It gives me great pleasure to present, on behalf of the Board of
Directors of your Company, the 21st Annual Report on the business and
operations of Oil And Natural Gas Corporation Ltd. (ONGC) and its
Audited Statements of Accounts for the year ended March 31, 2014,
together with the Auditors'' Report and Comments on the Accounts by the
Comptroller and Auditor General (CAG) of India.
Your company along with its group companies has witnessed yet another
year of sustained performance, success and growth not only in its core
activities of Exploration and Production (E&P) of crude oil and natural
gas but also in other areas where we have engaged ourselves
Your company registered an increase of 5.6% in its PAT despite allowing
highest ever discount towards under- recoveries of Oil marketing
company (OMCs) at Rs. 563,843 million.
The domestic production by ONGC including its share in JV-PSC during
FY''14 was 50.86 MMToe which is about 1% lower than FY''13 production
(51.47 MMToe). Your company has been making all efforts to arrest the
decline in the production from its matured fields through various
measures like IOR and EOR. The company has made commendable performance
in the core area of exploration by registering Reserve Replacement
Ratio of 1.87. All efforts are being made to bring various marginal
fields to production to ensure sustained production performance.
A brief recap of the main achievements during this fiscal are:
- ONGC Deepwater drilling group set a world record of drilling deepest
ultra-deepwater well by successfully reaching the target depth of 7725
m. The well KG- DWN-2005/1-D-1 drilled by the Rig DDKG1 has set two
records – firstly, the world record of well at the deepest water depth
of 3174m and secondly, drilling the deepest offshore well of 7725m.
- The fiscal saw your company completing and successfully putting on
production its first deep water sub-sea well G1-11 in Eastern Offshore
through an Early Production System (EPS). This has been accomplished by
your company ensuring that the production volume from the well got
realized within shortest possible time after its completion by
connecting it with existing facilities of Odalarevu GCS near Kakinada
temporarily through 2x10 subsea pipelines.
- For the first time, your company has adopted easy cost planning for
workover operation on Pan-India basis in SAP system throughout ONGC.
- Your Company accreted 84.99 MMToe of ultimate reserves in the
domestic fields (ONGC operated); the highest in the last twenty three
- For the 9th consecutive year your company maintained the Reserve
Replacement Ratio (RRR) of more than 1. RRR during the year has been
- The Turnover of the Company stood at Rs. 842,028 million, the
highest-ever. The turnover of the ONGC Group at Rs. 1,782,051 million has
also been the highest-ever.
- Your Company recorded a Net Profit of Rs. 220,948 million during the
year under review, 5.6% higher than 2012-13 (Rs. 209,257 million).
- ONGC Videsh Limited (ONGC Videsh), wholly owned subsidiary of your
Company, which had in the recent past shown downward production volume
realization owing to extraneous geo-political situations in Sudan &
Syria, has recorded a 26% increase in crude oil production this fiscal
mainly on account of resumption of production from Sudan and also new
production stream from ACG, Azerbaijan and acquisition of additional
12% PI in Block BC-10 in Brazil.
- ONGC Videsh recorded highest-ever Net Profit of Rs.44,453 million.
- Your company''s subsidiary Mangalore Refinery and
Petrochemicals Limited (MRPL), has been upgraded to Schedule-A
Category-1 Mini-Ratna Company by the Department of Public Enterprises
(DPE), Government of India (GOI), thereby giving MRPL enhanced
administrative and financial autonomy.
- MRPL recorded the highest-ever thru''put of 14.6 MMT against an MoU
target of 14.5 MMT, thus securing ''Excellent'' rating in achievement of
its MOU targets.
- MRPL has posted a net profit of Rs.6010 million, an increase of 179%
from last fiscal''s loss of Rs. 7569 millions.
- Pursuant to the decision of the Government of India to divest 10% of
the equity share capital of Indian Oil Corporation Ltd, ONGC acquired
5% equity shares of Indian Oil Corporation Limited amounting to
121,397,624 equity shares of Rs. 10 each @ Rs. 220/- per share. The
consideration amount of Rs. 26,707 million has been paid to the
Government of India. Necessary disclosures in this regard have been
submitted to Stock Exchanges.
During 2013-14, your company had to share the highest-ever contribution
of Rs. 563,843 million (an increase of Rs. 69,636 million i.e 14% over the
previous year) towards the under-recoveries of OMCs. This has impacted
your Company''s Profit Before Ta x by Rs. 477,561 million and Profit after
Ta x by Rs. 315,238 million. However, your Company has been able to
achieve Net Profit of Rs. 220,948 million during 2013-14, which is 5.6%
higher than the profit of 2012-13.
You will be pleased to know that your Company has been ranked at 176th
in the 2014 Forbes Global 2000 list of world''s biggest companies. As
per the Platts 2013 rankings, your Company is ranked 3rd largest listed
E&P Company in the world and ranked 22nd Energy Company of the world
based on Asset, Revenue, Profit & ROCE. Your company has been adjudged
one of the
Fortune World''s most Admired Companies of 2014 as per CNN Money. There
are only two companies from India in the list and your company is the
only PSU in that coveted list. CNN Money has further ranked your
company 369th in its Fortune Global 500 (2013) list by Revenue among
global 500 companies. Adding to our global credentials is the fact that
this year also your company has been awarded ''Randstad Award 2013'' for
Most Attractive employer in the Energy Sector in India.
As a fitting acknowledgment of your Company''s green credentials, you
will be pleased to learn that ONGC has registered one of the largest
Clean Development Mechanism (CDM) projects in the world when it got
the ONGC Tripura Power Company Limited (OTPC) registered with the
United Nations Framework Convention on Climate Change (UNFCCC). This
726.6 MW gas-based power generation plant in Tripura is a
fuel-substitution project, which would mitigate over 1.6 million tons
of Carbon-dioxide emissions per year for the next 10 years. In
addition, your company has registered its 11th CDM project - the Green
Building Project at Kolkata, with the UNFCCC. The project, like its two
predecessors (Green Building Projects at Mumbai and Dehradun), has been
registered for 21 years and once commissioned, will fetch 1861 credits
During the year, your Company made 14 oil and gas discoveries in
domestic fields (operated by ONGC). Out of 14, 7 discoveries are in
offshore and 7 in onshore; 6 discoveries were made in the new prospects
whereas 8 were new pool discoveries. 5 discoveries were made in NELP
blocks and 9 in nomination blocks. Out of the discoveries made this
year, 2 are oil bearing, 9 are gas bearing and 3 are both oil & gas
In addition to these discoveries, 32 more exploratory wells drilled for
delineation/appraisal of known pays in existing fields were hydrocarbon
bearing and have resulted in field growth.
Out of 7 on-land discoveries made during 2013-14, 4 discoveries
(Gandhar-686, Sobhasan-300, Nandasan-111 & Geddanapalli-3) have already
been put on production and efforts are on for bringing the other
discoveries on production as early as possible.
Five discoveries in NELP blocks (one onland and four offshore) are
governed by the PSC guidelines and appraisal/development activities
will be taken up keeping in view the time lines of the respective
blocks. Details of the discoveries are as under:
Sl. Name of the well Hydro- Basin Block Type &
Block Name Pool/
No carbon Prospect
New Prospects Discovery
1 KGOSN041NANL #1 Gas KG(Shallow
Water) NELP;KG-OSN-2004/1 Prospect
2 KGOSN041NANL#2 Gas KG (Shallow
Water) NELP ; KG-OSN-
3 Seripalem-1(SRM-AA) Gas KG Onshore Nomination;
4 MBOS51NAA#1 Gas Western
Offshore NELP; NB-OSN-2005/1 Prospect
5 Mandapeta South # 1
(MDS-AA) Gas KG Onshore Nomination; Godavari
on-land PML Prospect
6 NW-B173A-8 Oil
& gas Western
& East Bassein PML Prospect
New Pool Discovery
7 GK-28 # 9 Gas Kutch
(Shallow Western Offshore Pool
Water); GK-28 PML
8 GK-42 # 3 Gas Kutch
(Shallow Western Offshore
Water); GK-28 PML
9 Gandhar # 686 Oil & Gas Western
Onshore Nomination; Gandhar
Extension VI PML Pool
10 SB#300 (SBCG) Gas Western
Onshore Nomination; Geratpur
(GLAC) Oil KG Onshore Nomination; Godavari
12 KG982NA-M#3 Oil &
Gas KG Deep
Offshore NELP; NDA of KG-DWN
13 Khubal#7 (KHBJ) Gas A&AA NELP; AA-ONN-2001/1 Pool
14 Nandasan-111 (NNBC) Oil Western
Onshore Nomination; Nandasan
Extn-I PML Pool
The new prospect discover y in NELP Block KGOSN041NANL #1 (Shallow
Water) is important because this will help in augmenting hydrocarbon
volumes established through four earlier discoveries namely Chandrika
South, Alankari, Saveri & NANL-2 in the block. This will add to ONGC''s
efforts towards attaining critical hydrocarbon volumes for viability of
a possible ''cluster based development'' of these discoveries.
Similarly, discovery MBOS51NAA#1 in NELP block NB-OSN-2005/1 is in
close vicinity of C-37/ C-39, B-9 areas that will enhance the overall
gas potential of the area. Mandapeta South # 1 (MDS-AA) discovery south
of main Mandapeta field has indicated for the first time possible
production potential of tight reservoirs found in the area through
hydro-fracturing. The discovery NW-B173A-8 in South & East Bassein PML
area in Mukta formation has huge upsides to the production potential of
producing field B-173A.
New pool discoveries GK-28 # 9 and GK-42 # 3 in GK-28 PML block in
Kutch Shallow Water has a good potential to add value to GK-28/GK-42
areas which ONGC plans to put on production. Besides, this discovery
has potential to add a new basin to the list of producing basins in the
country. Similarly, the new oil & gas pool discovery Gandhar # 686 in
Gandhar Extension VI PML area has shown first occurrence of oil in sand
GS-11 in the South Western part of Gandhar field which will help in
opening the sector for further growth of this field.
The discovery SB#300 (SBCG) in Kalol formation South East of main
Sobhasan field, in a separate fault block on the plunge of Sobhasan
structure is the first gas discovery in KS-IV Sub pay and hence it will
lead to adding a new gas play to the area. The discovery of Khubal#7
(KHBJ) in a separate fault block in NELP block AA-ONN-2001/1 in Assam &
Arakan basin is likely to add volumes to the already established
in-place gas in the block and thereby help our fertiliser business that
is planned through gas from Khubal area.
The dominance of oil in Northern Discovery Area (NDA) which has been
established through the earlier notified KG98/2NA-A#2 discovery is
further confirmed by the new pool discovery KG98/2NA-M#3 this year
which has potential to take the in-place oil volumes to more than 100
MMt. Current estimated Oil & Gas (O OEG) volumes in NDA stand at 190
MMToe as on 01-04-2013 and are likely to grow to the order of 290 MMToe
with the addition from this M#3 discovery.
Reserve accretion & Reserve Replacement Ratio (RRR)
Continuing exploration in challenging and frontier areas, your company
has accreted 255.56 million metric tonnes of oil equivalent (MMToe) of
In-place volume of hydrocarbon in the domestic basins (operated by
ONGC). As on 31.03.2014, the in-place Reserves of ONGC as a group
stands at 2,004.15 MMToe; up 14% from FY''13 figure of 1,759.43 MMToe.
The ultimate reserves accretion by ONGC in domestic area during FY''14
has been 84.99 MMToe, the highest in last 23 years. Total reserve
accretion in domestic basins including ONGC''s share in PSC JVs stands
at 89.76 MMToe. With a Reserve Replacement Ratio (RRR) of 1.87 (with 3P
Reserves) for its domestic basins, it was the 9th consecutive year that
your Company has maintained an RRR of more than one.
Voluntary disclosures in respect of Oil & Gas Reserves, conforming to
SPE classification 1994 and US Financial Accounting Standards Board
(FASB-69) have been made by your Company.
Following is the reserve accretion details which your company has been
pursuing with great vigour & conviction:
Ultimate Reserve (3P) accretion O OEG (in MMToe)
Year Domestic ONGC''s share in Total ONGC VIDESH''s Total
Assets Domestic Jvs Domestic Share in
(1) (2) Reserve Foreign Assets
(2) (4) (5)=(3) (4)
2008-09 68.90 2.82 71.72 135.08 206.80
2009-10 82.98 4.39 87.37 0.35 87.72
2010-11 83.56 0.29 83.85 46.23 130.08
2011-12 84.13 1.31 85.44 -0.31 85.13
2012-13 84.84 4.24 89.08 14.16 103.24
2013-14 84.99 4.77 89.76 212.59 302.35
Statement of Reserve Recognition Accounting (RRA)
Reserve Recognition Accounting is a statutory compliance 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 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
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 reserve 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
reserve at Annexure-''A'' to this report as statement of Reserve
Recognition Accounting (RRA).
Unconventional sources of energy
ONGC plans to continue its endeavour for exploration and development of
Unconventional & other resources like Shale Gas, CBM, HP/HT, Fractured
Basement plays with the following initiatives:
a. Shale Gas and Oil
ONGC has the distinction of establishing the first flow of shale gas in
the country at Durgapur. Shale gas exploration and production is one of
the key elements of ONGC''s Perspective Plan 2030 wherein an accretion
potential of 850 to 1150 MMToe and production potential of 80 to 140
MMToe have been envisaged by the year 2030. ONGC is planning to explore
for shale gas in Cambay, Krishna- Godavari, Cauvery and Assam Shelf and
Government of India notified the New Shale Gas Policy for the NOCs on
14.10.2013 and according to it, ONGC and OIL will initiate shale gas
and oil exploration activities in their nomination blocks in a phased
manner. ONGC has identified 50 nomination blocks, of which 28 blocks
are in Cambay basin, 10 in KG basin, 9 in Cauvery basin and 3 in Assam
Following the notification of the policy, ONGC has already drilled its
first pilot Shale gas well JMSGA(DD-3305 m) in the Cambay basin.
Extensive coring (139 m) was carried out in this well and studies on
cores and analysis of wire line logs are in progress which will help in
assessing the shale gas and oil potential of Cambay Shale, main source
rock in the basin. Identification of prospective shale gas blocks in
different basins has been completed and ONGC plans to take up shale gas
activities aggressively in these basins. Around 20 similar pilot wells
are planned to be drilled in Cambay, KG, Cauvery and A&AA basins in
2014-15. Success in these envisaged Shale Gas pilot programme will
help in unlocking unconventional shale gas and oil reserves in dif
b. Coal Bed Methane(CBM)
ONGC has taken concrete steps to discover Coal Bed Methane (CBM) in the
country and is currently operating in four CBM Blocks i.e., Jharia,
Bokaro, North Karanpura and Raniganj. The Development Plans for all the
four blocks has been submitted and approved by the Steering Committees.
Nearly 400 wells and 2000 hydro-fracturing jobs would be carried out in
the coming 4-5 years as per timelines of the CBM Contract. In view of
the mammoth and time bound task, ONGC has decided to farm-in
experienced partners to execute field operations, process for
acquisition of which is in an advanced stage.
ONGC has started selling incidentally produced CBM gas from existing
wells at Parbatpur of Jharia Block at an approved price of .1 per
MMBTU i.e. Rs. 9.75 per SCM approx. The cumulative gas sale as on 31st
March 2014 is 11.41 MSCM. The Commercial CBM production in ONGC blocks
is yet to start.
c. Underground Coal Gasification(UCG)
ONGC has selected Vastan Mine block in Surat district, Gujarat for UCG
Pilot project. All the ground work and inputs for pilot construction
have been finalized for implementation. Gazette notification from GoI
for UCG block allocation in the form of Notice Inviting Application
(NIA) had been issued on 29th July, 2013. According to the NIA the
block shall be allocated to state PSU located in Gujarat. GIPCL,
Gujarat being partner in ONGC''s UCG venture, submitted a fresh
application on 21st August,2013.
The issue of Mining Lease for the block is awaited. The Pilot
construction and erection of surface facilities shall be taken up only
after the allocation of the Vastan Mine block.
Further, a number of sites have been jointly identified by ONGC &
Neyveli Lignite Corporation Limited (NLC) for studying their
suitability to UCG. These are Tadkeshwar in Gujarat and Hodu-Sindhari&
East Kurla in Rajasthan. One more site was jointly identified by ONGC &
GMDC at Surkha in Bhavnagar district, Gujarat. The data of all the
fields have been analysed for evaluating the suitability of these sites
for UCG. All sites have been found suitable for UCG exploration.
Oil & Gas production
During FY ''14, like earlier years, your company being the largest
producer of oil and gas in the country, was able to maintain its
relevance by contributing 69 per cent of oil and 62 per cent of natural
gas production of the country from its domestic operations.
Oil & Gas production of ONGC Group, including PSC-JVs and from overseas
Assets for FY''14 has been 59.21 MMToe (against 58.71 MMToe during
FY''13). The upward volume came from our overseas asset at Ajerbaijan
and also from resumption of production in Sudan & South Sudan where
production was suspended owing to geopolitical situations. However,
when compared to 2011-12, the production is slighlty lower owing to
unrest in Syria and still inadequate production from Sudan & South
Sudan and the natural decline in overseas matured fields in Sakhalin-1,
Russia, San Cristobal Project, Venezuela and BC-10, Brazil, besides the
natural production decline in domestic mature fields. The fall in
production was offset through IOR & EOR ef forts.
Out of the total production of 31.49 MMT of crude oil, 70.6 per cent
production came from ONGC operated domestic fields, 17.4 per cent from
the overseas assets and balance 12 per cent from domestic joint
ventures. As far as natural gas production is concerned, majority of
production (84 per cent) came from ONGC operated domestic fields, 10.4
per cent from overseas assets and 5.6 per cent from domestic joint
Production from overseas assets
ONGC Videsh, has thirteen (13) producing assets in eight countries -
Venezuela (1), Brazil (1), Colombia (1), Sudan (1), South Sudan (2),
Syria (1), Vietnam (1), , Mayanmar (2), Russia (2) and Azerbaijan (1).
Total production from these overseas assets during FY''14 has been 8.36
MMToe of O OEG (Crude oil: 5.49 MMT & Gas: 2.87BCM).
Ajerbaijan has contributed 12% as compared to around 0.1% last year.
Resumption of operations in South Sudan & Sudan has also contributed to
this years increased volume contributing 13.2% this year as compared to
8.2% last year. Russia & Vietnam continued to be the biggest
contributor to overseas production volume with 29.4% and 23%
respectively followed by Venzuela with 10.8%.
The following new projects are under implementation:
- Integrated Development of Vasihita and S1 Fields -
The project envisages gas production of 15.96 BCM within 9 years from
completion with an investment of ?41243 million.
- Development Plan for lower pays in NBP- 14 Block of NBP field - This
project envisages an investment of ?4291 million for drilling and
completion of 6 development wells.
- Additional development of Vasai East field The Capex of this project
is ?24770 million and envisages installation of 2 well platforms (VSEB
& VSEC) and drilling of 20 wells with cumulative incremental oil & gas
production of 1.83 MMt and 1.971 BCM by 2029-2030.
- Mudline completion - Development of three shallow water wells
GS-15-9, GS-15-E1 & GS-48-1 through Sub- Sea mud-line tree in Eastern
Offshore. The project envisages gas production of 1.1 MMSCMD, gradually
reducing to 0.36 MMSCMD in 10 years with an investment of ?2848
Overall Production and Sales Performance
Presented below are the highlights of production and sales of Crude
Oil, Natural Gas and Value Added Products (VAP):
Unit Production Qty Sales Qty Value
FY''14 FY13 FY14 FY13 FY14 FY13
Oil (MMT) 25.99 26.13 23.61 23.69 525,734 533,268
Gas (BCM) 24.85 25.34 19.63 20.16 183,291 165,400
Propane 000 MT 430 428 428 425 14,837 13,440
LPG 000 MT 1,067 1,006 1,073 1,005 30,145 31,484
Naphtha 000 MT 1,358 1,534 1,379 1,520 75,743 76,804
SKO 000 MT 84 108 85 106 2,779 3,686
Others 2,124 1,589
Total 834,653 825,671
Spirit 000 KL 0.54 0.56 41 42
HSD 000 KL 0.05 0.02 3 1
Total 44 43
Total 834,697 825,714
1. Financial Results
During the year, your Company has earned a Profit After Tax (PAT) of ?
220,948 million up 5.6% over FY 2012-13 (?209,257 million)
Gross Revenue :? 842,028 million
Profit After Tax (PAT) ? 220,948 million
Contribution to Exchequer : ? 405,750 million
Return on Capital Employed : 39.62%
Debt-Equity Ratio : 0.00
Earnings Per Share (Rs.) : 25.83
Book Value Per Share (Rs.) 159
(Rs. in million)
Particulars 2013-14 2012-13
Revenue from operations 842,028 833,090
Other Income 67,132 54,367
Total Revenues 909,160 887,457
Profit Before Interest Depreciation
& Tax (PBIDT) 433,582 389,455
Profit Before Tax (PBT) 324,319 305,443
Profit After Tax (PAT) 220,948 209,257
Interim Dividend 79,138 76,999
Proposed Final Dividend 2,139 4,278
Tax on Dividend 13,807 13,012
Transfer to General Reserve 125,864 114,968
TOTAL 220,948 209,257
Previous year figures have been regrouped wherever necessary.
Previous year figures have been regrouped wherever necessary.
The increase in Profit during FY 13 -14 as compared to FY 12-13 is
mainly due to lower write off towards dry wells and appreciation in US$
against INR. This is inspite of contribution of record Rs. 563,843
Million by ONGC towards under-recoveries of Oil Marketing companies.
Your Company paid interim dividend of Rs.9.25 per share (185 per cent) in
two phases (Rs.5.00 and Rs.4.25). The Board of Directors has recommended a
final dividend of Rs. 0.25 per share (5 per cent) making the aggregate
dividend at Rs. 9.50 per share (190 per cent) for FY 13-14 i.e. same as
compared to dividend for the year 2012-13. The total dividend will be
Rs.81,277 million, besides Rs.13,807 million as tax on dividend amounting
to 43.03 per cent of PAT.
3. Management Discussion and Analysis Report
As per the terms of Clause 49(IV)(F) of the Listing Agreement with the
Stock Exchanges, the Management Discussion and Analysis Report (MDAR)
has been included and forms part of the Annual Report of the Company.
4. Financial Accounting
The Financial Statements have been prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) and in compliance with
all applicable Accounting Standards (AS-1 to AS-29) and Successful
Efforts Method of accounting as per the Revised Guidance Note on
Accounting for Oil & Gas Producing Activities issued by The Institute
of Chartered Accountants of India (ICAI) effective from 01.04.2013 and
provisions of the Companies Act, 1956. Further, as per Ministry of
Corporate Affairs (MCA) notification, the financial statements have
been prepared under the Revised Schedule VI format of the Companies
Act, 1956. It may be noted that the provisions of Companies Act, 2013
with regard to preparation of Annual Accounts shall become applicable
from the financial years commencing on or after 1st April, 2014.
I ONGC Videsh Limited (ONGC Videsh)
ONGC Videsh, the wholly-owned subsidiary of your Company for E&P
activities outside India, has participation in 33 projects in 16
countries e.g. Azerbaijan, Bangladesh, Brazil, Colombia, Iraq,
Kazakhstan, Libya, Mozambique, Myanmar, Russia, South Sudan, Sudan,
Syria, Venezuela and Vietnam. Out of 33 projects, 13 are producing, 4
are discovered/under development, 14 are exploratory and remaining 2
are pipeline projects.
ONGC Videsh is currently producing about 169 thousand barrels of oil
and oil equivalent gas per day and has total oil and gas reserves of
about 637 MMToe as on 31st March 2014. It has achieved the highest-
ever profit (PAT) of Rs.44,453 Million during FY'' 14, an increase of 13%
as compared to the PAT of Rs. 39,291 Million during FY''13. The increase
in profit can be attributed mainly to increase in production / sale
quantity and appreciation of US$ against the INR. ONGC Videsh''s share
in production of oil and oil equivalent gas (O OEG) of ONGC group,
together with its wholly-owned subsidiaries, ONGC Nile Ganga B.V., ONGC
Amazon Alaknanda Limited, Imperial Energy Limited and Carabobo One AB,
was 8.357 MMToe during FY''14 as compared to 7.260 MMToe during FY'' 13.
The oil production increased from 4.343 MMT during FY''13 to 5.486 MMT
during FY''14 (26.3% higher) primarily due to new production stream from
ACG, Azerbaijan; acquisition of additional 12% PI in Block BC-10,
Brazil; higher production from Sudan and South Sudan.
Significant Acquisitions, Alliances and Operations highlights of ONGC
Videsh during FY''14 are as follows:
i) ONGC Videsh with Oil India Limited (OIL) has acquired 10% (ONGC
Videsh - 6% and OIL - 4%) PI in the Rovuma Area 1 Offshore Block in
Mozambique (Area 1) at purchase consideration of USD 2511 Million on
7th January, 2014 by acquiring the share of Videocon Mozambique Rovuma
Your Company has also acquired 10% PI in the same area from Anadarko
Moçambique Area 1 Limitada at purchase consideration of USD 2640
Million on 28th February, 2014.
Area 1 covers approximately 2.6 million acres in the deep-water Rovuma
Basin of fshore Mozambique and represents the largest gas discovery in
offshore East Africa with estimated recoverable reserves of 50 to 70
trillion cubic feet.
ii) ONGC Videsh, through its subsidiaries, has acquired an additional
12% Participating Interest (PI) in Block BC-10, a deep-water offshore
block in Campos Basin, Brazil at purchase consideration of USD 561
million, taking its total PI in the block to 27%. The Company had
earlier acquired 15% PI in Block BC-10 in 2006.The transaction for 12%
stake in the block was completed in December, 2013.
iii) ONGC Videsh in partnership with OIL on 17th February, 2014, has
signed Production Sharing Contract (PSC) for two shallow water
exploration blocks SS-09 & SS-04 in the Bay of Bengal of Bangladesh.
ONGC Videsh and Oil India Limited (OIL) formed a consortium (50:50) and
participated in the Bangladesh Offshore Bidding Round 2012, launched by
Bangladesh Government during December 2012 and was officially notified
as the winner of the mentioned blocks on August 20th 2013. ONGC Videsh
has 45% PI in each of the Blocks with operatorship, 45% PI is held by
Oil India Ltd and remaining 10% PI is held by Bangladesh Petroleum and
Exploration Company Limited.
iv) On 10th October 2013, the Company was awarded two onshore
exploratory blocks namely B2 (Zebyutaung-Nandaw) and EP-3 (Thegon-
Shwegu) in the Myanmar Onshore Bidding Round 2013. Block B-2, having an
area of 16995 sq. kms is located in Northern Myanmar, bordering state
of Manipur in India and Block EP-3 having an area of 1650 sq. kms is
located in Central Myanmar. ONGC Videsh was one of the 7 Indian
companies which were shortlisted as Pre-qualified bidders by Government
of Myanmar for their Onshore 2nd Bid Round -2013 for 18 blocks. v)
During FY''14, ONGC Videsh has signed the following MoUs:
a) MoU with Petrovietnam - On November 20, 2013, in furtherance to
earlier MoU signed on October 2011 to promote joint cooperation in
hydrocarbon sector in Vietnam, India and other countries was signed.
Under the MOU, Petrovietnam has offered 5 blocks to ONGC Videsh. ONGC
Videsh would assess these blocks and if these are of interest, it would
make a proposal to PetroVietnam.
b) MOU with Coordinating Ministry for Strategic Sectors of Ecuador on
9th December 2013 over sharing of information regarding oil and gas
projects in Ecuador, which ONGC Videsh would evaluate to identify
projects of its interest and could propose participation in such
project(s) through specific definitive agreements.
c) MOU with PDVSA - On 9th October 2013 for strategic cooperation and
participation in the exploration and production of hydrocarbon
resources in the oil-rich Faja area of Venezuela and in other areas as
well in joint collaboration thereby enhancing ONGC Videsh''s interest in
vi) ONGC Videsh commenced first commercial production of gas from Block
A3 and Block A1 in Offshore Myanmar on 15th July 2013 and 10th January
2014 respectively. The combined production from these blocks is
currently 8.7 MMSCMD and is expected to reach a peak level of 14.20
MMSCMD in Q1 of 2015. ONGC Videsh has 17% PI in these blocks.
vii) ONGC Videsh has commissioned the Onshore Pipeline Gas
Transportation project in Myanmar in November 2013. The Contractual
Transportation Date has been notified as 1st December, 2013. The
onshore gas pipeline is currently under operation and is transporting
gas to both the Export and Domestic buyers.
viii) In Block BC-10, Brazil, the Phase II of the Project has also come
on stream in October 2013 with an expected peak production of about
35,000 barrels of oil equivalent per day (boepd) in 2014. The current
oil production from the block has reached 58,000 boepd at JV level.
Phase-III of the project has also started with drilling of wells and
first - oil is expected by April, 2016 with expected peak production of
about 28000 boepd in 2017. The production from all the phases is
expected to be about 75,000 boepd in 2017.
ix) After acquisition of 2.72% stake in ACG project in Azerbaijan,
additional oil production has commenced from West Chirag field on 28th
January, 2014. The current production from the project is 678,000 bopd.
x) The current geo-political situation in Syria including EU sanctions
and the resulting restrictions on contractors continues which has
adversely affected Syrian operations since December 2011.
xi) The operations in South Sudan projects are temporarily under
shutdown after internal conflicts and adverse security situation in the
country since 22nd December, 2013. However, a Ceasefire Agreement has
been signed on 9th May, 2014 by the warring parties and negotiations
are being carried out under the mediation of the African Union and
Inter-governmental Authority on Development (IGAD). Operations in South
Sudan shall resume once security situation improves.
Direct Subsidiaries and Joint Ventures of ONGC Videsh i. ONGC Nile
Ganga B.V. (ONGBV) ONGBV, a subsidiary of ONGC Videsh, is engaged in
E&P activities in Sudan, South Sudan, Syria, Venezuela, Brazil and
Myanmar. ONGBV holds 25 per cent Par ticipating Interest (PI) in
Greater Nile Oil Project (GNOP), Sudan with its share of oil production
of about 0.741 MMT during 2013-14. ONGBV also holds 25 per cent PI in
Greater Pioneer Operating Company (GPOC), South Sudan. Due to adverse
geo-political conditions, ONGC Videsh could produce only 0.218 MMT oil
in GPOC, South Sudan during FY''14.
ONGBV holds 16.66 per cent to 18.75 per cent PI in four Production
Sharing Contracts in Al Furat Project (AFPC), Syria. Due to
geo-political situations in Syria, ONGC Videsh could not produce any
oil in AFPC project during FY''14. ONGBV holds 40 per cent PI in San
Cristobal Project in Venezuela through its wholly owned subsidiary ONGC
Nile Ganga (San Cristobal) BV with its share of oil production of about
0.854 MMT during FY'' 14. ONGBV holds 27 per cent PI in BC- 10 Project
in Brazil through its wholly owned subsidiary ONGC Campos Ltda with its
share of oil and gas production of about 0.331MMToe during FY'' 14.
ONGBV also holds 25% PI in Block BM- SEAL-4 located in deep-water
offshore, Brazil through its wholly owned subsidiary ONGC Campos Ltda.
ONGBV also holds 8.347per cent PI in South East Asia Gas Pipeline Co.
Ltd., (SEAGP) for Pipeline project, Myanmar through its wholly owned
subsidiary ONGC Caspian E&P B.V.
ii. ONGC Narmada Limited (ONL)
ONL has been retained for acquisition of future E&P projects in
iii. 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 of China. During FY''
14, ONGC Videsh''s share of oil and gas production in MECL was about
iv. Imperial Energy Limited (Erstwhile Jarpeno Limited)
Imperial Energy Limited (Name changed from Jarpeno Limited with effect
from April 19th 2013), a wholly-owned subsidiary of ONGC Videsh
incorporated in Cyprus, has its main activities in the Tomsk region of
Western Siberia, Russia. During FY'' 14, Imperial Energy''s oil and gas
production was about 0.423MMToe.
v. Carabobo One AB
Carabobo One AB, a wholly-owned subsidiary of ONGC Videsh incorporated
in Sweden, indirectly holds 11 per cent PI in Carabobo-1 Project,
Venezuela. The early production has already started from first well
(CGO005) on 27th December 2012 @ 300 bopd. During FY'' 14, Carabobo''s
oil and gas production was about 0.022MMToe.
vi. ONGC (BTC) Limited :
ONGC (BTC) Limited holding 2.36 per cent interest in the
Baku-Tbilisi-Ceyhan Pipeline (BTC) owns and operates 1,768 km oil
pipeline running through Azerbaijan, Georgia and Turkey. The pipeline
mainly carries crude from the ACG fields from Azerbaijan to the
vii. 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 per cent equity shares of OMEL in the ratio of 49.98
per cent (ONGC Videsh) and 48.02 per cent (MIS) with the balance 2 per
cent shares held by SBI Capital Markets Ltd. OMEL held 45.5 per cent PI
in exploration block OPL 279, Nigeria and holds 64.33 per cent PI in
exploration Block OPL 285, Nigeria. OMEL also holds 1.11 per cent of
the issued share capital of ONGBV by way of Class-C shares issued by
ONGBV exclusively for AFPC Syrian Assets; such investment being
financed by Class-C Preference Shares issued by OMEL in the ratio of
51:49 to ONGC Videsh and MIS respectively.
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, which is a single location 15 MMTPA Refinery
on the West coast.
Performance Highlights FY 2013-14
- MRPL achieved the highest-ever thru''put of 14.97 and it produced
14.59 MMT of petroleum products in FY''14, the highest-ever.
- FY''14 saw MRPL registering a handsome profit (PAT) of Rs.6010 Million
against a net loss of Rs.7,569.10 million that MRPL witnessed during
FY''13 owing to reduced gross margins and foreign exchange fluctuation
- Despite profit, however, Board of Directors of MRPL has not
recommended any Dividend payout for the financial year 2013-14
considering the working capital requirement, past losses and project
- MRPL exported 6.727 MMT of products against 6.838 MMT in the previous
year. The Export turnover rose to Rs.353,920 million in FY''14 with 6.15%
higher than previous F Y.
- Crude sourcing (Receipts): 14.971 MMT; Iran (28.91 per cent), Saudi
Arabia (22.51 per cent), ADNOC (17.09 per cent), Kuwait (9.77 per
cent), Mumbai High (9.27 per cent), Nile Blend (1.06 per cent) & Spot
(11.39 per cent).
Marketing & Retail Operations
The Company (MRPL) embarked into bulk sales of HSD after the
introduction of dual pricing for HSD. The turnover of Direct Marketing
stood at Rs.22, 910 Million in FY-14 as compared to Rs.25,830 Million in
FY-13. The Company could establish a good market reach for sale of
Petcoke after commissioning of Delayed Coker unit in April 2014. The
Company''s Joint Venture (Shell MRPL Aviation Fuel services Limited) for
marketing ATF has performed well and has increased its turnover by 34%
in FY14 as compared to last year.
Phase III - Brownfield expansion Project & SPM
MRPL''s Phase III up-gradation and expansion project has achieved an
overall progress of 99.68% as on 15.5.2014. The Company has already
commissioned the SPM facility in August 2013. During the month of
April/ May 2014 the Delayed Coker Unit and Coker Hydro Treater Unit and
one SRU unit have been commissioned. PFCC and two trains of SRU shall
be commissioned shortly. The physical progress of Polypropylene unit is
95.6% and is expected to be commissioned shortly. The total capital
expenditure incurred for all these projects so far is Rs.130,050 Million.
6. Exemption in respect of Annual Report of
Subsidiaries and Consolidated Financial Statement
In accordance with Ministry of Corporate Affairs (MCA) circular dated
8th February, 2011 and clarification dated 21st February, 2011, your
Board has accorded necessary approval for not attaching the Balance
Sheet and Profit & Loss Account of its subsidiaries (i) ONGC Videsh and
(ii) Mangalore Refinery and Petrochemicals Ltd. (MRPL). Full Annual
Report of ONGC including its subsidiaries will be made available to any
shareholder, if he/she desires.
Further, Annual Reports of MRPL and ONGC Videsh are also available on
website www.mrpl.co.in and www.ongcvidesh.com respectively.
In accordance with the Accounting Standard (AS)–21 on Consolidated
Financial Statements read with AS- 23 on Accounting for Investments
in Associates and AS-27 on Financial Reporting of Interests in Joint
Ventures, audited Consolidated Financial Statements for the year ended
31st March, 2014 of the Company and its subsidiaries form part of the
7. Joint Ventures/ Associates
i. ONGC Petro-additions Limited (OPaL)
ONGC Petro-additions Limited (OPaL), has been promoted by your company
as a Joint Venture (JV) Company, with envisaged equity stake of 26%
along with GAIL (15.5%) and GSPC (5%). The balance equity of 53.5% is
to be tied up with Strategic Partners/ FIs / IPO.
OPAL is a mega downstream petrochemical integrated project at Dahej SEZ
for utilizing in-house production of C2-C3 and Naphtha from various
units of ONGC.
Recently on August 23rd, 2013, your company signed a Product Sale
Agreements with OPaL for supply of feed-stocks, thereby enabling OPal''s
lenders to release funds for implementation of the project.
- Overall Cumulative progress is 89.84 %.
- Total cumulative expenditure as on 31st March 2014 is Rs.181,557
million. Approved project cost is Rs.213,960 million.
- Debt closure has been attained for approved project cost of Rs.213,960
million with the execution of Rupee Term Loan agreement, for Rs. 149,770
million, including ECB of USD 300 million.
- Based on the current project progress, expected completion schedule
of the Project is Jan, 2015.
ii. ONGC Tripura Power Company Ltd (OTPC)
Your Company has promoted OTPC with an envisaged 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% is proposed to
be tied up through IPO / Strategic / Financial Investor.
OTPC is setting up a 726.6 MW (2 X 363.3 MW) gas based Combined Cycle
Power Plant (CCCP) at Palatana, Tripura. The basic objective of the
project has been to monetize idle gas assets of ONGC in land- locked
Tripura state and to boost exploratory efforts in the region.
OTPC''s first unit (Unit-1) was dedicated to the Nation by the Hon''ble
President of India on 21st June, 2013. However, commercial operation
of its first unit (363.3 MW) effectively got started from 4th January
2014 in presence of representatives of beneficiary states. The second
unit is expected to be commissioned in the second quarter of financial
- The unit has been granted provisional tariff by Central Electricity
Regulatory Commission (CERC). The Ministry of Power has allocated more
than 86% of power from the project (two units) to the NER beneficiary
states while 98 MW is allocated to OTPC for merchant sales. The OTPC
has already signed a gas sale and purchase agreement (GSPA) with ONGC
for supplying Daily contracted Quantity of 2.65 MMSCMD of gas.
- The 663 KM long 400 KV double circuit transmission network
Palatana-Bongaigaon transmission has been commissioned up to Byrnihat
by North-East Transmission Company Limited (NETCL), a joint venture of
Power Grid Corporation, OTPC and Governments of the North-Eastern
states. This development is helping in evacuating power from Unit-1 and
enables partial evacuation from unit II. For complete evacuation of
Unit-II power, the remaining Byrnihat-Bongaigaon section of the line
requires to be completed and its completion is expected to coincide
with Unit II commissioning, subject to timely resolution of certain
forest clearance issues.
- The total expenditure incurred on the project till 31st March, 2014
is Rs.34,560 million against the total estimated cost of Rs.40,470 million.
- State Bank of India is funding the entire debt for the project at a
Debt: Equity ratio of 75:25.
iii. ONGC Mangalore Petrochemicals Limited (OMPL)
Your company has promoted OMPL as a value-chain integration project for
manufacturing Para-Xylene and Benzene from the Aromatic streams of MRPL
with an envisaged equity participation of 46% along with MRPL (3%),
with balance 51% to be tied up through IPO / Strategic / Financial
Investor Present status:
- Overall Cumulative progress is 98.5% as on 31st March 2014
- Total cumulative expenditure on the project is Rs.51700 million.
Approved project cost is Rs.57500 million.
- The commercial operation date (COD) is August 2014.
iv. Dahej SEZ Ltd (DSL)
Your company as Lead Promoter is developing a multi-product SEZ at
Dahej in coastal Gujarat to facilitate your company''s endeavours at C2-
C3 Extraction and value-chain integration project – OPaL. Your company
has 23% equity in the project with GIDC having 26% and balance 51% is
proposed to be tied up through IPO / Strategic / Financial Investor.
- SEZ is already operational and units in SEZ have clocked export of
Rs.14,200 million in FY 2012-13 and Rs.19,740 million in FY 2013-14.
- 92% of the leasable land has already been allotted and the remaining
land is expected to be leased in the next two years.
- Expert Appraisal Committee of Ministry of Environment and Forest
(MoEF) has recommended CRZ clearance for 123.42 ha of land in Dahej
SEZ. Formal approval is awaited.
v. Mangalore Special Economic Zone Limited (MSEZ)
With an envisaged equity stake of 26% along with KIADB (23%), IL&FS
(50%), OMPL (0.96%) and KCCI (0.04%), ONGC is setting up MSEZ to serve
as site for development of necessary infrastructure to facilitate and
locate ONGC/MRPL''s Aromatic complex being promoted by ONGC.
- 65% of the leasable land has already been allotted.
- Pipeline Corridor development - MoEF clearance is awaited for
construction works at Reach 2 (~ 1.8 km). Pursuant to presentations to
Expert Committee of MoEF and clarifications, recommendations have been
submitted to MoEF, Delhi. Final clearance is awaited. However, interim
arrangement for laying of OMPL pipelines in this reach has been made,
thereby facilitating OMPL to utilize the corridor.
- Land acquisition issues at Reach 3 (~1.5 kms) – Gazette notification
has been issued. Price fixation meeting was held on 23rd Oct''13
although resolution would take one more round of discussions. However,
due to Lok Sabha elections and the model code of conduct, further
discussions could not take place. Interim arrangement for laying of
OMPL pipelines in this reach has also been made, thereby facilitating
OMPL to utilize the corridor.
- River Water infrastructure: Supply to MRPL and OMPL has commenced.
Water Agreement has been initialled with OMPL and is under finalization
vi. ONGC TERI Biotech Limited (OTBL)
ONGC TERI Biotech Limited (OTBL) which was incorporated on 26th March,
2007 is a Joint-venture Company of ONGC in association with The Energy
Research Institute (TERI), with shareholding of 49.98% & 48.02%,
respectively. Balance 2% is held by FIs. Through the ef forts of joint
research of ONGC & TERI over the years, OTBL is offering below
mentioned technologies and providing various Biotechnical Solutions to
Oil and Gas Industry, both in India and abroad:
I) Oilzapper Technology (Bioremediation)- used to eliminate & tackle
Oil Spills, Oily Sludge, and hazardous hydro carbon waste;
ii) Paraffin Degrading Bacteria (PDB)- used to prevent Paraffin
Deposition in Oil well Tubing;
iii) Wax Deposition Prevention (WDP)- used to prevent Paraffin
Deposition in surface and sub-surface flow lines;
iv) Microbial Enhanced Oil Recovery (MeOR)- used for Enhanced Oil
Recovery by mobilizing crude oil trapped in pores of Oil Reservoirs.
During 2013-14 the turnover of OTBL was Rs.154.4 Million with Profit af
ter Ta x of Rs.44.8 Million as against turnover of Rs.136.61 Million and
Profit after Ta x of Rs.40.05 Million in the previous year.
vii. Petronet MHB Limited (PMHBL)
- PMHBL is a JV company wherein your company has an equity stake of
28.766% along with HPCL (28.7%) and PIL (7.898%) with balance 34.57 per
cent of equity being held by leading banks.
- PMHBL owns and operates a multi–product pipeline to transport MRPL''s
products to the hinterland of Karnataka.
- In FY''14 PMHBL pipeline has transported a throughput of 3.07 MMT
against total throughput of 2.82 MMT last year. As per un-audited
results for the year 2013-14, the turnover and PAT of PMHBL are Rs.1295
million and Rs.510 million respectively.
viii. Petronet LNG Limited (PLL)
ONGC has 12.5 per cent equity stake in PLL, identical to stakes held by
other Oil PSU co-promoters viz., IOCL, GAIL and BPCL. Dahej LNG
terminal of PLL having a capacity of 10 MMTPA is currently meeting
nearly 20 per cent of the total gas demand of the country. A new LNG
terminal of capacity 5 MMTPA has been set up at Kochi and was dedicated
to the Nation by Hon''ble Prime Minister of India on 4th January, 2014.
The Company is also planning to set up an LNG terminal of capacity 5
MMTPA at Gangavaram, Andhra Pradesh. The turnover of PLL during
2013-14 is Rs.377,476 million (previous year Rs.314,674 million) and net
profit is Rs.7,119 million (previous year Rs.11,493 million).
ix. Pawan Hans Limited (PHL)
ONGC 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 of Asia''s largest helicopter operators
having a well- balanced operational fleet of 40 helicopters. It
provides helicopter support for ONGC''s offshore operations. PHL was
successful in providing all the 12 Dauphin N and N3 helicopters fully
compliant with AS- 4 as per the new contract with ONGC. The accounts of
PHL for 2013-14 are under finalisation.
8. Other New Projects/ Business initiatives
a. C2-C3-C4 Extraction Plant
Your company has set up a C2-C3-C4 extraction plant at Dahej with LNG
from Petronet LNG Limited (PLL) as the feed stock. Commissioning of the
Plant is expected to commence by July 2014. Ministry of Finance, Govt
of India, vide its notification dated 17th Feb 2014 has resolved
Taxation issues. Ministry of Petroleum & Natural Gas has allocated
domestic gas for commissioning of the plant on 11th April 2014.
b. Urea Fertilizer Business
ONGC signed a Memorandum of Understanding (MoU) with M/s Chambal
Fertilizers and Chemicals Ltd. (CFCL) and the Government of Tripura for
setting up a 1.3 MMTPA capacity urea fertilizer plant in Tripura. MoU
was signed on April 9th, 2013. Feedstock for the proposed plant
(Natural gas) will be supplied from Khubal field in AA-ONN-2001/1 block
where substantial gas reserves have been established. Gas requirement
for the plant is estimated to be 2.4 mmscmd. The project cost is
executives to share documents from their desktops while participating
in the multiparty video conferencing. Executives on the move can also
participate in multiparty video conferencing through their smart phone
- Lotus Connections: To create an environment that facilitates
collaboration and innovation, ONGC Blog site based on Lotus Connections
has been launched where users can share information online using
technologies like blogs, wikis, and activity streams. Employees have
started using the platform to share knowledge & opinion.
- Cyber security Crisis management team – To strengthen information
security management with focus on cyber security, proposal for Cyber
Security Crisis Management team has been initiated.
- Project IT- Under IT Skill & Proficiency psruk%
Development Programme through Project IT- psruk continued for the
year 2013-14 also.
- HIS (Healthcare Information System): Standardized version of HIS -
which was developed to bring in uniformity in working of ONGC
health-centers and Hospitals across the organization, has been rolled-
out across 20 work-centers.
- IT Service Management (ITSM): To improve performance of IT service
management across the enterprise and for better alignment of IT
services & business strategy, all IT helpdesk sites have been taken up
for ISO 20000 Certification. Six sites at Delhi & Mumbai, which were
already certified for ISO 20000, the certification has been upgraded to
the latest version.
- Broadband Wireless Access for remotes: To improve IT applications
performance & voice connectivity at remote installations, the contract
for Point-to-Multipoint Broadband Wireless Access (BWA) Radio System
for remote sites at North East & Southern Assets of ONGC was awarded on
turnkey basis. The project is under execution.
- Satcom Upgradation: For voice & data communication connectivity,
remote installations at offshore are primarily dependent on Satcom
(Satellite communications). This also provides primary connectivity to
many onshore installations and secondary connectivity to other
installations at onshore. Satcom infrastructure equipment has become
old and lived its useful life. The project for Upgradation of Satcom
Infrastructure has been taken up.
- Microwave backbone: Work for setting up onshore to offshore high
capacity microwave backbone communication link between
Uran-Neelam-B193- BPA Offshore Complex, is awarded and shall be in
service by August 2014. This is the first high capacity microwave
communication link from base to offshore installations
11. Health, Safet y and Envir onment(HSE) accreditations
Safety, Occupational health and protection of environment in and around
its working areas are prime concerns of ONGC. ONGC has implemented
globally recognized QHSE Management System conforming to requirements
of QHSE Certifications ISO 9001, ISO 14001 and ISO 18001 (OHSAS) at
ONGC facilities and certified by reputed certification agencies at all
its operational units. As on date, 412 Nos of working units have third
party certified integrated QHSE Management System. ONGC follows the
internationally accepted practices with regard to incident reporting,
investigation and monitoring of recommendations.
A few highlights of HSE during 2013-14 are:
- Regular QHSE internal audits
- Fire safety measures including regular fire and earthquake mock
- Training on HSE related topics,
- Environmental analysis
- PME of employees and Health Awareness programs
- Water and electricity conservation, Noise and pollution reduction
- Material Safety Data Sheets(MSDS),
- Personal protective Equipment''s(PPE),
- Solid waste management and Developing E- waste disposal procedure,
- Jatropha garden and identification and implementation of Environment
Management Programmes (EMP) and Occupation Health & Safety(OHS)
programs as per need of the unit,
- Energy conservation awareness through display and communication,
- Accident, near miss and Governance, Risk & Compliance (GRC)
ONGC is now an Accredited Environment Impact Assessment (EIA)
Consultant organization by Ministry of Environment & Forest (MoEF) in
Oil and Gas Exploration, Development and Production in Offshore/Onshore
areas and Petroleum refining industry.
ONGC has undertaken Ringal plantation (Hill bamboo) in Joshimath and
Kedarnath forest areas of Upper Himalayas to strengthen fragile
Himalayan eco-system. Plantation of 7.0 Lakh ringal in Upper Himalayas
has been completed in an area of 280 Hectares. The Next Phase of ringal
plantation is under progress for planting 3.75 Lakh plants in 150
A project on mangrove plantation along the shores of Dhadar River on
West Coast has been taken up by ONGC to protect erosion of the
shoreline. Phase 1 of the project, more than 17 lakh mangroves have
been planted in the soil erosion-prone area along the coast of the
Dhadar River at Ankleshwar.
With a view to seek environmental friendly options for the disposal and
treatment of accidental oil spillages and the tank bottom sludge
generated during the routine operations, ONGC explored the
biotechnological option i.e. bioremediation wherein indigenous
micro-organisms are isolated and enriched and harnessed on mass scale
for application in the field. In the year 2013-14, 25000 MT of oily
waste was treated through this technique in ONGC.
12. Sustainability Development
ONGC, one of the premier energy majors of the world and the highest
profit earning PSU of India, realises its responsibilities in ensuring
sustained development through protection of the ecological system. It
therefore strives to position itself as a leading organisation in
sustainable management and is aiming to achieve sustainable development
through a holistic approach to carbon management. We believe that
focused carbon management efforts are an ideal route to cover the
elements of our business specific sustainable development issues across
the environmental dimension. A critical area of environmental
sustainability is mitigation of global greenhouse gas from operations.
It is an organizational objective for us to progressively reduce our
carbon footprint, by working towards reduction in both direct and
indirect energy consumption.
The Company proposes to make a comprehensive, organization-wide GHG
inventory that covers both direct and indirect energy over the next two
to three years. This would provide the overall carbon footprint of the
organization and help identify mitigation opportunities. A pilot
exercise to assess GHG footprint of our representative operating units
has already been completed. This pilot is now being scaled up into a
pan ONGC GHG accounting exercise to assess our organisational carbon
footprint and importantly to undertake a rigorous study for
identification of all feasible GHG mitigation opportunities.
The following efforts undertaken by ONGC illustrate its commitment to
a. Sustainable Water Management (SWM) Water Mapping:
Water mapping study was completed for Ankleshwar and Rajamundry Assets
and Hazira Plants. Based on the mapping, following projects have been
identified for consideration under SWM umbrella:
Reuse and Recycle:
The concept was implemented as a pilot project, an STP of 50 KLD
capacity was installed in the CISF Colony at Mehsana. The Project was
executed in February 2014.
In association with Mehsana Asset under SWM program, the following
gains have accrued:
- Mud Recycled upto 2013-14 =30128 M3
- Fresh Water Saved by Mud Recycling=22596 M3 upto 2013-14,
- Fresh Water Saved by Use of Treated Effulent=212059 M3
- Total Fresh Water Saved=234655 M3 (Upto 2013- 14) starting from
Desalination: A 20 MLD Desalination plant has been proposed for Uran
Rain water Harvesting
Rain water harvesting projects at various assets, Basins and plants are
in various stages of implementation. This year harvesting has been
conceived at Tripura and Ahmedabad Asset which are being implemented.
Besides, harvesting at Rajahmundry Asset has also been conceptualized
which will be implemented next year. Rain water harvesting at Vadodara
has already started and is recharging ground water. More wells are
being conceptualized to expand the programme.
b. Carbon Dioxide mitigation and low carbon initiatives
ONGC has also collaborated with Cleen, Finland in the area of carbon
capture and joined its program.
c. Clean Development Mechanism (CDM)
ONGC commenced its CDM journey in 2006. Till date, ONGC has registered
11 CDM projects with UNFCCC. About 3 new CDM projects have been
registered and other 3 registered projects have been successfully
verified for issuance of 182529 CERs (Carbon credits). These CDM
projects are listed below:
Registration of new CDM projects
1. Gas Flaring Reduction at Neelam&Heera Asset
2. Natural gas based combined cycle power plant in Tripura
3. Green Building project at Kolkata
Issuance of Registered CDM projects
1. Waste heat recovery from Process Gas Compressors Mumbai high south
2. 51 MW wind power project of ONGC at Surajbari
3. Amine Circulation Pumps Energy Efficiency at Hazira Plant, ONGC
d. Carbon Foot Print
Comprehensive companywide GHG accounting has been completed. With this
exercise, potential area of carbon management has been identified to
reduce carbon footprints of ONGC.
e. 3G Bio-refinery
ONGC is planning to setup a 3G bio-refinery to meet the government
mandate of E95 (blending of 5% ethanol to gasoline).
f. Solar power CSP-ST technology
CM&SG is in talk with Rippaso Energy for establishing a 3MW pilot solar
power project at Gamnewala, Jaisalmer.
g. Carbon neutral PETROTECH 2014:
PETROTECH 2014, a biennial international event has been declared carbon
neutral. Total 3000 VERs were exchanged to make the event carbon
neutral. This is second event of its kind that was made carbon neutral
h. Global Methane Initiative (GMI)
Fugitive emission Identification & Quantification (IQ) jobs have been
completed as per PC targets. Ahmedabad Asset and BPA& BPB offshore
installations were mapped for fugitive emissions. The reports have been
submitted to respective heads to take corrective actions.
ONGC has provided IQ services to GAIL and Gail Vijapur plant was mapped
for fugitive emission and thereby earning revenue for the company.
13. Business Responsibility Report – 2013-14
Securities & Exchange Board of India has introduced Clause 55 to the
Listing Agreement with the Stock Exchanges, which states that Listed
entities shall submit, as part of their Annual Report, Business
Responsibility Report, describing the initiatives taken by them from an
environmental, social and governance perspective. Accordingly, the
second Business Responsibility Report – 2013-14 has been drawn up and
forms part of the Annual Report for 2013-14.
14. Internal Control System
Your Company has a well-established and efficient internal control
system and procedure. The Company has a well-defined delegation of
financial powers to its various executives through the Book of
Delegated Powers (BDP). The Integrated BDP is updated from time-to-time
in line with the needs of the organisation as well as to bring further
delegation. The Company has in-house Internal Audit Depar tment
commensurate with its size of operations. Audit observations are
periodically reviewed by the Audit, Ethics & Financial Management
Committee of the Board and necessary directions are issued whenever
15. R&D EFFORTS THROUGH ONGC ENERGY CENTRE TRUST (OECT)
Your company has taken steps to evaluate various forms of energy to
fulfil the country''s growing energy needs. Towards this end, your
company has established an ONGC Energy Centre Trust (OECT), which is
mandated to undertake or assist in programs / projects of fundamental
and applied research for improving and developing commercially viable
energy mediums and sources beyond hydrocarbons, especially in clean
and/or renewable energy options. ONGC Energy Centre (OEC) has been
set-up under the aegis of the OEC Trust to work on various clean energy
Your company through ONGC Energy Centre has been implementing several
Research Projects on new and alternative sources of energy. These
Projects are in advanced stages of implementation, in collaboration
with various national and international academic, research and
industrial organizations. The projects where your company is currently
engaged in are:
a) Hydrogen Generation through Thermo-chemical Processes
b) Exploration for Uranium
c) Bioconversion of lignite to Methane
d) Bioconversion of Oil to Methane
e) Kinetic Hydro Power
f) Geothermal Energy
g) Solar Thermal Project
These apart, during 2013-14, ONGC Energy Centre has also evaluated many
new options to expand the research and technology development
activities and also to focus on optimum utilization of resources
available with ONGC. These efforts have been described in detail in the
Annexure C on Energy Conservation.
16. Human Resources
ONGC cares and values its human resource which is the bedrock of the
ONGC''s success story. To keep the employees'' morale high, your Company
extends several welfare benefits to them and their families by way of
comprehensive medical care, education, housing and social security.
During the year 2013-14, your Company implemented 30 Policy Revisions
for further welfare of its employees.
17. Human Resource Development
33,988 ONGCians (as on 31st March, 2014) dedicated themselves and
contributed their efforts towards the excellent performance of your
company. The workforce intake strategy pursued by your Company caters
to meeting the demands of maintaining a steady flow of talent, in a
business which is characterized by high risks and uncertainties,
enormous costs, fast changing level of technology, physically
challenging work environment, fluctuating product prices and growing
competition. Your Company has drawn up a scientific manpower induction
plan aligned to the business plans as well as factoring the manpower
profile of the Company. During the year, HR ensured that adequate
numbers with requisite skills-sets were inducted to meet the
requirements of the Company as well as replenish the manpower loss on
account of superannuation.
Your company believes that continuous development of its human resource
fosters engagement and drives competitive advantage. One such
initiative towards that end was the innovatively designed and highly
popular ''Business Games'', an organization-wide contest that puts to
test and further hones the managerial and business acumen of the
executives. During the year 2013-14, a total of 167 teams and 668
executives participated in the event.
Fun Team Games (FTGs) were organized for E0 and staff level employees
to inculcate MDT (Multi- disciplinary Team) concept and a spirit of
camaraderie and belongingness to the organization, which was very well
received by the participants. During the year 72 teams and 188
employees participated in FTGs. Your Company also conducted the
Assessment Development Centre (ADC) for 294 E-6 (DGM) level executives
and provided them developmental inputs. Your Company has partnered
with global HR consulting firms to create a pool of accredited mentors
in the organization. These mentors will support organization''s effort
to hone young minds to successfully respond to the emerging business
needs of your Company. As part of this Initiative, in the year 2013-14,
865 mentors were trained and 1376 Mentees were mentored and developed.
Skill up-gradation is a vital component for driving excellence through
Human Resource. ONGC has branded the spectrum of its training
activities as ''EXPONENT'', a comprehensive programme which is nurturing
the energy leaders of tomorrow. The growth of an ONGCian to an Exponent
of energy business is facilitated by the ONGC Academy, Regional
Training Institutes (RTIs), other in-house Institutes in association
with globally recognized trainers. Training Institutes of ONGC organize
training in all dimensions - Technical as well as non-technical and
Managerial that is relevant to Petroleum Industry.
During the year, ONGC training Institutes have organized various
training Programmes for skill development and enhancing the competency
level of employees for self-development and enhanced output. A total
15898 executives and 4564 non- executives were imparted appropriate
training, spanning 213304 training man-days, during 2013-14, which
includes five batches of 746 Graduate Trainees, who were imparted
induction training. In order to keep the executives abreast with the
latest advancements in cutting-edge concepts and technologies in oil
and gas exploration and production, 80 programmes were organized during
2013-14, including foreign faculty programmes. Around 296 senior level
executives were exposed to advanced programmes on Management with
overseas learning component through tie-ups with leading B-schools of
As a Global player, it is imperative to benchmark our strengths with
the world''s best. To achieve this we organize International
Certification Programs benchmarked to global standards viz. Offshore
Installation Manager (OIMs) Certification through OPITO, Project
Management Professionals (PMP) Certification from PMI, USA, CIPM from
PMA and IPMA from Switzerland. During the year 2013-14, Academy has
organized 14 OIMs Programmes in which 62 OIMs participated, 450
executives attended CIPM Programmes, 120 executives attended PMP of
PMI, USA and 50 executives attended IPMA level-D.
18. EMPLOYEE WELFARE
Your Company continues to extend welfare benefits to the employees and
their dependants by way of comprehensive medical care, education,
housing, and social security. Your Company continues to align company
policies with changing economy and business environment. Some of the
key facets of ONGC''s employee welfare model are as below:
(i) Employee Welfare Trusts
Your Company has established the following major Trusts for welfare of
- Employees Contributory Provident Fund (ECPF) Trust manages Provident
Fund accounts of employees of your Company.
- The Post Retirement Benefit Scheme(PRBS) Trust: The scheme underwent
a major transformation from defined benefit to defined contribution
during the past year. In the converted Defined Contribution Scheme, the
corpus in the individual employee account shall include employer/
employee contributions and interest thereon. The benefits under the
Scheme are dependent on corpus in the individual employee account and
accordingly, would be market determined which depends on interest rate,
- The Composite Social Security Scheme(CSSS): It provides an assured
ex-gratia payment in the event of unfortunate death or permanent
disability of an employee in service.
- Gratuity Fund Trust: This has been created to take care of payment of
gratuity as per the provisions of the Gratuity Act.
- Sahayog Trust: Your Company''s ''Sahayog Yojana'' instituted under this
Trust provides ex-gratia financial grant for sustenance, medical
assistance, treatment, rehabilitation, education, marriage of female
dependent and alleviation of any hardship or distress to secure the
welfare of the secondary workforce and their kin, who do not have
adequate means of support. Under the scheme, an amount of ? 20.6
million was disbursed by the Trust during the year.
- Extension of Benefits under the Agrani Samman Scheme to retired
employees: The Scheme aims to provide succour to the ex-employees who
separated from the service of ONGC on account of premature retirement
due to disability or medical deficiency suffered while on duty.
- Extension of Benefits under the Asha Kiran Scheme to retired
During the year, your Company launched Asha Kiran Scheme to meet the
emergency needs of the ex- employees retired prior to 01.01.2007, who
are passing through distressful situation. The scheme was launched as
per DPE guidelines by creating a corpus of 1.5% of PBT. During the
year, under this scheme financial assistance of Rs 1352 million was
provided to 12964 ex-employees.
(ii) Implementation of Govt. Directives for Priority Section
Your Company complies with the Government directives for Priority
Section of the society. The percentage of Scheduled Castes (SC) and
Scheduled Tribe (ST) employees were 15.4 % percent and 9.1% percent
respectively as on 31st March, 2014.
Your Company is fully committed for the welfare of SC and ST
communities. The following welfare activities are carried out by your
Company for their upliftment in and around its operational areas:-
- Annual Component Plan
Under Annual Component Plan for SC/ST, each year an allocation of Rs.200
million is made. Out of this, Rs.60 million is distributed amongst all
the Work centres of ONGC for taking up activities for welfare of SC/ST
Communities in and around the areas of our operations. In addition,
Rs.140 million is managed centrally, and is earmarked for Special
projects/proposals/schemes for the welfare of areas/persons belonging
to SC/ST communities The amount under component plan is utilized for
taking up various welfare measures for the welfare and uplif tment of
the needy people of SC/ST Communities. This fund is especially meant
for providing help and support in Education and Training, Community
Development and Medical and Health Care.
- Scholarship to SC/ST meritorious students for pursuing higher
professional courses at different Institutes and Universities in the
Your Company has recently enhanced scholarships for meritorious SC & ST
students from 100 to 500 for pursuing higher professional courses at
different Institutes and Universities across the country in Graduate,
Engineering, MBBS, PG courses of Geo- Sciences and MBA. The major
feature of the scheme is that the scholarships have been divided
equally for both male and female students and the allotted amount of
scholarship per student is Rs.4,000/- per month subject to the conditions
of the scheme. The annual budget for the scheme, considering its total
implementation, is Rs.76 million per annum.
19. INDUSTRIAL RELATIONS
During the year your Company maintained harmonious Industrial
Relations. Mandays loss due to internal industrial action was reported
as ''NIL'' for the year 2013-14.
Your Company has adopted pre-emptive and responsive IR policies that
resulted in signing of Long Term settlements covering the Post
Retirement Benefit Scheme, under the Defined Contribution methodology
and adoption of Group Leave Encashment Scheme of the LIC.
Implementation of the ''Fair Wage Policy'' initiated in Aug 2012, has
been steadily reported from all work- centers across the country. More
than 2500 contract labourers have been covered under the Fair Wage
Policy, while more are due to be covered shortly. The policy enjoins
the Contractors to pay 35% higher wages as compared to minimum wage.
This will also have a salutary effect on all statutory liabilities
towards various social security schemes. The policy also provides that
the contractors will obtain Group Gratuity cover and Group Insurance
cover from LIC for the labour deployed in ONGC operations.
20. Women Empowerment
Women employees constituted over 6 percent of your Company''s workforce.
During the year, programmes on women empowerment and development,
including programmes on gender sensitization were organized. Your
Company actively supported and nominated its lady employees for
participating in programmes organized by reputed agencies.
21. GRIEVANCE MANAGEMENT SYSTEM (GMS) :
Your Company provides an easily accessible mechanism to the employees
for redressal of their grievances, either through an informal channel
(open hearing day) or through a formal channel.
Public Grievance Management System
All Key Executives of your Company have designated a publicized time
slot thrice in a week to meet public representatives in order to
speedily redress their grievances.
22. IMPLEMENTATION UNDER THE RIGHT TO INFORMATION ACT
An elaborate mechanism has been set up throughout the organization to
deal with the requests received under RTI Act, 2005. Central Public
Information Officers (CPIO) have been appointed at every work centre of
the Company to redress the issues under RTI Act. 126 applications
received in March, 2013 were carried forwarded to the year 2013-14.
1743 applications were received during the year; making a total of 1869
applications. In addition, 50 first appeals were carried forward and
361 were received during the year. All the aforesaid 411 first appeals
were disposed off by the appellate authority of ONGC and orders passed
by the authority were complied within a stipulated time frame.
23. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY
Your Company makes concerted efforts to spread and promote the Official
Language. Some of the important steps taken in this regard during the
- Company has introduced Unicode Hindi software in all our of fices.
- Hindi workshops are conducted at regular intervals
- Hindi seminars and ''Kavi Gosthies'' were organized at Dehradun and
- ONGC actively contributed in publishing bilingual Petroleum
Terminology Directory, initiated by MO&PNG.
- Hindi Teaching Scheme of Govt. of India is effectively implemented
at all regional work centres.
24. IMPROVEMENT IN LIVING AND WORKING CONDITIONS
As a testimony to its commitment for a cleaner tomorrow, your Company
has undertaken the ''Green Building'' initiative for its upcoming offices
at Chennai, Dehradun, Delhi, Hyderabad, Kolkata and Mumbai.
Your Company continued in its endeavours to ensure work-life balance of
its employees. The townships at many work-centres were provided
facilities like gymnasiums and music rooms. Outbound programmes with
families were also organized at various work-centres. Plays on the
importance of ''Work-Life Balance'' were staged to create awareness
amongst the employees. In addition, cultural programmes involving
employees and their families were also conducted. Mahila Samitis and
Resident Welfare Associations (RWAs) were involved in the organization
of these cultural programs. Your
Company has an adventure wing named ONGC
Himalayan Association that organizes adventure programmes like
mountaineering, trekking, white water rafting, snow skiing, desert
Safari and Aero sports, which contributes toward morale, engagement,
team spirit, camaraderie, stress management and spirit to explore the
unknown among the employees.
ONGC continued its support for development of sports in the country in
the form of job offers & scholarships to deser ving spor tspersons.
Sponsorships to various sports associations / federations / sports
bodies to organise sports events as well as develop infra-structure
were also extended.
The welfare measures for the sportspersons which includes sponsored
trips for training / coaching stints & tournament participation both
within India & abroad, kits & liveries and playing equipment as per
norms have been provided in 23 game disciplines. There are 177 players
on the rolls and 167 players on scholarship benefitting from the
welfare measures of ONGC. The support has aided many sportspersons to
deliver elite performances and bring laurels for the Nation and the
Company. Sports achievements during the year are detailed in
Annexure-B. Such elite performances have been rewarded with cash
incentives as per Policy.
Head Sports of your company has taken charge as Secretary, Petroleum
Sports Promotion Board (PSPB), which is recognition of your company''s
immense contribution towards promotion of sport in the country.
26. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your company is fully engaged in ensuring equitable and sustainable
growth of society in and around the area of its operations besides
complying with government directives to discharge its social
responsibility as a leading Indian corporate. CSR activities are
essentially guided by project based approach in line with the
guidelines issued by the Department of Public Enterprises (DPE) and
Ministry of Corporate Affairs (MCA) of the Government of India.
Seeking to herald an inclusive business paradigm, ONGC has CSR
interventions that are based on social, environmental, and economic
considerations and are well-integrated into the decision-making
structures and processes of the organization. In the last 7 years, your
company has contributed Rs.13,270 Million towards its well-structured and
well-focussed CSR activities.
Out of the CSR Budget of Rs.4185 million, ONGC spent an amount of Rs.3413
million in FY 2013-14. This translates to overall utilization of 86 %
of the CSR Budget.
Reason for non-utilization of full CSR budget:
One of the major CSR & Sustainability Development projects undertaken
during the year was setting up of 102 MW Wind Power Plant in Jaisalmer
District (a back ward district of Rajasthan). The scheduled work on
this project during the period 2013-14 was delayed because of the
issues related to land acquisition at the site. As a result,
expenditure towards activities completed in April''14, which were
originally planned for 2013-14 amounting to Rs.1247 million was released
in May, 2014. Had the activities been completed as per schedule, ONGC
would have exceeded the target amount
CSR efforts are primarily focused on protection of environment;
providing infrastructure support in our operational areas, water
management, women empowerment, initiatives for physically and mentally
challenged people, protection and preservation of our heritage, arts
and culture, promotion of sports, entrepreneurship building and
sponsorship of seminars, conferences and workshops.
During 2013-14, some of the landmark CSR initiatives undertaken by your
(i) Assam Medical College, Dibrugarh:
Support of Rs.70 million has been provided to establish Catheterization
Laboratory and facilities for open Heart Surgery in Assam Medical
College, Dibrugarh for providing quality health services.
(ii) Community Hospital in Lakhimpur-Kheri, Uttar Pradesh:
The project is unique in terms of using the PPP model in CSR with full
Capex of Rs.45 million contribution by ONGC and Opex borne by the
Operating Partner. This 26 bedded Community Hospital would cater to
Primary and Secondary Health Service Requirements from BPL,
Economically Backward Class families. Healthcare services are being
provided at 50% less cost than the existing CGHS rates.
(iii) King George Hospital, Vizag:
The CSR Initiative involving financial support of Rs.150 million from
ONGC aims to construct new 2 9 storied building, medical infrastructure
and equipment to enable the Hospital to deliver quality health services
to poor patients and also strengthen the present Oncology Department to
make cancer treatment a reality.
(iv) District Government Hospital, Chikkaballapur, Karnataka:
A support of Rs. 18 million by ONGC has been provided for upgradation of
facilities in the Hospital to improve the general healthcare services
at the government Hospital which is the primary source of healthcare
for people belonging to the most economically deprived sections of the
(v) Government General Hospital (GGH), Kakinada:
ONGC has given financial assistance of Rs. 19 million to construct a
separate building for blood bank and to equip the hospital with
additional equipment for blood bank, general surgery and general
medicine departments. This will immensely benefit people of East
Godavari District where ONGC has a substantial operational presence.
(vi) ONGC Mission Ujala:
The project envisages eye screening of 50,000 children in Government
Schools in NCR under National Blindness Control Programme of Govt. of
India in collaboration with reputed NGO PRAANI. Provisions of
spectacles to 3,000 children detected with refractive errors along with
medicines were provided under this project in FY 2013-14.
(b) Education & Vocational courses:
i) Shirdi Sai Baba School in Mahoba, UP:
ONGC has joined hands with Shirdi Sai Baba Temple Society for
construction and setting up of school for providing absolutely free
education with food, clothing, study material and healthcare to under-
privileged children in the backward region of Mahoba District under CSR
initiative. Out of total estimated cost of Rs. 21 million, a part funding
of Rs. 9.5 million has been extended by ONGC.
ii) ONGC- The Akshaya Patra Foundation:
A centralized fully automated mechanized kitchen with a capacity to
provide mid-day meals to two lakh school going children (enrolled in
Govt. schools) per day in the District of Surat is being set up.
Presently 75,000 students are being fed from an interim kitchen.
iii) English medium residential school in Patna, Bihar:
ONGC in association with Soshit Seva Sangh has undertaken a CSR
initiative for supporting construction of free English medium
residential school in Patna, Bihar for the poor Mushahar community
which is one of the most deprived communities with estimated population
of approx. 4 million. Out of total estimated cost of Rs. 120 million,
part funding of Rs. 5 million has been extended by ONGC. With wider
objective of resolving interlinked problems of poverty, unemployment,
social injustice, crime and naxalism by means of providing inclusive
and affordable education; the project is one of the key initiatives of
ONGC in the education sector.
iv) Community School at Sitapur, Uttar Pradesh:
The project is unique in terms of using the PPP model in CSR with full
Capex of Rs. 27 million contribution by ONGC and Opex borne by the
Operating Partner- Shanti Devi Memorial Charitable Trust.
(c) Projects for Physically and Mentally challenged
i) Aids & Appliances to the physically challenged:
This flagship Project was undertaken with financial implication of Rs.250
million which covered 45,000 beneficiaries from 39 ONGC operational
area Districts and 61 Backward Districts in Phase-1 in collaboration
with Artificial Limbs Manufacturing Corporation of India (ALIMCO) to
cater to the needs of Orthopedic, hearing and visually challenged
people by providing suitable Aids and Appliances.
ii) ONGC Centre for vocational rehabilitation for the differently
A financial support of Rs.13 million has been provided to Tamana School
of Hope , Vasant Vihar , New Delhi for setting up of Autism Centre and
provide vocational training for the mentally challenged young adults
and children working for their economic rehabilitation by teaching
relevant vocational skills to them.
(d) Self help and livelihood generation schemes:
i) Mokshagundam Visvesvaraya Centre for training
Master Trainers in Skill Development (MVCTMTSD):
Society for Bharat Ratna Sir M Visvesvaraya National Training Facility
for Skills for All (BMV NTFSA) in association with ONGC and other
partnering agencies such as Government of Karnataka, Government of
India, GAIL, JSW, BEML, Volvo, BOSCH, L&T, Nationalised Banks has
undertaken to set up Mokshagundam Visvesvaraya Centre for training
Master Trainers in Skill Development (MVCTMTSD). The main objective of
the programme is to create Master Trainers in India and to scale-up the
skill of the technician workforce in the country. Nearly 27,000 Master
Trainers are expected to be trained in the next 10 years.
ii) Apparel training programme in Chhindwara ( MP):
This project in association with Apparel Training & Design Centre
(ATDC), Gurgaon, aims to train 180 boys and girls of poor families
located in tribal areas of Chhindwara district, M.P, to conduct Six
Diploma/ Certified training courses, which shall be sponsored by ONGC
at a cost of Rs.5 million. The project guarantees at least 70%
iii) Training on agricultural sector and animal husbandry:
Under this project started in October 2013 in association with Shrimad
Dayanand Vedarsh Mahavidyalaya Trust, New Delhi, one tractor with
accessories along with hybrid/ disease resistant seeds, different
manures and fertilizers was procured with the grant provided by ONGC.
Presently the students of Gurukul are undergoing training as well as
education in modern practices of agriculture and animal husbandry at
iv) Auto Loans in Chikkaballapur, Karnataka:
The project envisages distribution of auto loans to 200 poor and needy
beneficiaries; 100 each from Chikkaballapur and Bangalore (Rural)
districts of Karnataka. The loan is distributed through Canara Bank.
ONGC has provided financial assistance of Rs. 6 million towards margin
money @15% for these loans. The project would be of immense help for
the poor and needy beneficiaries to become self employed and earn
livelihood for their families.
This is a special Initiative taken up by the Ministry of Home Affairs,
Govt. of India for the educated youth of Jammu & Kashmir in association
with National Skill Development Corporation (NSDC). The project aims to
train Graduates/Post Graduates from J&K to improve their technical
knowledge and soft skills and enhance their scope for employability.
ONGC has extended support of Rs. 91 million towards the project.
(e) Development of Backward Districts:
The sustainable development project is being implemented in Jaisalmer,
a backward district in Rajasthan. Project involves setting up of 49
Wind Turbine Generators each of capacity of 2.1 MW with total capacity
of 102.9 MW in association with M/S Suzlon Energy Ltd. ONGC
contribution towards the project is Rs. 5620 million. 22 nos. of WTG have
been installed so far.
(f) Other CSR Initiatives:
i) Hortoki Water Supply Scheme: The project aims to create a
sustainable source of safe drinking water to the people of Hortoki
Village, Kolasib District, Mizoram. It will supply more than 40 lpcd of
water till 2043. ONGC has extended support of Rs. 9 million for the
ii) Rajeev Gandhi International Sports Complex, Dehradun: ONGC in
association with Govt. of Uttarakhand is working towards building a
Cricket stadium-cum-sports complex with a capacity of 30,000 people
extendable to additional seats in future, car parking, a sports
academy, a club house or Gymnasium, restaurant and other auxiliary
facilities. ONGC has extended financial support of Rs. 500 million
towards the project. The project is expected to be completed in two
iii) Dashrath Stadium at Agartala: The project aims to create an Indoor
sports complex in association with DDO Directorate of Youth Affairs.
ONGC has extended support of Rs. 243 million for the project.
iv) IIIT, Agartala: ONGC has extended support of Rs. 30 million for
setting up a new IIIT in Agartala.
v) Chief Minister''s Relief Fund: Uttarakhand: ONGC has extended support
of Rs. 20 million towards rehabilitation of flood af fected regions in
In addition to above new CSR initiatives undertaken in 2013-14, ONGC
has continued to support the major CSR interventions initiated in
previous years. Some of the continued CSR initiatives are (i)
Varisthajana Swasthya Sewa Abhiyan – provision of health care support
to elderly through Mobile Medicare Units. (ii) ONGC-GICEIT Computer
Centre- Employment related computer training to under-privileged youth
(iii) ONGC-Eastern Swamp Deer Conservation Project in Kaziranga
National Park (iv) Harit Moksha – Green cremation system to reduce wood
consumption during traditional cremations.
As a testimony to our CSR efforts, your company has won many laurels
1. Golden Peacock Award 2013 for CSR during 8th International
Conference on Corporate Social Responsibility-2014
2. ''Global CSR Excellence and Leadership Awards'' for best CSR
Practices in areas of health
3. P L Roy CSR Award on ''International Day of Older Persons'' for
support to the elderly through its CSR initiative ''Varishthajana
Swasthya Sewa Abhiyan''
4. SCOPE Meritorious Award for CSR & Responsiveness for the year
2011-12 on the occasion of Public Sector Day
Consistent with the trend in preceding years, your Company, its various
operating units and its senior management have been recipients of
various awards and recognitions. Details of such accolades are placed
at Annexure – ''B''.
28. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed that:
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures from the same;
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2014 and of the profit of the Company
for the year ended on that date;
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
(iv) The Directors have prepared the annual accounts of the Company on
a ''going concern'' basis.
29. CORPORATE GOVERNANCE
Your Company has taken structured initiatives towards Corporate
Governance and its practices are valued by various stakeholders. The
practices emanate from the need to position multi-layered checks and
balances at various levels to ensure transparency of its operations in
the decision making process.
In terms of Clause 49 of the Listing Agreement, a report on Corporate
Governance for the year ended March 31, 2014, supported by a
certificate from the Company''s Statutory Auditors confirming compliance
of conditions, forms part of this Report.
ONGC has implemented the mandatory Guidelines of Department of Public
Enterprises (DPE), Government of India, on Corporate Governance to the
maximum extent possible.
Your Company has voluntarily got its Secretarial Compliance Audit
conducted for the financial year ended 31st March, 2014 from M/s A.N.
Kukreja& Co., Company Secretaries in whole-time practice; their report
forms part of this Annual Report.
In line with global practices, your Company has made available all
information, required by investors, on the Company''s corporate website
Apart from the mandatory measures required to be implemented as a part
of Corporate Governance, ONGC has gone the extra mile in this regard
for the benefit of its stakeholders:
i. Whistle Blower Policy: A total of 27 Protected
Disclosures till date have been processed through the Whistle Blower
mechanism of ONGC which was implemented from December 01, 2009. The
policy ensures that a genuine Whistle Blower is granted due protection
from any victimization. The Policy is applicable to all employees of
the Company and has been uploaded on the intranet of the Company.
ii. MCA Voluntary Guidelines on Corporate Governance: ONGC has
implemented the voluntary guidelines on Corporate Governance issued by
Ministry of Corporate Affairs to the extent feasible and within the
competency domain of the management.
iii. Enterprise-wide Risk Management (ERM) framework: In line with the
requirements of Clause 49 (of the Listing Agreement), your Company has
developed and rolled out a comprehensive Enterprise-wide Risk
Management (ERM) Policy throughout the organization. The Audit, Ethics
& Financial Management Committee periodically reviews the risk
assessment and minimization process in ONGC.
iv. Lead Independent Director: Shri. Arun Ramanathan was the Lead
Independent Director till conclusion of his term on 19.06.2014. The
election of next Lead Independent Director shall be decided by the
v. Meeting of Independent Directors: The Independent Directors met
once during 2013-14.
30. STATUTORY DISCLOSURES
Section 274(1)(g) of the Companies Act, 1956 is not applicable to the
Government Companies. Your Directors have made necessary disclosures,
as required under various provisions of the Act and Clause 49 of the
Particulars of Employees
As per Notification No. GSR 289(E) dated March 31, 2011 issued by the
Ministry of Corporate Affairs, amending provisions of the Companies
(Particulars of Employees) Rules, 1975 issued in terms of section
217(2A) of the Companies Act, 1956, it is not necessary for Government
companies to include the particulars of employees drawing salaries of
Rs.6 million or more per annum, employed throughout the financial year
or, Rs.0.5 million per month, if employed for part of the financial year.
As your company is a Government company, the information has not been
included as a part of the Directors'' Report.
31. ENERGY CONSERVATION
The information required under section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, is annexed as Annexure – ''C''.
The Statutory Auditors of your Company are appointed by the Comptroller
& Auditor General of India (C&AG). M/s Mehra Goel & Co, M/s S Bhandari
& Co, M/s Ray & Ray, M/s Varma & Varma and M/s G D Apte & Co.,
Chartered Accountants were appointed as joint Statutory Auditors for
the financial year 2013-14. The Statutory Auditors have been paid a
remuneration of Rs.22.92 million (previous year Rs.20.21 million) towards
audit fee and certification of Corporate Governance Report. The above
fees are exclusive of applicable ser vice ta x and reimbursement of
reasonable travelling and out of pocket expenses actually incurred.
33. Auditors'' Report on the Accounts
The Comments of Comptroller & Auditor General of India (C&AG) form part
of this Report as per
Annexure-''D''. There is no qualification in the Auditors Report and
there are no supplementary comments by C&AG under section 619(4) of the
Companies Act, 1956. Notes to the Accounts referred to in the Auditors
Report are self-explanatory and therefore do not call for any further
You would be pleased to know that your Company has received Nil
comments from C&AG and Statutory Auditors for the year 2013-14. This is
the eighth year in a row that the organization has received Nil
34. COST AUDIT
Seven firms of Cost Accountants were appointed as Cost Auditors for
auditing the cost accounts of your Company for the year ended 31st
March, 2014 by the Board of Directors. The Cost Audit Report for the
year 2012-13 has been filed under XBRL mode within the due date of
Since the 20th Annual General Meeting held on 25.09.2013, Shri
Shaktikanta Das, Government Nominee Director resigned on 29.12.2013,
Shri P K Borthakur Director (Offshore) superannuated on 31.01.2014,
Shri Sudhir Vasudeva, Chairman & Managing Director superannuated on
28.02.2014. The term of Dr. D. Chandrasekharam concluded on 10.03.2014
and that of Prof Deepak Nayyar and Shri Arun Ramanathan concluded on
19.06.2014. Shri K S Jamestin, Director (HR) superannuated on
Shri T K Sengupta took over as Director (Offshore) on 01.02.2014. Shri
Dinesh Kumar Sarraf assumed charge of the post of Chairman & Managing
Director on 01.03.2014. Dr. Subhash Chandra Khuntia, Additional
Secretary & FA, Ministry of Petroleum & Natural Gas, joined the Board
as Government nominee Director on 01.05.2014. Shri Ashok Varma took
over the charge of Director (Onshore) on 19.06.2014 and Shri Desh
Deepak Misra assumed the charge of Director (HR) on 01.08.2014.
Shri P Umashankar and Shri S Ravi joined the Board on 29.11.2013 and
Shri R K Singh joined the Board on 23.05.2014 as non-official part-time
The Board places on record its deep appreciation for the excellent
contributions made by Shri Shaktikanta Das, Shri P K Borthakur, Shri
Sudhir Vasudeva, Dr. D. Chandrasekharam, Prof. Deepak Nayyar, Shri
Arun Ramanathan and Shri K S Jamestin during their tenure.
The strength of the Board of Directors of ONGC as on August 5, 2014 is
15, comprising 7 Executive Directors (Functional Directors including
CMD) and 8 Non- Executive Directors, out of which two are Government
nominees and six are Independent Directors. Ministry of Petroleum &
Natural Gas has been requested to appoint requisite number of
Independent Directors to comply with the Listing Agreement.
Your Directors are highly grateful for all the help, guidance and
support received from the Ministry of Petroleum and Natural Gas,
Ministry of Finance, DPE, MCA, MEA, and other agencies in Central and
State Governments. Your Directors acknowledge the constructive
suggestions received from Statutory Auditors and Comptroller & Auditor
General of India and are grateful for their continued support and
Your Directors thank all share-owners, business partners and members of
the ONGC Family for their faith, trust and confidence reposed in ONGC.
Your Directors wish to place on record their sincere appreciation for
the unstinting efforts and dedicated contributions put in by the
ONGCians at all levels, to ensure that the Company continues to grow
Place : New Delhi On behalf of the Board of Director
Date : 8th August 2014 (Dinesh Kumar Sarraf)
Chairman & Managing Director