced the existing Indian GAAP prescribed under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies Accounts Rules, 2014. For ONGC, your company, Ind AS is applicable from April 1, 2016 with a transition date of April 1, 2015 and IGAAP as its previous GAAP.
The following are the areas which had an impact on account of transition to Ind AS:
- Fair valuation of certain financial instruments
- Discounting of certain long term provisions like decommissioning provision
- Valuation of loans by Effective Interest rate method
- Accounting for proposed dividend
- Deferred tax on the above adjustments
- Valuation of equity instruments through other Comprehensive income
The reconciliations and descriptions of the effect of the transition from IGAAP to Ind AS have been provided in notes to account at note 56 in the Standalone Financial Statements.
Despite volatility in the crude oil prices and reduction in natural gas prices during 2016-17, your Company has registered Gross revenue of Rs.779,078 million and earned a Profit After Tax (PAT) of Rs.179,000 million, up by 10.91% over FY''16 (Rs.161,399 million).
(Rs. in million)
Particulars 2016-17 2015-16
Revenue from Operations 779,078 777,417
Other Income 75,481 70,094
Total Revenues 854,559 847,511
Profit Before Interest Depreciation & Tax (PBIDT) 386,266 392,495
Profit Before Tax (PBT) 252,155 235,988
Profit After Tax (PAT) 179,000 161,399
Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statement of its subsidiaries, associate company and joint venture in Form AOC-1, is appended to this report, which shall form part of the Financial Statements.
2. Dividend
Your company paid first interim dividend of Rs.4.50 per share of Rs.5 each (90%) which was pre-bonus. Second interim dividend of Rs.2.25 per share (45%) was post- bonus. The Board of Directors have recommended a final dividend of Rs.0.80 per share (16%) post bonus. This makes the aggregate dividend at Rs.9.075 per share (181.5%) before considering bonus as compared to 170% paid in 2015-16. The total dividend for 2016-17 will be Rs.77,641 million, besides Rs.15,789 million as tax on dividend amounting to 52.20% of PAT (inclusive of dividend tax). There was delay in remittance of unpaid dividend aggregating Rs.13.79 million to Invest Education and Protection Fund due to technical reasons which was beyond the control of the Company.
3. Management Discussion and Analysis Report
As per the terms of regulations 34(2) (e) of the SEBI Listing Regulations, the Management Discussion and Analysis Report (MDAR) forms part of the Annual Report of the Company.
4. Financial Accounting
The Financial Statements have been prepared in compliance with Indian Accounting Standards Ind-AS issued by The Institute of Chartered Accountants of India (ICAI) effective from 01.04.2016 and provisions of the Companies Act, 2013. Further, as per Ministry of Corporate Affairs (MCA) notification, the financial statements have been prepared as per the format prescribed under the Schedule III to the Companies Act, 2013.
Loans, Guarantees or Investments
Your Company is engaged in Exploration & Production (E&P) business which is covered under the exemption provided under section 186(11) of the Companies Act, 2013. Accordingly, the details of loans given, investment made or guarantee or security given by the company to subsidiaries and associates are not required to be reported.
Related Party Transaction
Particulars of contracts or arrangements with related parties referred to in section 188 of the Companies Act, 2013, under Form AO C-2, are placed in Annexure-B.
5. Subsidiaries
(I) ONGC Videsh Limited
ONGC Videsh, the wholly-owned subsidiary of your Company for E&P activities outside India, has participation in 38 projects in 17 countries viz. Vietnam (2 projects), Russia (3 projects), Sudan (2 projects), South Sudan (2 projects), Iran (1 project), Iraq (1 project), Libya (1 project), Myanmar (6 projects), Syria (2 projects), Brazil (2 projects), Colombia (7 projects), Venezuela (2 projects), Kazakhstan (1 project), Azerbaijan (2 projects), Mozambique (1 Project), Bangladesh (2 Projects) and New Zealand (1 Project). Out of 38 projects, 14 are producing, 4 are discovered/ under development, 16 are exploratory and 4 are pipeline projects.
ONGC Videsh''s share of oil and oil equivalent gas (O+OEG) production, was 12.803 MMtoe during FY''17 as compared to 8.916 MMtoe during FY''16 (43.60% higher). The oil production has increased from 5.510 MMT during FY''16 to 8.434 MMT during FY''17 (53.1% higher) and the gas production increased from 3.406 BCM during FY''16 to 4.369 BCM during FY''17 (28.3% higher).
During FY''17, the Company has earned net profit after tax of Rs.6,974 Million as compared to a net loss of Rs.36,401 Million during FY''16. The increase in profit is mainly on account of higher production, higher crude oil prices and lower impairment provisions.
(a) Significant Acquisitions, Alliances and Operational highlights of ONGC Videsh during FY''17:
ONGC Videsh successfully completed acquisition of 15% interest in Vankor Field located in East Siberia of the Russian Federation on 31st May, 2016 from Rosneft Oil Company and subsequently acquired additional 11% interest on 28th October, 2016. Vankor is Russia''s second largest field by production and accounts for about 4% of Russian crude oil production. The daily oil production from the field is around 400,000 bopd on an average and ONGC Videsh''s share considering both the acquisitions is about 104,000 bopd.
Financing arrangements for above Acquisition:
- ONGC Videsh Vankorneft Pte. Ltd., a step down wholly owned subsidiary of ONGC Videsh raised USD 1 billion comprising of USD 400 million Senior Unsecured Notes due 2022 and USD 600 million Senior Unsecured Notes due 2026 in the international capital markets in July 2016. The bond issuance was made at competitive rates and was well received by the investors. The deal was awarded the ?Best Corporate Bond? deal from India at The Asset Triple A Country Awards 2016.
- ONGC Videsh Vankorneft Pte. Ltd also raised finances by way of bridge loan to acquire 11% interest in JSC Vankorneft in October 2016. The bridge loans were replaced in April 2017 for which the company tied up facilities of USD 500 million and JPY 38 billion syndicated for longer tenor at competitive prices from International commercial banks.
(b) During FY''17, ONGC Videsh signed the following Memorandum of Understanding (MoUs):
i. MoU with SOCAR Trading SA: ONGC Videsh and SOCAR Trading SA signed an MoU on 27th May, 2016 for co-operation in identified areas such as co-operation in joint marketing of Azeri crude, other mutually agreed crude oil/gas etc.
ii. MoU with Dana Energy: ONGC Videsh and Dana Energy have entered into an MoU on 18th August 2016 for development of possible projects in Iran.
iii. MoU with Roseneft: ONGC Videsh and Rosneft, Russia signed an Agreement on 15th October 2016 for mutual cooperation in the area of education and training.
iv. MoU with Ecopetrol: ONGC Videsh and Ecopetrol entered into an MoU on 8th March 2017 as a way-forward for realizing the common intention of relinquishing Block RC-10 and transfer of pending Minimum financial commitments of Block RC-10 to new block(s).
v. MoU with Mubadala: ONGC Videsh and Mubadala Petroleum signed an MoU on 6th February, 2017 for future collaboration in upstream oil and gas exploration, development and production projects in third countries.
vi. MoU with Gazprom Neft PJSC: ONGC Videsh and Gazprom Neft signed an MoU on 29th March, 2017 for cooperation for geological survey, exploration, appraisal, development and production of hydrocarbons on the continental shelf of the Russian Federation and third countries.
(c) Operations
i. Syria: The ongoing geo-political situation in Syria including EU sanctions and the resulting restrictions on contractors continue to adversely affecting Syrian operations since December 2011.
ii. South Sudan: The operations in South Sudan projects are temporarily under shutdown due to internal conflicts and adverse security situation in the country since December, 2013.
iii. Venezuela: As a part of remediation plan in San Cristobal project, water injection (45 KBPD) facilities for phase-I are near finalization which will arrest decline in production.
iv. PetroCarabobo: The crude sale and purchase agreement (SPA) was signed between President PCB & PPSA in Nov 2016. After construction of pipelines, the changeover of diluent from Naptha to Mesa-30 has been affected since 11th March 2017 and the JV is producing Merey-16 to result in better value realization of extra heavy crude (XHO) being produced.
v. Sakhalin-I, Russia: A new onland rig ?Krechet? for Odoptu field has been commissioned in early 2017 for stage 2 development of the Odoptu field with a drilling plan of 32 wells.
Drilling of world''s longest ERD well (O5-RD) in Chayvo field with measured length of 15000m is in progress. The well was spudded on 6th March 2017. Earlier world record of longest well of 13,500m is also held by Sakhalin-I project.
Direct Subsidiaries and Joint Ventures of ONGC Videsh:
1. ONGC Nile Ganga B.V. (ONGBV): ONGBV a subsidiary of ONGC Videsh, is engaged in E&P activities directly or through its subsidiaries/Jvs in Sudan, South Sudan, Syria, Venezuela, Brazil and Myanmar. ONGBV holds 25% Participating Interest (PI) in Greater Nile Oil Project (GNOP), Sudan with its share of oil production of about 0.481 MMT during FY''17. ONGBV also holds 25% PI in Greater Pioneer Operating Company (GPOC), South Sudan. Due to adverse geo-political conditions, ONGC Videsh could not produce in GPOC, South Sudan during FY''17.
ONGBV holds 16.66% to 18.75% PI in four Production Sharing Contracts in Al Furat Project (AFPC), Syria. Due to force majeure conditions in Syria, there was no production in AFPC project during FY''17. ONGBV holds 40% PI in San Cristobal Project in Venezuela through its wholly owned subsidiary ONGC Nile Ganga (San Cristobal) BV with its share of oil & oil equivalent gas production of about 0.475 MMTOE during FY''17. ONGBV holds 27% PI in BC-10 Project in Brazil through its wholly owned subsidiary ONGC Campos Ltd. with its share of oil and oil equivalent gas production of about 0.643 MMTOE during FY''17. It also holds 25% PI in Block BM-SEAL-4 located in deep-water offshore, Brazil through its wholly owned subsidiary ONGC Campos Ltd. ONGBV also holds 8.347% PI in South East Asia Gas Pipeline Co. Ltd., (SEAGP) for onshore Pipeline project, Myanmar through its wholly owned subsidiary ONGC Caspian E&P B.V.San Cristobal Project: Consequent to the signing of agreements on Pending Payments and Financing of San Cristobal project for remediation plan between PdVSA and ONGC Nile Ganga (San Cristobal) BV on 4th November 2016, PdVSA has paid USD 19.75 million till March 2017 to liquidate partly the outstanding dividend due from the JV Petrolera IndoVenezolana S.A.(PIVSA)
2. ONGC Narmada Limited (ONL): ONL has been retained for acquisition of future E&P projects in Nigeria.
3. ONGC Amazon Alaknanda Limited (OAAL): OAAL, a wholly-owned subsidiary of ONGC Videsh, holds stake in E&P projects in Colombia, through Mansarovar Energy Colombia Limited (MECL), a 50:50 joint venture company with Sinopec ofChina. During FY''17, ONGC Videsh''s share of oil and oil equivalent gas production in MECL was about 0.555 MMTOE.
4. Imperial Energy Limited (IEL): IEL, a wholly-owned subsidiary of ONGC Videsh incorporated in Cyprus, has its main activities in the Tomsk region of Western Siberia, Russia. During FY''17, Imperial Energy''s oil and oil equivalent gas production was about 0.298 MMTOE.
5. Carabobo One AB: Carabobo One AB, a subsidiary of ONGC Videsh incorporated in Sweden, indirectly holds 11% PI in Carabobo-1 Project, Venezuela. During FY''17, ONGC Videsh''s share of oil and oil equivalent gas production was about 0.151 MMTOE.
6. ONGC BTC Limited: ONGC BTC Limited holds 2.36% interest in the Baku-Tbilisi-Ceyhan Pipeline (?BTC?) which owns and operates 1,768 km oil pipeline running through Azerbaijan, Georgia and Turkey. The pipeline mainly carry crude from the ACG fields from Azerbaijan to the Mediterranean Sea.
7. Beas Rovuma Energy Mozambique Limited (BREML): BREML was incorporated in British Virgin Islands (BVI) and holds 6% PI in Rovuma Area 1, Mozambique.
8. ONGC Videsh Atlantic Inc. (OVAI): ONGC Videsh setup a Geological and Geophysical (G&G) Centre at Houston, USA through its wholly owned subsidiary ONGC Videsh Atlantic Inc. The Centre caters to requirement of G&G studies for potential new acquisitions ofONGC Videsh including G&G studies of its existing portfolio of projects.
9. ONGC Videsh Rovuma Limited: ONGC Videsh Rovuma Limited a wholly owned subsidiary of ONGC Videsh was incorporated in Mauritius for re-structuring of 10% PI in Rovuma Area 1, Mozambique.
10. ONGC Videsh Singapore Pte. Ltd.: The Company was incorporated on 18th April, 2016 in Singapore for acquisition of shares in Vankorneft, Russia, through its subsidiary ONGC Videsh Vankorneft Pte Limited. OVVL holds 26% shares in Vankorneft, Russia and its share of production during FY''17 was 4.545 MMTOE.
11. ONGC Mittal Energy Limited (OMEL):
ONGC Videsh along with Mittal Investments Sarl (MIS) promoted OMEL, a joint venture company incorporated in Cyprus. ONGC Videsh and MIS together hold 98% equity shares of OMEL in the ratio of 49.98 : 48.02 remaining 2% shares are held by SBI Capital Markets Ltd. OMEL also holds 1.20% of the issued share capital of ONGBV by way of Class-C shares issued by ONGBV exclusively for Syrian Assets and is being financed by Class-C Preference Shares issued by ONGBV.
(II)Mangalore Refinery and Petrochemicals Limited (MRPL)
Your Company continues to hold 71.62 per cent equity stake in MRPL, a Schedule ''A'' Mini Ratna and listed entity, which is a single location 15 MMTPA Refinery on the West coast.
Performance Highlights FY''17
MRPL achieved the highest-ever throughput of 16.27 MMT in FY 2016-17 against 15.69 MMT in FY 2015-16.
Marketing & Retail Operations
MRPL continues to expand its market spread in the direct sales segment of petroleum products in Karnataka and its adjoining states. MRPL has significant market share and direct customer relations for products such as Bitumen, Fuel Oil, Sulphur, Diesel, Naphtha, Petcoke and Mixed Xylene in its refinery zone. The total sales volume of direct marketing products including polypropylene during FY 2016-17 was 1858 TMT. MRPL has penetrated the polypropylene market with additional grades and has achieved sales volume of 264 TMT during FY 2016-17. The Company has in a remarkably short term achieved a leadership position in south India for few large volume polymer grades.
Future projects of MRPL
The Company has taken up the enhancement of the Refinery capacity to 18/25 MMTPA with low cost revamp. Land allocation of1050 acres has been made by the Government of Karnataka. Necessary steps are being taken to ensure compliance with BS- VI fuel quality standards by the year 2020.
Acquisition of controlling stake in OMPL
Subsequent to OMPL having become a subsidiary of MRPL and a Government company under Companies Act, 2013, the process of merger/ amalgamation of OMPL into and with MRPL is under process.
ONGC Mangalore Petrochemicals Limited (OMPL)
OMPL has been promoted by your Company, which has set up Aromatic Complex with an annual capacity 914 KTPA of Para-xylene and 283 KPTA of Benzene in Mangalore Special Economic Zone (MSEZ) as value chain integration project of your Company. After the successful commissioning of OMPL, MRPL has increased its equity from 3% to 51.002% in Feb, 2015 with balance 48.998% held by your Company and thus OMPL has became a subsidiary of MRPL.
The total project cost is about Rs.69,110 million. OMPL commenced commercial operation from 1st October, 2014. OMPL is presently operating at 95% capacity utilization. During FY''17 OMPL achieved highest revenue of Rs.52,565 Million with highest exports of Rs.37,412 million, establishing a niche presence in the international market.
6. Annual Report of Subsidiaries and Consolidated Financial Statement
The Consolidated Financial Statement for the year ended 31st March, 2017 of your Company have been prepared in accordance with section 134 of the Companies Act, 2013, Ind AS 110 ?Consolidated Financial Statements? and Ind AS 28 ?Investments in Associates and Joint Ventures?. The audited Consolidated Financial Statements for the year ended 31st March, 2017 form part of the Annual Report.
Full Annual Report of subsidiaries of the Company will be made available to any shareholder upon request, which is also available on Company''s website. Further, Annual Reports of MRPL and ONGC Videsh are also available on website www.mrpl.co.in and www.ongcvidesh . com respectively.
7. Joint Ventures/ Associates 1-1
(a) ONGC Petro additions Limited
ONGC Petro-additions Limited (OPaL) is promoted by your Company as a Joint Venture ( JV) Company, with envisaged equity stake of 26% along with GAIL (8.85%). GSPC also has a token presence in OPaL. The balance equity would be tied up with Strategic Partners/FIs or through Public offer. OPaL is a mega petrochemical project at Dahej SEZ for utilizing in-house production of C2-C3 and Naphtha from various units of ONGC. Hon''able Prime Minister of India dedicated OPaL to the nation on 7th March, 2017. Total project cost of OPaL is Rs.270,110 million. OPaL successfully raised Rs.72,860 million through Compulsorily Convertible Debenture at competitive interest rates. With this the entire equity of Rs.112,300 million has been tied up. All units of OPaL were commissioned during Dec''16 to Feb''17. The products of OPaL - Polypropylene, HDPE and LLDPE are well accepted by the market.
(b) ONGC Tripura Power Company Limited (OTPC)
OTPC is promoted by your Company with an equity stake of 50% along with Govt. of Tripura (0.5%) and IL&FS Energy Development Co. Ltd. (IEDCL - an IL&FS subsidiary) (26%); the balance 23.5% has been tied up with India Infrastructure Fund - II acting through IDFC alternatives Limited.
OTPC has set up a 726.6 MW (2 X 363.3 MW) gas based Combined Cycle Power Plant at Palatana, Tripura at a project cost of Rs.40,470 million. The basic objective of the project is to monetize idle gas assets of your Company in land-locked Tripura state and to boost exploratory efforts in the region.
Power evacuation for both the units is done through 663 KM long 400 KV double circuit transmission network by the North-East Transmission Company Limited (NETC), a joint venture of Power Grid Corporation, OTPC and Governments of the North-Eastern states.
OTPC''s both power units of 363.3 MW each are fully operational since 4thJan, 2014 and 24th March, 2015 respectively.
Plant achieved highest generation of 747 MW (103%) on 15th February 2017. It generated record 4170 million units of power during FY''17. The plant meets 35% power requirement of North Eastern states. It became the first Dividend paying standalone gas based power generation company in India. It also obtained CERC certification.
(c) Dahej SEZ Limited (DSL)
Your Company, as a Lead Promoter has developed a multi-product SEZ at Dahej in coastal Gujarat to set up C2-C3 Extraction Plant as a value-chain integration project - OPaL through JV route in this SEZ Area. Your Company has 50% equity in the project with GIDC having the rest 50%.
Present Status:
SEZ is already operational with total 43 units are in production and units in SEZ have clocked export of Rs.6,750 million in FY''17 against Rs.27,480 million in FY''16. Total investment is to the tune of Rs.390,000 million with employment of around 12000 people.
(d) Mangalore SEZ Limited (MSEZL)
Your Company has set up MSEZ to serve as site for development of necessary infrastructure to facilitate and locate ONGC/MRPL''s Aromatic complex. Your Company has an equity stake of 26% in MSEZ and other equity shareholders are KIADB (23%), IL&FS (50%), OMPL (0.96%) and KCCI (0.04%). SEZ is operational since 1st April, 2015.
(e) Petronet MHB Limited
PMHBL is a JV company where in your Company has an equity stake of 32.72%, HPCL (32.72%) and balance 34.56 % of equity being held by leading banks. PMHBL owns and operates a multiproduct pipeline to transport MRPL''s products to the hinterland of Karnataka. In FY''17 PMHBL pipeline has achieved a throughput of3.429 MMT against total throughput of 3.318 MMT last year.
As per audited result for FY''17, the turnover & PAT of PMHBL are Rs.1,283 million and Rs.810 million, respectively.
(f) ONGC TERI Biotech Limited
ONGC TERI Biotech Limited (OTBL) which was incorporated on 26th March, 2007 is a Joint-venture Company of your Company in association with The Energy Research Institute (TERI), with shareholding of 49.98% and 48.02%, respectively. Remaining 2% shareholding is held by individuals. Through the efforts of joint research of your Company along with TERI over the years, OTBL is offering technologies and providing various Biotechnical Solutions to Oil and Gas Industry, both in India and abroad. These technologies include:
Oil zapper Technology (Bioremediation) Used to eliminate & tackle oil spills, oily sludge, and hazardous hydrocarbon waste; Paraffin Degrading Bacteria (PDB) - used to prevent Paraffin Deposition in Oilwell Tubing
Wax Deposition Prevention (WDP) - Used to prevent Paraffin Deposition in surface and subsurface flow lines
Microbial Enhanced Oil Recovery (MeOR) - Used for Enhanced Oil Recovery by mobilizing crude oil trapped in pores of Oil Reservoirs
(g) Petronet LNG Limited (PLL)
Your Company has 12.5 per cent equity stake in PLL, with the same proportion of stakes (12.5% each) held by other Oil PSU co-promoters viz., IOCL, GAIL and BPCL. Dahej LNG Terminal was further expanded from 10 MMTPA to 15 MMTPA in October 2016 and the same is further being expanded to 17.50 MMTPA.
A new LNG terminal of capacity 5 MMTPA has been set up at Kochi.
PLL is also planning to set up an LNG terminal of capacity 5 MMTPA at Gangavaram, Andhra Pradesh. The turnover of PLL during FY''17 is Rs.2,46,160 million and PAT was Rs.17,231 million
(h) Pawan Hans Limited (PHL)
Your Company has 49 per cent equity stake in PHL (previously known as Pawan Hans Helicopters Limited). Balance 51 per cent equity is held by the Government of India. PHL is one ofAsia''s largest helicopter operators having a well-balanced operational fleet of 46 helicopters. It provides helicopter support for ONGC''s offshore operations.
The GoI acting through the Department of Investment & Public Asset Management (?DIPAM?) proposes to disinvest its entire equity shareholding in PHL by way of strategic sale to prospective investor(s) along with transfer of management control. GoI has appointed SBICAP as its advisor to advise and manage the Strategic Sale of PHL (?Transaction?). Meanwhile, the GoI proposed to convert its loan into equity capital by way of right issue. PHL has offered proportionate number of shares at face value to the Company. Accordingly, your Company has decided to invest a sum of Rs.1528.16 million to maintain the present equity shareholding level at 49%.
8. Other Business Initiatives, Important MoUs/Agreement
(a) Re-assessment of Hydrocarbon Resources, KDMIPE, Dehradun
Your Company is carrying out the project on Re-assessment of hydrocarbon resources of sedimentary basins and deep water areas of India, in association with Oil India Ltd. (OIL) and DGH. For this purpose 2 methodologies are being adopted, namely, Petroleum System Modelling-for basins with adequate geological information and data availability (11 basins) and Areal Yield-for basins with relatively poor data availability (15 basins). The project is to be completed by November, 2017. The project is being periodically reviewed by National and International Experts to ensure that the workflow for the project and quality of the deliverables are conforming the best industry practices and international standards.
Presently the project is being carried out by identified teams at designated workcentres of the Company. As on 31.03.2017, the geological model for Satpura-South Rewa-Damodar, Bastar, Chattishgarh, Karewa, Vindhyan, Mahanadi, Rajasthan, Spiti-Zanskar, Mumbai Offshore and Pranhita-Godavari basins have been prepared and resource assessment and estimation of YTF will be carried out in association with international experts. The studies for twelve sedimentary basins (Cambay, KG, Cauvery, Bengal-Purnea, Andaman-Nicobar, Kutch-Saurashtra, Assam Shelf, Assam-Arakan fold Belt, Kerala-Konkan, Himalayan Fold Belt, Bhima-Kalagdi and Ganga-Punjab Plains) is in progress at designated work centres of the Company
(b) National Seismic Programme: Acquisition, Processing & Interpretation of Un-appraised Areas
Mo PNG has assigned your Company the responsibility of Acquisition, Processing & Interpretation (API) of 40835 LKM of 2D seismic data in Unappraised areas of Indian sedimentary basins falling in 24 onland areas (grouped in 11 sectors) except North east, situated in 18 States/Union Territory under ?National Seismic Project (NSP)?. The basic objective of the seismic survey is to map and study Tertiary/ Mesozoic/Proterozoic sediments for hydrocarbon prospectivity and assessment of their potential. This would enable Government to assess hydrocarbon prospectivity of the areas for carving out and offering exploration blocks in future bidding rounds as per the GoI policies. Under this project, 2D seismic data acquisition work has started in Saurashtra area on 12.09.2016 and in Rajasthan, Mahanadi, Deccan Synclise, Bhima, Kaladgi, Vindhyana and Himalayan Foreland areas in October, 2016. As on 31.03.2017, 5033 LKM of 2D data has been acquired and further acquisition is in progress.
(c) Agreement between ONGC and OPaL
Your Company and OPaL (ONGC Petro Additions Ltd) signed an agreement on 22.04.2016 for supply of Naphtha through Marine Route.
(d) Crude Oil Sale Agreement (COSA)
i. Nominated Fields: Negotiations are in progress for the new COSA with the PSU Refiners. The existing COSA was valid till 31.03.2015 and has been extended till 31.03.2018.
ii. NELP Fields: Regarding crude supply from NELP fields in Gujarat to IOCL, the JV COSA for NELP fields (Karannagar, Vadatal, Nadiad & W Patan) under the Company''s operatorship is under negotiation with IOC.
Similarly for NELP fields in Karaikal Asset (Madanam & Nagayalanka), the process has been initiated to put COSA in place with CPCL and MRPL.
(e) Regasification Agreement between ONGC and SLPL for LNG:
A definitive regasification agreement was executed on 23.06.2016 for booking of1.0 MMTPA regasification capacity for a period of 20 years in 5.0 MMTPA Floating Storage and Regasification Unit (FSRU) Terminal at Jafrabad Port, Gujarat, being set up by Swan Energy Ltd. (SEL) through a Special Purpose Vehicle (SPV), Swan LNG Pvt. Ltd. (SLPL).
(f) Agreement of Collaboration (AOC) with National Mining Research Center-Skochinsky Institute ofMining (NMRC-SIM):
Your Company signed an Agreement of Collaboration (AOC) with National Mining Research Center-Skochinsky Institute of Mining (NMRC-SIM), Russia on 25th November 2004 for Underground Coal Gasification (UCG). Under this AOC, NMRC-SIM provided consultancy to your Company for carrying out suitability studies for some coal / lignite blocks in India. Award of mining lease for the said Vastan lignite block by Mo C, GoI is still awaited. The AO C with SIM expired on 24th November, 2014 and has been extended for another five years upto March 4, 2020.
(g) Industry Affiliates programme (IAP) Agreement on Chemical EOR was signed on 10.03.2015 between IRS and University of Texas, Austin, Texas, USA and it is valid for five years.
(h) MoC between ONGC PAN IIT:
Your Company has entered into a Memorandum of Collaboration (MoC) with PanIIT in January 19, 2015 at New Delhi to work towards a collective R&D Programme for developing indigenous technologies to enhance exploration and exploitation of hydrocarbons and alternate sources of energy. Pan IIT is a consortium of seven premier Indian Institutes of Technology namely, IIT-Kharagpur, IIT-Kanpur, IIT-Madras, IIT-Mumbai, IIT-Delhi, IIT-Guwahati and IIT-Roorkee. This is long-term initiative for sustained research, development and capacity building. Under this program a total of 15 projects have been taken up in Phase-I and for Phase-II, 12 projects approved by the Program Advisory Committee. Further, for Phase-III, a total of 55 project proposals have been received from various IITs and the same have been under review by ONGC Institutes.
(i) MoU with Geological Survey of India:
Your Company and GSI Training Institute (GSITI), Hyderabad entered into a Memorandum of Understanding which aimed at providing exposure and advanced field geological training to young ONGC geoscientists at GSI Field Training Centers (FTCs) at Kuju (Jharkhand) and Aizawl (Mizoram). As per the MoU, the first batch of15 young geoscientists from all the Company underwent training in Field Geology at the GSI Training Institute''s Field Training Centers (FTCs) in Kuzu (Jharkhand) and Aizawl (Mizoram) from 8th to 31st March, 2017.
(j) Farm-in/Farm-out Agreement with Gujarat State Petroleum Corporation Limited (GSPC) in respect of NELP Block KG-OSN-2001/3:
Your Company has acquired 80% stake in the block KG-OSN-2001/3 falling in KG Offshore along with Participating Interest (PI) and Operatorship at a purchase consideration of US$ 995.26 million for DDW Field in the Block. The Farm-in/Farm-out Agreement was executed between your Company and GSPC on 10.03.2017. The Farm-in/Farm-out Agreement envisages: the said acquisition is subject to satisfaction of a set of conditions precedent, including mandatory Government approval.
9. Information Technology
- Your Company has taken up the ambitious challenge of going Paperless. The Project has been awarded on 29th Dec 2016 and is aimed at making more than 3000 paper-based processes paperless. This initiative will be one of the Company''s contribution towards our Prime Minister''s initiative of Digital India. The Project is scheduled to be rolled-out in Mumbai by May 2017 and organisation-wide by June 2018.
- Microwave Offshore-Onshore Project was been completed successfully. Under this project, terrestrial links were established which connect the Company''s Bandra and Uran Offices with Neelam - B-193 - BPB -BPA and Heera platforms in Mumbai Offshore situated more than 100 kms away into the sea. This high-capacity backbone Microwave link is capable of carrying multi-service traffic with high spectral efficiency and providing carrier grade service. This technology driven project has gone through many challenges while constructing a 125 m Tower on Dronagiri hills off Mumbai with effective height of 205 m above MSL. This is the longest over the sea microwave link, longest offshore hop of the length of 65 kms in the region having total offshore path length of 138 kms. Link uses Radios supporting higher-order modulation of 1024 QAM with XPIC technology for higher throughput of upto 450 Mbps and reduced latency. This project will meet full gamut of IT and telecommunication needs (including Video Conferencing, RTOC, Rotary equipment monitoring and CCTV) of Neelam and Heera Asset and Bassein and Satellite Assets of Offshore and will be a stepping stone for further extension to MH Asset.
Initiatives and Development in the field of Information Technology Information Security services
a) CISO office is taking due initiative in ensuring information security measures across your Company. In this direction, additionally 11 Infocom Data Centres (Karaikal, Rajahmundry, Kolkata, Dehradun, Vadodara, Hazira, Jorhat, Nazira, Agartala, Mehsana and Ankleshwar) and 4 G&G Data Centres (Panvel-SPIC, VRC, EPINET and GEODEC) were taken up for ISMS implementation through in-house resources. ISMS documentation of 11 Infocom Data centres have been completed and documentations of 4 Geological and Geophysics (G&G) Data Centres are in progress.
b) For the first time, IS awareness session was conducted for GTs during their MultiDisciplinary Training (MDT) at Dehradun.
EACS Project:
A state-of-the-art Enterprise wide Access Control and Surveillance (EACS) system project has been conceptualized to mitigate any threat perception to the security of the oil installations as well as offices of your Company. For the implementation of the state-of-the-a

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

  • Download our Mobile App
  • Available on Google Play
  • Available on App Store
  • RSS