Pages

Sunday, 4 March 2012

New Sell Off Strategy at Stake with newly approved auction method! New Delhi is set to raise at least $2.5 billion by selling a 5 percent stake in Oil and Natural Gas Corp (ONGC) on March 1. The long-delayed ONGC sale, set to be the biggest equity of



New Sell Off Strategy at Stake with newly approved auction method! New Delhi is set to raise at least $2.5 billion by selling a 5 percent stake in Oil and Natural Gas Corp (ONGC) on March 1. The long-delayed ONGC sale, set to be the biggest equity offering in India this year, will be done via an auction on the stock exchange, the first to use this newly approved sales method.

Finance minister Pranab Mukherjee today termed the third quarter GDP number of 6.1 per cent as "disappointing" but expressed the hope that economy will register a growth of 7 per cent for the entire fiscal.


The market started strong today, but closed on a tepid note below 5400.Shares of public sector companies traded with strong gains Wednesday after the government approved the long-delayed ONGC stake sale yesterday.


Troubled Galaxy Destroyed Dreams, chapter 750

Palash Biswas




New Sell Off Strategy at Stake with newly approved auction method! New Delhi is set to raise at least $2.5 billion by selling a 5 percent stake in Oil and Natural Gas Corp (ONGC) on March 1. The long-delayed ONGC sale, set to be the biggest equity offering in India this year, will be done via an auction on the stock exchange, the first to use this newly approved sales method.The government approved the auction at a minimum price of 290 rupees a share, which is 2.3 percent higher than yesterday's close. Finance Minister Pranab Mukherjee is seeking to raise funds as he struggles to meet a budget deficit target of 4.6 percent of gross domestic product after slowing economic growth lowered revenue receipts.

"We should see a good response. We expect foreign investors, large domestic mutual funds and insurance companies to participate," said Sidhartha Pradhan, additional secretary at the government's Department of Disinvestment (DoD).

The auction of five per cent of government's stake in the oil major will take place between 9.15 am and 3.30 pm tomorrow on the BSE and the National Stock Exchange.

A panel of ministers approved the sale yesterday, Reddy said. The state owns 74 percent of the explorer.The Government of India is at last proceeding with its divestment of 427.8m shares in Oil and Natural Gas Corp to raise at least Rs124bn (US$2.5bn), following the recent revival in India's equity market.

It is using a new mechanism called an offer for sale, in which bids above a minimum floor price will be invited during a one-day offer, which will take place on March 1. The mechanism can be used by any of the top 100 Indian listed companies by market capitalisation and will reduce the time taken in follow-on offerings, which is usually three days. Anyone can submit a bid, including institutions and retail investors.


A 25 percent slump in the Sensex index in 2011 undermined efforts to sell shares of state-owned companies, with the government meeting 3 percent of its 400 billion-rupee target for the year ending March 31.

India is set to raise at least $2.5 billion selling a 5 percent stake in Oil and Natural Gas Corp (ONGC) (ONGC.NS), aiming to patch up its widening fiscal deficit and revive its stalled privatization agenda.

The long-delayed ONGC sale, set to rank among India's five biggest equity offerings and the largest this year, will be done via an auction on the stock exchange, a test case for this newly approved method which avoids expensive roadshows and saves time.

Shares in ONGC, the country's largest oil and gas producer and second-largest listed firm in India by market value, rose more than 5 percent on Wednesday, outpacing the wider market, amid expectations that the offer would meet strong demand.


The market started strong today, but closed on a tepid note below 5400.Shares of public sector companies traded with strong gains Wednesday after the government approved the long-delayed ONGC stake sale yesterday.

It wasn't a volatile session and it was up in the morning, but it probably sulked a little bit towards afternoon post the weak GDP numbers or going into the LTRO news post market closing.

In any case, the index had rallied about 150 points in two days till the high point of the day from sub 5300 to 5450, and then it began to come off. In the second half of the day, it dipped into the red for a bit, but managed to close flat. In truth, it was ONGC and Reliance, the two big oil stocks that bailed the index out today. ONGC, after the base price announcement which was higher than market expectations, closed smart and Reliance did well too.

Mumbai: Industry lobby Assocham Tuesday urged Finance Minister Pranab Mukherjee to reduce government expenditure and raise revenues to narrow the widening fiscal deficit.

"The government should have enough political courage to align domestic fuel prices to international prices. Otherwise subsidising oil products, especially diesel, will add to the already huge fiscal deficit and increase inflation further, wiping out even the small gains we see in the economy," said Assocham's newly-elected President Rajkumar Dhoot in a statement.

The government borrowings could inflate the fiscal deficit this year to reach six percent, much above the targeted 4.6 percent, he said, adding market pricing of oil products will lead to reduction of Rs one lakh crore in the oil subsidy bill.

Another Rs 1 lakh crore could be saved if the entire range of import duties is reconsidered to examine where duty structure is hurting the manufacturers from cheaper imports of finished goods.

"The government should aim at a fiscal deficit ranging around 3.5 percent of GDP by widening the tax net, early implementation of direct tax code (DTC), speeding up divestment and stimulating foreign direct investments in key sectors like retail, aviation, defence, pensions, insurance and mining," he said.

The Reserve Bank has indicated that in the absence of credible fiscal consolidation, it will not be able to reduce interest rates to promote growth, so fiscal consolidation is at the crux of the next Budget, Dhoot said.

He further recommended privatisation of certain rail corridors. "Path breaking reforms are needed to accelerate the economy which can grow at nine percent despite tough economic conditions worldwide and poor infrastructure in the country," Dhoot said.

Assocham also stressed on the importance food security, job security and medical security to attain double-digit growth rate.

The industry chamber said the trillion dollar investment plan for infrastructure development during 12th Plan should be aggressive and focused on fund raising. He said divestment can be given a push with a target of Rs 70,000 crore for the next fiscal.


The government in November scrapped a proposal to sell a 5 percent stake in New Delhi-based ONGC in a public offering. Plans for sales in other state companies including Bharat Heavy Electricals Ltd. (BHEL), Steel Authority of India Ltd. and Hindustan Copper Ltd. (HCP) have also been delayed.

Mukherjee said Jan. 11 that it will be "difficult" for the government to achieve its deficit target. Revenue collection reached 63.3 percent of the annual goal in the nine months to December, compared with 73.2 percent in the same period a year ago, according to the Controller General of Accounts.

The Securities and Exchange Board of India, the market regulator, announced the rules for sale of shares through auctions to institutional investors on Feb. 1. The National Stock Exchange of India said a mock bidding session would be held in preparation for the ONGC share auction.
Trade unions oppose the government's plan to sell stakes in state companies, saying it will lead to job losses. Banks closed and bus services were canceled yesterday as millions of Indian government employees joined a nationwide strike to protest asset sales and the cost of living.


Oil & Natural Gas Corp. (ONGC), India's biggest energy exploration company, climbed to a nine-month high after the government approved a plan to raise 124 billion rupees ($2.5 billion) by selling shares at a premium.

ONGC rose 3.5 percent to 293.20 rupees, the highest level since May 16. The stock has climbed 14 percent this year compared with a 15 percent gain in the key Sensitive Index. (SENSEX)


Finance minister Pranab Mukherjee today termed the third quarter GDP number of 6.1 per cent as "disappointing" but expressed the hope that economy will register a growth of 7 per cent for the entire fiscal.

"No doubt, it is disappointing 6.1 per cent ... but not unexpected," he said.

"But as you know that the CSO has given the full advance estimates that is around 6.9 per cent, we also expect it around 6.9 or 7 per cent," he said.

Impacted by high interest rates and global demand slowdown, Indian economy grew at 6.1 per cent, the slowest in over two years, prompting corporates and experts to press for faster reforms to boost industrial output.

The economic growth rate in October-December 2011 declined mainly due to poor performance of manufacturing, mining and farm sectors. The economy had expanded by 8.3 per cent during the corresponding quarter a year ago.

The falling growth rate may prompt the Reserve Bank to cut rates at its mid-quarterly policy review on March 15. The finance minister too is expected to announce steps to arrest contraction in growth in the budget for 2012-13, to be presented in the Lok Sabha on March 16.

According to the data released by Central Statistical Organisation (CSO), growth of the manufacturing sector during the quarter decelerated sharply to 0.4 per cent from 7.8 per cent during the same period a year ago. Farm sector output registered a growth 2.7 per cent, down from 11 per cent in Q3 of the last fiscal.

"If, I take first quarter, second quarter, third quarter taken together, it is also indicating a downward trend," he said.

A sharp fall off in India's economic growth to 6.1 per cent in the quarter to the end of December, the slowest in three years, has triggered fears of a prolonged decline unless emergency steps are taken this month.

The government plans to raise $2.5 billion by selling a 5 percent stake in Oil and Natural Gas Corp (ONGC). If the sale, the first to use a newly approved auction method, is a success it could help revive Delhi's much-needed privatisation programme. Questions remain about retail participation and whether New Delhi is genuinely convinced by the merits of state sell-offs. But the disposal of shares in the state-controlled oil and gas company by auction is a new departure that promises to be effective and efficient.

In part, the ONGC sale reflects the government's desperate need to raise cash before the budget, due on March 16. It is also a sign that equity market conditions, despite a slowing economy, are good enough to merit a sale of the family silver. The government pulled out of a planned public offer in September last year amid weak equity markets.

The auction is likely to attract institutions which are hungry for investment opportunities. True, a fixed-price offering might have been pitched at a discount, but the more market-sensitive auction method of price discovery should increase confidence in the valuation. Using this method, the deal can also be done quickly. And if the government can take advantage of market opportunities as they arise, there is greater hope that the state will further loosen its grip on key assets.

Retail participation is another bone of contention. Individual investors will find it harder to get involved in an auction. That's a shame, since one of the primary objectives of India's disinvestment programme was to deepen and broaden the capital market by bring in more retail investors.

India has never quite embraced the idea of privatisation, preferring to call it disinvestment. Last year's budget set a $9 billion target for disinvestment by the end of March and so far only $250 million has been raised. New Delhi has also vowed to keep government stakes in any state-controlled firms above 50 percent. Yet real benefits come courtesy of the productivity gains that tend to follow increased private ownership. The auction tack is only one part of the equation. But it is one that bodes well for Indian privatisations.

Shares of oil major ONGC on Wednesday settled with over 3 per cent gains on the bourses, ahead of the company's five per cent equity sale to institutional investors through an auction tomorrow.

After opening on a bullish note, ONGC shares today gained as much as five per cent in the intra-day trade to touch a high of Rs 298.40. After paring some gains, the stock closed for the day 3.46 per cent higher at Rs 293.35 on the BSE.

The stock ended 3.46 per cent up at Rs 293.20 at the NSE. The government yesterday decided to offload five per cent stake in ONGC through the auction route on March 1 at a floor price of Rs 290 a share. The planned sale of ONGC shares could fetch the government about Rs 12,000-13,000 crore.

The government owns 74.14 per cent stake in ONGC and has proposed to sell 427.77 million shares or 5 per cent equity. The floor price, the minimum price for the sale of shares, was over 2 per cent higher than ONGC's closing price of Rs 283.05 on NSE and Rs 283.55 on BSE on Monday.

"This was expected for quite some as the issue was lingering for a long. We had expected a discount in the floor price but, Rs 290 per share came as a surprise," Ambareesh Baliga COO Way2Wealth said.

He, further, added that the government did not want to wait for the election results and budget, so they are in a hurry to have this issue sail through.

Geojit BNP Paribas Financial Services Asst VP Gaurang Shah said, "The decision is very positive and the same was seen in the stock price movement as the markets gave a thumbs-up to the floor price (Rs 290 a share). I think the floor price was on the expected lines."

In terms of volume, 13.55 lakh shares of the company got traded on the BSE, while more than 89 lakh shares changed hands on the NSE. Meanwhile, the BSE benchmark Sensex ended the day on a flat note, up 21.56 points at 17,752.68.

The BSE is the designated exchange for the proposed share sale, but orders can be placed on both the BSE and NSE. The sale of shares would take place at a separate window of the two bourses and would commence at 9.15 am and close at 3.30 pm tomorrow. Any modification or cancellation of the orders would not be allowed in the last 30 minutes.

The shares would be allocated on the price-priority basis and no single buyer, other than mutual funds and insurance companies, would be allocated more than 25 per cent of the size of the offer.

In the event of the total number of orders received at or above the floor price being less than the number of shares being offered for sale, the government would have the right to either conclude the sale to the extent of subscription or cancel the sale.

29 FEB, 2012, 03.05PM IST, ET NOW

ONGC's fundamentals, valuations are attractive: Jal Irani, Macquarie Capital

In an interview with ET Now , Jal Irani , Director,Macquarie Capital, talks about the ONGC FPO and the company's fundamentals. Excerpts:

The floor price for ONGC share sale has been fixed at a 3% premium to Tuesday's close, which means that the auction price will be above Rs 300. Is that expensive?

I cannot comment much about the auction price, but I can certainly comment about the fundamentals of ONGC. Essentially ONGC is a company which is turning around in terms of volumes. From volumes declining by about 1-2% per annum, it has very strategically increased. Its reserve placement ratio has exceeded more than 100% in the last three or four years, which with a lag effect always results in a revival in volumes. So it is going to see a small increase in volumes versus a decline in volumes going forward.

The second thing is valuations are indeed compelling. On an EV to reserves of 6 times versus global average of about 17 and an EV to EBITDA of four times, it certainly presents some compelling valuations.

Can we expect good demand to the auction?

Let me put it this way. At current market prices, we have an outperform on the stock and essentially we think that investors would be interested at a premium.

If you suggest a price of 300 and I do not know, I would imagine that the merchant bankers would have done the due diligence before actually announcing this, so I would suspect that they have done a healthy analysis of what demand could look like.

If I compare ONGC with other global E&P companies, yes, ONGC is trading at a 50-60% discount, but is it fair to compare ONGC with other E&P players because for ONGC, the big issue is the subsidy overhang?

That is absolutely true and, therefore, besides the EV to reserve benchmark, there are other benchmarks, especially on an EV/EBITDA. Now the subsidy is stripped out of the EBITDA and that is factored into the valuation.

Also it is worth noting that ONGC has got one of the lowest finding and development costs in the world. So what it does essentially is that despite its rather low realisation because of subsidy, which are on an average maybe $50 in the recent past, its costs are also actually significantly lower.

It is thus fairly competitive. So one looks at it on a holistic basis and in fact, also a discounted cash flow, which takes into consideration all these several things not clearly on a one-year basis, but on a several year basis.

While you do believe the stock is an outperformer but at a CMP of 283, is it a buy?

Yes, indeed it is.

What are your subsidy assumptions for ONGC, because the subsidy formula now has been tweaked? Earlier it was 33%, now I understand it is at 38%?

The government themselves do not have a stated formula, but what most of the street tends to do is take the most recent quarter, which is a 38% share. So one assumes that is what is going to be carried forward.

At 38%, it factors in a pretty high subsidy share for ONGC and that I would not think is going to be materially higher from these levels essentially.

If I look at the current shareholding of ONGC, 69% of ONGC is held by government of India, about 7% is held by Indian Oil Corporation and about 3% is held by LIC. So the free float for ONGC in the open market is limited. Now that 5% of more paper will be available soon, do you think this in a sense eventually will act as a cap because more shares means more options for sellers?

Just a minor correction. Post the 5% divestment, the government holding will go down to 69%. At the moment, if I am not mistaken, it is 74%. At the moment, essentially a 5% float is going to arguably satisfy the appetite of potential buyers, but for a stock of this size and calibre in the longer term, actually greater liquidity is good. So there is always demand as long as ONGC is doing the right thing.

It is in the process of turning around its volumes and that would become more noticeable as one goes forward and that would drive the stock price in the longer term.
http://economictimes.indiatimes.com/opinion/interviews/ongcs-fundamentals-valuations-are-attractive-jal-irani-macquarie-capital/articleshow/12080783.cms


Govt pushes ONGC stake sale to ride primary market revival
It does look like Sebi's decision will mainly help the government offload shares in some large public sector enterprises

Mark to Market | Mobis Philipose

Typically, when a large block of shares is to be sold, the selling shareholder is willing to settle for a discount to prevailing market prices. The government is doing exactly the opposite with the sale of 5% of its stake in Oil and Natural Gas Corp. Ltd. It said on Tuesday that it won't accept bids below Rs. 290 per share, even while the prevailing market price of ONGC shares was around Rs. 283 per share.
Investors seem to be happy to oblige. They drove ONGC shares up 3.5% to Rs. 293 on Wednesday, almost as if to justify the impeding purchase of shares at Rs. 290 or above. It would have been odd for investors to bid at prices that were higher than the prevailing market price.
But what gave the government and its investment bankers the confidence that there will be adequate demand for the shares at a premium over prevailing prices? To start with, market sentiment has improved considerably, and the response to the initial public offering (IPO) of Multi Commodity Exchange of India Limited proved that investors are willing to lap up issuances in the primary market. MCX raised Rs. 663 crore from the market, pricing its issue at the higher end of the wide price band it had set. But more importantly, it got bids worth as much as Rs. 35000 crore. This bodes well for ONGC's Rs. 12500 crore issue.
Additionally, ONGC's public float is low at around 12.5%, if one were to exclude the 3.23% stake held by Life Insurance Corporation. Investors, especially the institutional ones, should be happy to buy in the special auction window created by National Stock Exchange and BSE. And talking of float, the increase in public shareholding by 5% will lead to an increase in the stock's weightage in indices tracked by index funds. This will lead to some demand for the company's shares, even if only temporarily. The recent rise in crude prices also augurs well for the firm.
Also, valuations aren't demanding. Sanjeev Prasad, senior executive director & co-head, Kotak Institutional Equities, said in an interview to ET NOW, "The floor price is quite reasonable. If you look at Rs. 290 and if you believe 2013 EPS of say around Rs. 35 a share, you are looking at a stock which is available at about 8.3 times on 2013 earnings, and about 3.2-3.3 times on an EV/EBITDA basis. So it is quite attractively valued." Of course, one of the reasons ONGC trades at a relatively low valuation is the uncertainty surrounding its subsidy sharing agreement with the government.
One can argue about the markets regulator, Securities and Exchange Board of India's decision to allow large companies such as ONGC a special auction window to sell shares without having to go through the entire process of filing a prospectus and obtaining regulatory approvals. It does look like Sebi's decision will mainly help the government offload shares in some large public sector enterprises. While it does seem a special privilege, the positive fallout is that the government can tap the markets in quick time, which is a boon considering market sentiment can change quickly.
http://www.livemint.com/2012/02/29194953/Govt-pushes-ONGC-stake-sale-to.html

Meeting divestment target 'almost impossible'

OUR BUREAU
SHARE  ·   COMMENT   ·   PRINT   ·   T+  
Mr Mohammad Haleem Khan, Disinvestment Secretary.

RELATED

NEWS

EGoM okays 5% stake sale in ONGCAssocham wants govt to raise disinvestment targetDivestment: EGoM favours auction route for ONGC, BHELGoM meet tomorrow to consider ONGC stake saleGovt to sell stake in ONGC, BHEL to raise Rs 14,500cr in FY'12

TOPICS

public sector undertakingdisinvestment
E-GoM favours auction route for divestment
NEW DELHI, FEB. 15:
It is official now. The Centre will miss the disinvestment target of Rs 40,000 crore that was set for the current fiscal in Budget 2011-12, a top Disinvestment Department official said today.
"There is no need to speculate at this point of time as everybody knows that Rs 40,000-crore (target) is now almost impossible," Mr Mohammad Haleem Khan, Disinvestment Secretary, told reporters here.
The Centre has so far this fiscal mopped up via divestment only about Rs 1,150 crore. Choppy markets and Euro Zone sovereign debt crisis had adversely impacted foreign investor appetite for equities in 2011. But there is now some recovery going by the gush of portfolio flows coming into the equity markets last month.

AUCTION METHOD

Meanwhile, an Empowered Group of Ministers (EGoM) today decided that the auction method may be used for all those cases where the Cabinet Committee on Economic Affairs has given its nod for a follow-on-public offering. This decision will open the doors for the Centre to adopt the auction route for divestment in ONGC and other State-owned entities.
The capital market regulator SEBI had on February 1 issued detailed guidelines for the offer of sale of shares by promoters through the stock exchange mechanism.
"The EGoM has taken a decision to exercise the option to go in for new guidelines of the SEBI — both in respect of ONGC and BHEL. We have decided to go in for auctions. Both ONGC and BHEL are under consideration. As for further decisions, EGoM is going to meet shortly again. For all other decisions, the next meeting of EGoM has to be awaited," Mr Jaipal Reddy, Union Petroleum Minister, told reporters outside North Block today.
He, however, declined to comment on whether the ONGC divestment transaction would happen in the current fiscal.
Indications are that the BHEL transaction may not be put through this fiscal as the concerned administrative ministry feels that the power sector outlook is not bright right now to undertake any divestment.
For both ONGC and BHEL, the Government is looking to sell 5 per cent stake.
http://www.thehindubusinessline.com/industry-and-economy/article2897213.ece?homepage=true&ref=wl_home

Oil and Natural Gas Corporation

From Wikipedia, the free encyclopedia
*
The neutrality of this article is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (November 2011)

*
Industry
Founded
14 August 1956
Headquarters
Key people
Sudhir Vasudeva
Products
Petroleum, natural gas, and other petrochemicals
Revenue
US$ 26.94 billion (2011)[1]
* US$ 5.00 billion (2011)[1]
* US$ 43.45 billion (2011)[1]
* US$ 25.86 billion (2011)[1]
Employees
33,229 (2011)[1]
Website
*
ONGC platform at Bombay High in theArabian Sea
Oil and Natural Gas Corporation Limited (ONGC) (NSE: ONGC, BSE: 500312) is an Indian state-owned oil and gas company headquartered in New Delhi, India. It is one of the largest Asia-based oil and gas exploration and production companies, and produces around 77% of India's total crude oil production (and around 30% of total demand) and around 81% of natural gas production.[2] ONGC is one of the largest publicly traded companies by market capitalization in India[3] and the largest India-based company measured by profits.[4]
ONGC was founded on 14 August 1956 by the Indian state, which currently holds a 74.14% equity stake. It is involved in exploring for and exploiting hydrocarbons in 26 sedimentary basins of India, and owns and operates over 11,000 kilometres of pipelines in the country. In 2010, it was ranked 18th in the Platts Top 250 Global Energy Company Rankings[5] and 413th in theFortune Global 500.[4]

[edit]History

[edit]Foundation to 1961

During the pre-independence period, the Assam Oil Company in the northeastern and Attock Oil company in northwestern part of the undivided India were the only oil companies producing oil in the country, with minimal exploration input. The major part of Indian sedimentary basins was deemed to be unfit for development of oil and gas resources.
After independence, the national Government realized the importance oil and gas for rapid industrial development and its strategic role in defense. Consequently, while framing the Industrial Policy Statement of 1948, the development of petroleum industry in the country was considered to be of utmost necessity.
Until 1955, private oil companies mainly carried out exploration of hydrocarbon resources of India. In Assam, the Assam Oil Company was producing oil at Digboi (discovered in 1889) and Oil India Ltd. (a 50% joint venture between Government of India and Burmah Oil Company) was engaged in developing two newly discovered large fields Naharkatiya and Moraan in Assam. In West Bengal, the Indo-Stanvac Petroleum project (a joint venture between Government of India and Standard Vacuum Oil Company of USA) was engaged in exploration work. The vast sedimentary tract in other parts of India and adjoining offshore remained largely unexplored.
In 1955, Government of India decided to develop the oil and natural gas resources in the various regions of the country as part of the Public Sector development. With this objective, an Oil and Natural Gas Directorate was set up towards the end of 1955, as a subordinate office under the then Ministry of Natural Resources and Scientific Research. The department was constituted with a nucleus of geoscientists from the Geological survey of India.
A delegation under the leadership of Mr. K D Malviya, the-then Minister of Natural Resources, visited several European countries to study the status of oil industry in those countries and to facilitate the training of Indian professionals for exploring potential oil and gas reserves. Experts from Romania, the Soviet Union, the United States and West Germany subsequently visited India and helped the government with their expertise. Soviet experts later drew up a detailed plan for geological and geophysical surveys and drilling operations to be carried out in the 2nd Five Year Plan (1956-57 to 1960-61).
In April 1956, the Government of India adopted the Industrial Policy Resolution, which placed mineral oil industry among the schedule 'A' industries, the future development of which was to be the sole and exclusive responsibility of the state.
Soon, after the formation of the Oil and Natural Gas Directorate, it became apparent that it would not be possible for the Directorate with its limited financial and administrative powers as subordinate office of the Government, to function efficiently. So in August, 1956, the Directorate was raised to the status of a commission with enhanced powers, although it continued to be under the government. In October 1959, the Commission was converted into a statutory body by an act of the Indian Parliament, which enhanced powers of the commission further. The main functions of the Oil and Natural Gas Commission subject to the provisions of the Act, were "to plan, promote, organize and implement programmes for development of Petroleum Resources and the production and sale of petroleum and petroleum products produced by it, and to perform such other functions as the Central Government may, from time to time, assign to it ". The act further outlined the activities and steps to be taken by ONGC in fulfilling its mandate.

[edit]1961 to 2000

Since its inception, ONGC has been instrumental in transforming the country's limited upstream sector into a large viable playing field, with its activities spread throughout India and significantly in overseas territories. In the inland areas, ONGC not only found new resources in Assam but also established new oil province in Cambay basin (Gujarat), while adding new petroliferous areas in the Assam-Arakan Fold Belt and East coast basins (both inland and offshore). ONGC went offshore in early 70's and discovered a giant oil field in the form of Bombay High, now known as Mumbai High. This discovery, along with subsequent discoveries of huge oil and gas fields in Western offshore changed the oil scenario of the country. Subsequently, over 5 billion tonnes of hydrocarbons, which were present in the country, were discovered. The most important contribution of ONGC, however, is its self-reliance and development of core competence in E&P activities at a globally competitive level.
A turning point in the history of India's oil sector was in 1994. While the oil sector was on the backburner of India's political realm for some time, is was brought to the forefront by the privatization of India's leading oil E&P organization, the ONGC. Simultaneously, there were steps taken for the enhancement of production on the Bombay High oil fields as the result of a INR 150 billion development investment.
One of Asia's largest oil E&P companies, ONGC became a publicly held company as of February 1994, following the Indian government's decision to privatize. Eighty percent of ONGC assets were subsequently owned by the government, the other 20% were sold to the public. At this time, ONGC employed 48,000 people and had reserves and surpluses worth INR 104.34 billion, in addition to its intangible assets. The corporation's net worth of INR 107.77 billion was the largest of any Indian company.
After its initial privatization, ONGC had authorized capital of INR 150 billion: it also met its need to raise INR 35 billion to invest in viable oil and gas projects. The Asian Development Bank (ADB) had also set a deadline for privatizing and restructuring at 30 June 1994, if loans were to be granted for development of two ONGC projects. As a consequence of the successful privatization, the loans were granted - US$267 million for development of Gandhar Field, and US$300 million for the gas flaring reduction project in the Bombay Basin. The successfully formulated and implemented privatization strategy put ONGC at par with other large multinational and domestic oil companies.

[edit]2000 to present

In 2006 a commemorative Coin set was issued to mark the 50th anniversary of the founding of ONGC, making it only the second Indian company (alongside State Bank of India) to have such a coin issued in its honour.
In 2011, ONGC applied to purchase of 2000 acres of land at Dahanu to process offshore gas.[6]

[edit]ONGC Videsh

ONGC Videsh Limited (OVL) is the international arm of ONGC. It was rechristened on 15 June 1989. It currently has 14 oil and projects across 15 countries. Its oil and gas production reached 8.87 MMT of O+oEG in 2010, up from 0.252 MMT of O+OEG in 2002/03.

[edit]International rankings

  • ONGC has been ranked at 198 by the Forbes Magazine in their Forbes Global 2000 list for the year 2007.[7]
  • ONGC has featured in the 2008 list of Fortune Global 500 companies at position 335,[8] a climb of 34 positions from rank of 369 in 2007.
  • Economic Times 500, Business Today 500, Business Baron 500 and Business Week recognizes ONGC as most valuable Indian corporate, by Market Capitalization, Net Worth and Net Profits.[9]

[edit]References

  1. ^ | About | ONGC
  1. ^ a b c d e "2010 ONGC Form 10-K". Retrieved October 7, 2011.
  2. ^ "ONGC beats China's CNOOC to become Asia's No.1 E&P firm". SINGAPORE: The Economic Times. November 3, 2010. Retrieved 3 November 2010.
  3. ^ "ONGC one of the most valuable company in India". CNBC-TV18. 14 October 2011.
  4. ^ a b "BSE Filings". 26 July 2010.
  5. ^ Platts, Nov 2, 2010. "Platts Top 250 Global Energy Company Rankings". Retrieved 2010-11-03.
  6. ^ Lewis, Clara (11 Sep 2011). "ONGC seeks 2K acres govt land at Dahanu". Times News Network. Times of India.
  7. ^ "The Global 2000". Forbes.
  8. ^ Fortune 500
  9. ^ ONGC :: Investor Centre :: Profile

[edit]Further reading

  • Story of ONGC by I.A.Farooqi gives a historical account of Oil and Natural Gas Corporation from its foundation to the year 2000.

[edit]External links