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The business of oil and gas continues to be challenging,
complex and uncertain. However, ONGC has continued
to grow, first as a dominant E&P company and now as a
diversified energy major with strong presence across the
entire value chain. The country’s foremost energy explorer.
FY’19 was yet again a year of growth for ONGC and its
business. Internationally as well, it was a period of steady
recovery in the oil and gas sector as crude oil prices stabilised
at levels higher than a year ago and E&P sector recorded
impressive numbers.
That being said, uncertainty, still, remains a key feature of
the industry. Crude oil prices swung from a high of USD80 a
barrel to around USD50 in a span of few months as markets
reacted to, first, the impending impact of US sanctions on Iran
and then to record US production and a more conservative
outlook on global economic growth due to escalating trade
tensions between US and China.
While the need to plan for energy transition in the wake
of the global consensus and policy actions on the issue of
climate change and sustainability does make the current
period within the oil and gas community an exciting one as
it opens up new opportunity areas, it does bring its own set
of challenges with it.
As a Maharatna NOC in the energy sector, ONGC’s
decisions and actions during this period will be of immense
consequence to the country’s future energy landscape. The Company has chalked out a
comprehensive roadmap for its future growth factoring in
its historical competencies as well as emerging avenues
that align with its business objective of ensuring country’s
energy security.
Performance in core business of E&P remained
impressive during FY’19. With another year of positive
reserve replacement and meaningful discoveries,
Exploration continues to power the Company’s promises of
future growth in the domestic basins. a total of
13 discoveries during the year, of which 8 were onland and
5 in offshore areas. monetized 5 of
those discoveries during the year itself. Reserve accretion
for the year stood at 63.02 MMtoe on 2P basis and a Reserve
replacement ratio of 1.41 means that we replenished more
than the total quantum of hydrocarbon produced during the
period.
A big positive of exploratory efforts were the first time discoveries in Bengal Basin (Well Asokenagar-1)
and Vindhyan Basin (Well Hatta-2). With this exploratory
success, these basins have now been upgraded to CategoryII (basins with known accumulation of hydrocarbons) from
Category III (basins with just having hydrocarbon shows).
Production of standalone oil and gas edged up marginally
relative to FY’18 – we produced 45.86 MMtoe in FY’19
against 45.79 MMtoe in the preceding fiscal. The higher
output was driven by pickup in gas output, which grew
5.4% year-on-year, on the back of additional supplies from
Daman in Western offshore, S1-Vashistha in deepwater
Eastern offshore and Tripura onland. It represents the
fourth yearsin succession that gas output has increased
and production outlook remains positive for the next few
years with significant contribution coming from East-Coast
Deepwater development project KG-DWN-98/2 coupled
withupswingin output from Daman in Western Offshore. In
view of the critical role of energy, especially Oil and Gas
in the country’s economic growth and development agenda,
the Company is actively implementing redevelopment and
Enhanced Oil Recovery schemes.
Management remains focussed on the E&P business,
even as it diversifies into different areas of the hydrocarbon
value-chain. 10 E&P projects, worth `112,585 Million, were
completed during the year. As many as 25 projects, with an
estimated outlay of around `830,000 Million, are currently
under execution, of which 15 would directly contribute to
hydrocarbon production. Envisaged cumulative oil and gas
gains from these projects through their lifecycle stand at
over 180 MMtoe.

FY’19 marked another year of strong performance for
our Drilling operations. ONGC drilled a record a number
of wells – 516, the highest ever in the last 28 years. This
comprised of 105 exploratory wells and 411 development
wells.
Oil and gas is a capital-intensive enterprise and your
Company’s capital commitments over the years is testament
to this. Capex for FY’19 stood at `294,498 Million, while
budgeted capex for the ongoing fiscal i.e. FY’20 is `329,208
Million.

This video is for Educational purpose. Investors can use these ratios to understand the quality of the companies listed on stock exchanges BSE and NSE. Investors should buy gradually at reasonable price levels.
Data Source : Screener.in, India Ratings and Research Report, CARE Rating, CRISIL
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