The behalf of the Board of Directors of your company it is my privilege
to present before you the, 20th 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 31,2013,
together with the Auditors'' Report and Comments on theAccounts by the
Comptroller and Auditor General (CAG) of India.
The fiscal 2012-13 has been yet another year of sustained performance,
success and growth for your Company, which along with the other group
companies, excelled in its endeavours; particularly in its core
activities of Exploration and Production (E&P) of crude oil and natural
gas. Your company scaled new heights and created a world record by
drilling the well NA7-1 in KG-DWN-2004/1 block in the East Coast at a
water depth of 3,165 meters (10,385 feet); the deepest in the world.
The significant milestones achieved by your Company during the year
- Your Company accreted 84.84 Mtoe of ultimate reservesin the
domesticfields (ONGC operated); the highestin the lasttwenty two years.
- For the 8th 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. 833,090 million, the
highest-ever. The turnover of the ONGC Group atRs. 1,658,488 million
has also been the highest-ever.
- Your Company recorded a net profit of Rs. 209,257 million during
the year under review.
- During 2012-13. ONGC had to share the highest-ever under-recovery
of Rs. 494,207 million (an increase ofRs. 49,550 million over the
previous year) towards the under-recoveries of Oil Marketing Companies
(OMCs). Further, there has been increase in Cess by Rs. 42,140 million
during the year. This trend of high under-recoveries and burden of
Cess, if continued, is likely to draw down the cash reserves of the
Company and impact the exploration, production and acquisition plans of
ONGC and OVL apart from affecting the bottom line in near future.
- ONGC Videsh Limited (OVL), wholly owned subsidiary of your Company,
recorded highest-ever Net Profit ofRs. 39,291 million.
- Mangalore Refinery and Petrochemicals Limited (MRPL), a subsidiary
of your Company, recorded highest-ever thru''putof 14.40 MMT.
- Your Company received ''Excellent'' MoU performance ratingfortheyear
2011-12 with a score of 1.222; the highest since adoption of the MoU
system in 1988.
These achievements reflect your Company''s proven commitment towards
sustained growth and performance excellence. Consistently driven by
well-defined growth strategies, your company delivers and improves
performance year-on-year basis. Our performance is the benchmark of
excellence in various facets of our activities and has been well
recognized through peer-and-public evaluations.
Your Company moved up 16 positions to be ranked 155th in the 2013
Forbes Global 2000 list of world''s biggest companies and is ranked 23rd
among global oil and gas companies based on sales, profits, assets and
market value. It is my privilege to bring to your kind notice that the
''2012 EU Industrial R&D Scoreboard'' listed ONGC at the 36th position in
the list of oil and gas companies based on Research and Development
(R&D) expenditure. You will be pleased to know that ONGC is the only
company in this list from India. As per the Platts 2012 rankings, your
Company is ranked as the 31 largest listed E&P Company in the world.
As a fitting acknowledgment of your Company''s motto to ''Grow GREEN'' and
a testament of its green credentials, ONGC has been ranked at 386 by
the Newsweek Green Ranking 2012 and 15th among the energy companies,
above global energy majors like Chevron, Lukoil, ConocoPhillips,
Gazprom, Sinopec, Exxon Mobil and Petro China. Top rankers in the list
are mostly the companies from retail, IT or Banking sectors which have
minimal carbon footprints due to the inherent nature of their
During the year, your company made 22 oil and gas discoveries in
domestic fields (operated by ONGC). Out of these, 12 discoveries were
made in the new prospects whereas 10 were new pool discoveries. Nine
discoveries were made in NELP blocks and thirteen in the nomination
The 12 newdiscoveries made during the year are:
- Phulani-1 (Oil) in Assam & Assam Arakan basin,
- Vadatal-5 (Oil & Gas) in Cambay basin,
- Koravaka-1 (Oil & Gas),Bantumilli South-1 (Gas), Mukkamala-1
(Gas)and Vanadurru South-1 (Oil & Gas) in onlandKrishna- Godavari
- KGOSN041 NASA-1 (Saveri#1, Gas) in KG Offshore,
- KGD051NAA-1 (Gas) in KG deep-water offshore,
- Pandanallur-8 (Oil & Gas), Madanam-3 (Oil & Gas) and Pandanallur-7
(Gas) in onland Cauvery basin and
- MBS051NBA-A(Gas) in Western Offshore basin.
The 10 newpool discoveries made during the yearare:
- Agartala Dome-37 (Gas) in Assam &Assam-Arakan Fold belt,
- Mandapeta West-12 (Gas) in onland KG basin,
- KG-DWN-98/2-A-2 (Oil &Gas) in KG deep-water offshore,
- C-39-14 (Oil & Gas), BH-68 (Oil &Gas), D1-D-1 (Oil) in Mumbai
- Aliabet-4(Gas)inGulfof Cambay, &
- Anklav-9 (Oil), Motera-36 (Oil) and Mansa-36 (Oil) in Western
Discoveries in Bantumilli South-1 (Gas) and Vanadurru South-1 (Oil &
Gas) have strengthened the prospectivity of the area and have opened up
the entire adjoining tract for hydrocarbon exploration. Basement oil
and gas discoveries in Madanam-3 (the first hydrocarbon strike in ONGC
operated NELP blocks in Cauvery onshore Basin) and Pandanallur-8 (Oil &
Gas) discovery in Cauvery onshore Basin and BH-68 (Oil & Gas) in Mumbai
offshore has given huge impetus towards basement being a prolific play.
KG-DWN-98/2-A-2 (Oil & Gas) discovery in NELP deep-water block
KG-DWN-98/2 has given a definite positive fillip to ONGC''s efforts
towards monetizing discoveries in the Northern Discovery Area (NDA) of
this block. This is the first time that a substantial amount of oil has
been established in the block. Atthe same time, the well DWN-U-3 has
given the highest quantity of commercial gas i.e., 7 LCMD.
New pool discovery (D1-D-1) in N.B. Prasad (D-1) field has been a
significant discovery and with this, oil and gas in-place volume of the
field has increased to 149 MMT of oil and oil equivalent gas (O OEG);
making it the third largest field after Mumbai High and Neelam- Heera
fields. This discovery has already been put on production. In addition
to these discoveries, 23 more exploratory wells drilled for
delineation/ appraisal of known pays in existing fields proved to be
hydrocarbon bearing and have resulted in field growth.
Out of 14 onshore discoveries made during 2012-13, four discoveries
(Anklav-9, Motera-36, Mandapeta West-12 & Phulani-1) have already been
put on production and one discovery (Mansa-36) is under trial
production. Efforts are on for bringing the other discoveries on
production atthe earliest. One discovery in offshore sector (D1-D-1)
has also beenputon production.
Reserve accretion & RRR
Your Company accreted 265.65 million metric tonnes of oil equivalent
(MMtoe) of In-place volume of hydrocarbon in the domestic basins
(operated by ONGC). The ultimate reserves accretion of 84.84 MMtoe is
the highest in last 22 years. Total reserve accretion in domestic
basins including ONGC''s share in PSC JVs stands at 89.08 MMtoe. With a
Reserve Replacement Ratio (RRR) of 1.84 (with 3P Reserves), it was the
8th consecutive that your Company has maintained a RRR of more than
Voluntary disclosures in respect of Oil & Gas Reserves, conforming to
SPE classification 1994 and US Financial Accounting Standards Board
(FASB-69) were also made by your Company. The Ultimate Reserve
accretion during the year (84.84 MMtoe) has surpassed the record
breaking performance of previous fiscal (84.13 MMtoe).
A snapshot of ONGC''s Reserve Accretion Profile:
Ultimate Reserve (3P) accretion O OEG (in MMtoe)
Year Domestic ONGC''s share Total OVL''s Share Total
Assets in Domestic Domestic in
JVs Reserve Foreign
(1) (2) (3)=(1)
(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 83.35 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
Statement of Reserve Recognition Accounting
The concept of Reserve Recognition Accounting attempts to recognize
income at the point of discovery of reserves and seeks to demonstrate
the intrinsic strength of an organization engaged with 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
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) Resultsofoperations for Oil and Gas producing activities
e) Astandardized measure of discounted future net cash flows relating
to proved Oil and Gasreserve 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 atAnnexure-Ato this report as statement of Reserve Recognition
Oil & Gas production
It is my pleasure to inform you that during FY''13, your Company has
been the largest producer of oil and gas in the country (from its
domestic operations) contributing 69 per cent of oil and 62.28 per cent
of natural gas production.
Oil & Gas production of ONGC Group, including PSC-JVs and from overseas
Assets has been 58.71 MMtoe (against 61.18 MMtoe during FY''12). The
major reason for this relative drop in production during FY''13 is the
geopolitical situation and unrest in Sudan, South Sudan and Syria which
direclty affected production from our assets in these countries. At the
same time, natural decline in domestic fields has also been a
contributing factor to this year''s lower production figures.
Out of the total production of 30.46 MMT of crude oil, 74 percent
production came from the ONGC operated domestic fields, 14 per cent
from the overseas assets and balance 12 percent from domestic joint
ventures. As far as natural gas production is concerned majority of
production (84 per cent) came from ONGC operated domestic fields and of
the remaining, 10 per cent came from overseas assets and 6 per cent
from domestic joint ventures.
Production from overseas assets
ONGC Videsh Limited (OVL), the wholly owned subsidiary of your Company,
has eleven producing assets in eight countries - Venezuela (1), Brazil
(1), Colombia(1), Sudan (1), South Sudan (2), Syria(1), Vietnam (1),
Russia(2) andAzerbaijan (1).
Total production from these overseas assets during FY''13 has been 7.26
MMtoe of O-KDEG (Crude oil: 4.34 MMT &Gas: 2.92 BCM). 74 percent of the
production was contributed by the assets in Russia (36.5 percent),
Vietnam (29.5 percent), Sudan & South Sudan (8.3 per cent), and the
remaining 26 per centfrom the assets in Syria, Colombia, Venezuela,
The Board of your Company approved redevelopment of Western Periphery
of Mumbai High South and Integrated development of Bassein field during
the year with an investment of Rs. 41,132 million. Besides this,
pipeline replacement Phase-Ill project in the west coast was also
approved with an investment of Rs. 25,473 million.
During the year, your Company completed four major projects -
Construction of new MHN Platform, Revamping of WIN Platform, Low
pressure gas processing and compression at Rajahmundry and Additional
gas processing facility at Hazira Plant.
Overall Production and Sales Performance
Presented below are the highlights of production and sales of Crude
Oil, Natural Gas and Value Added Products (VAP):
Production Qty Sales Qty Value (Rs. in
Unit FY'' 13 FY'' 12 FY'' 13 FY'' 12 FY'' 13 FY'' 12
Oil (MMT) 26.13 26.93 23.69 23.09 533,268 507,873
Gas (BCM) 25.34 25.51 20.16 20.20 165,400 141,396
Propane 000 MT 428 463 425 461 13,440 12,741
LPG 000 MT 1,006 1,037 1,005 1,033 31,484 23,711
Naphtha 000 MT 1,534 1,557 1,520 1,557 76,804 72,167
SKO 000 MT 108 79 106 79 3,686 1,520
Others 1,589 1,850
Sub Total 825,671 761,258
Spirit 000 KL 0.56 0.43 42 30
HSD 000 KL 0.02 0.07 1 3
Others 0 0
Sub Total 43 33
Total 825,714 761,291
1. Financial Results
Despite volatile markets and sharing of highest-ever under-recoveries
of Rs. 494,207 million during the year, your Company has earned a
Profit After Tax (PAT) ofRs. 209,257 million (Rs. 251,229 million in
2011-12), down 16.70 per cent. During the year under review, your
Company registered Gross revenue ofRs. 833,090 million (Rs. 768,871
million in 2011-12), up 8.35 per cent.
- Gross Revenue : Rs.833,090 million
- Profit After Tax (PAT) : Rs.209,257 million
- Contribution to Exchequer : Rs.408,806 million
- Return on Capital Employed : 38.27%
- Debt-Equity Ratio : 0.00
- Earnings Per Share (Rs.) : 24.46
- Book Value Per Share (Rs.) : 144
(Rs. in million)
Particulars 2012-13 2011-12
Revenue from operations 833,090 768,871
Other Income 54,367 44,529
Total Revenues 887,457 813,400
Profit Before Interest Depreciation & Tax (PBIDT) 389,455 410,327
Profit Before Tax (PBT) 305,443 366,425
Profit After Tax (PAT) 209,257 251,229
Interim Dividend 76,999 66,305
Proposed Final Dividend 4,278 17,111
Tax on Dividend 13,012 13,286
Transfer to General Reserve 114,968 154,527
TOTAL 209,257 251,229
Previous year figures have been regrouped wherever necessary.
Reduction in FY 12 -13 profit as compared to FY 11-12 is primarily due
to increase in share of under recoveries (Rs. 49,550 Million),
additional Cess (Rs. 42,140 Million) and exceptional income accounted
for in FY 11-12 on account of Royalty adjustment for JV Block with M/s
Cairn in Rajasthan, partly offset by increase in gross revenue.
It would also be pertinent to mention that the stand-alone PAT of ONGC
for 2012-13 contribute more than 86% of the Group''s PAT whereas ONGC
(stand alone) accounts for just 50.2% of the Group''s revenues.
However, if the present trend of under-recoveries and Cess burden on
ONGC continues, the profitability and surplus generating capacity of
the Company would be affected adversely; thereby may have impacton
future growth of the group.
Your Company paid interim dividend ofRs. 9.00 per share (180 per cent)
in two phases (Rs. 5.00 andRs. 4.00). The Board of Directors have
recommended a final dividend ofRs. 0.50 per share (10 per cent) making
the aggregate dividend atRs. 9.50 per share (190 per cent) as compared
toRs. 9.75 per share (195 percent) paid in 2011-12. The total dividend
will absorbRs. 81,277 million, besidesRs. 13,012 million as tax on
dividend and works out to 45.06 percentof PAT against 38.49 percent in
3. Management Discussion and Analysis Report
As per the terms of Clause 49(l V) (F) of the Listing Agreement with
the Stock Exchanges, a Management Discussion and Analysis Report (MDAR)
has been included and forms part of theAnnual 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 as per the Guidance Note on Accounting for Oil & Gas
Producing Activities issued by The Institute of Chartered Accountants
of India (ICAI) 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 CompaniesAct, 1956.
I. ONGCVidesh Limited (OVL)
ONGC Videsh Limited (OVL), the wholly-owned subsidiary of your Company
for E&P activities outside India, achieved the highest-ever profit
(PAT) ofRs.39,291 Million during FY'' 13, an increase of 44.4 per cent
as compared to the PAT of Rs.27,211 Million during FY''12. OVL''s share
in production of oil and oil equivalent gas (O OEG), together with its
wholly-owned subsidiaries ONGC NileGanga B.V., ONGC Amazon Alaknanda
Limited, Imperial Energy Limited and CaraboboOneAB, was 7.260 MMtoe
during FY''13 as compared to 8.753MMote during FY'' 12. The oil
production decreased from 6.214 MMT during FY''12 to 4.341 MMT during
FY''13 primarily due to the geopolitical situation in Sudan, South Sudan
and Syria and the natural decline in different matured fields in
Sakhalin- 1, Russia, San Cristobal Project, Venezuela and BC-10,
OVL has resumed its production from Block 5A, South Sudan on April
6,2013 and from Blocks 1,2 & 4, South Sudan on April 13,2013. However,
the operations of Al Furat Project (AFPC), Syria would resume only
after improvement in geopolitical situations and softening of
sanctions. OVL Furat Project presently has participation in 32 assets
in 16 countries out of which 11 are producing assets, 5
discovered/under-development assets, 14 exploratory assets and 2
Significant highlights of OVL during FY''13 are:
i. Acquisition of Hess Corporation''s 2.7213 per cent participating
interest in the Azeri, Chirag and the Deep Water Portion of Guneshli
Fields in the Azerbaijan sector of the Caspian Sea (ACG) and 2.36 per
cent interest in the Baku-Tbilisi-Ceyhan (BTC) Pipeline was completed
on March 28,2013. The acquisition would bring about 9 per cent
additional proved reserves to the portfolio of OVL and daily oil
production of about 19,000 barrels (aboutO.9 MMT per annum.
ii. OVL has won two exploration blocks in Colombia under Colombian Bid
Round 2012 (i) Offshore block Guaoff-2 in Guajira Basin with 100
percent Participative Interest (PI) and (ii) Onshore Llanos-69 (LLA-69)
block in prolific llanos basin of Colombia was won by Mansarovar Energy
Colombia Limited (MECL); a 50:50 joint venture between OVL and Sinopec
iii. OVL discovered Oil in the first well of the onshore exploration
block CPO-5 in Colombia in which it is the Operator with 70 per cent
participating interest. The first of the two commitmentwells i.e.
Kamal-1 was spudded on October 29,2012 and drilled up to the target
depth of 10,500 feet with oil discovery. The second well is currently
under testing with encouraging results.
iv. The developmentof Lan-Do field in Block 06.1, Vietnam, where
OVLhas 45 per cent PI, has been completed and the field was putto
production on October 7,2012. The completion of Lan-Do field enhanced
the production capacity of the Block 06.1 by 0.20 BCM.
v. OVL has relinquished/ surrendered its interest from three
non-operated exploration blocks namely N-25 to 29 & N-36 in Cuba;
BM-S-74and BM-BAR-1, both in Brazil due to unsuccessful exploratory
vi. Project Carabobo-1 in Venezuela is under development and had
started early production in January 2013.
vii. OVL made an inaugural US$ bond offering in international capital
market with a duel tranche US$ 800 million Notes in April, 2013 to part
finance the ACG and BTC acquisition. The offering was well received
with the order book closing at about US$ 3 billion. The 5 year tranche
of US$ 300 million was priced at a spread of 190 basis point above the
5 year US treasury at yield of 2.574 per cent per annum and the 10 year
tranche of US$ 500 million was priced at a spread of 210 basis point
above the 10 year US treasury at yield of 3.756 per cent per annum.
This inaugural bond offering, guaranteed by the parent company ONGC,
represents the largest REG-S only issuance by an Indian issuer in the
US$ bond markets at the lowest coupon rates and has set a benchmark in
pricing by Indian issuer.
Direct Subsidiaries and Joint Ventures of OVL
i. ONGC Nile Ganga B.V. (ONGBV)
ONGBV, a subsidiary of OVL, is engaged in E&P activities in Sudan,
South Sudan, Syria, Venezuela, Brazil and Myanmar. ONGBV holds 25 per
cent Participating Interest (PI) in Greater Nile Oil Project (GNOP),
Sudan with its share of oil production of about 0.596 MMT during
2012-13. ONGBV holds 25 per cent Participating Interest (PI) in
Greater Pioneer Operating Company (GPOC), South Sudan but due to
adverse geo-political conditions, OVL could not produce any oil in
GPOC, South Sudan during FY''13.
ONGBV holds 16.66 per cent to 18.75 per cent PI in four Production
Sharing Contracts in Al Furat Project (AFPC), Syria with its share of
oil and gas production of about 0.126 MMtoe during FY'' 13. ONGBV holds
40 per cent PI in San Cristobal Project in Venezuela through its wholly
owned subsidiary ONGC Nile Ganga (San Cristobal) BVwith its share of
oil production of about 0.800 MMT during FY'' 13. ONGBV holds 15 per
cent PI in BC-10 Project in Brazil through its wholly owned subsidiary
ONGC Campos Ltdawith its share of oil and gas production of about 0.303
MMtoe during FY'' 13. ONGBV held 43.5 per cent PI in exploratory block
BM-S-74 and 25 per cent PI in exploratory block BM-BAR-1 and holds
Block BM-SEAL-4 all located in deep-water offshore, Brazil through its
wholly owned subsidiary ONGC Campos Ltda. ONGBV also holds 8.347
percent PI in South EastAsia Gas Pipeline Co. Ltd., (SEAGP) Myanmarfor
Pipeline project, through its wholly owned subsidiary ONGC Caspian E&P
ii. ONGC Narmada Limited (ONL)
ONLhas been retained for acquisition of future E&P projects in Nigeria.
iii. ONGC Amazon Alaknanda Limited (OAAL)
OAAL, a wholly-owned subsidiary of OVL, 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'' 13, OVL''s share
of oil production in MECL wasabout0.552MMT.
iv. Imperial Energy Limited (Erstwhile Jarpeno Limited)
Imperial Energy Limited (Name changed from Jarpeno Limited with effect
from April 19,2013), a wholly-owned subsidiary of OVL incorporated in
Cyprus, holds Operatorship with 100 per cent PI in Imperial Energy
having its main activities in the Tomsk region of Western Siberia,
Russia. During FY'' 13, Imperial Energy''soil production was about0.560
Carabobo One AB, a wholly-owned subsidiary of OVL incorporated in
Sweden, holds 11 per cent PI in Carabobo-1 Project, Venezuela. The
early production has already started from firstwell (CG0005) on 27th
December 2012 @ 300 bopd.
vi. ONGC (BTC) Limited
ONGC (BTC) Limited holding 2.36 per cent interest in the
Baku-Tbilisi-Ceyhan Pipeline (BTC) with effect from 28th March, 2013
owns and operates 1,768 km oil pipeline running through Azerbaijan,
Georgia and Turkey. The pipeline mainly carries crude from theACG
fields from Azerbaijan to Mediterranean Sea.
vii. ONGC Mittal Energy Limited (OMEL)
OVL along with Mittal Investments Sari (MIS) promoted OMEL, a joint
venture company incorporated in Cyprus. OVL and MIS together hold 98
per cent equity shares of OMEL in the ratio of 49.98 per cent (OVL) and
48.02 per cent (MIS) with the balance 2 per cent shares held bvSBI
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 OVL and MIS
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 FY2012-13
MRPLachieved the highest-everthru''putof 14.40 MMTanditproduced 13.4
MMTof petroleum products, the highest-ever.
MRPLexported 6.82 MMT of products against5.59 MMT in the previousyear.
- Crude sourcing: 14.2 MMT; Iran (28.8 per cent), Saudi Arabia (19.4
per cent), ADNOC (15.9 per cent), Kuwait (8.9 per cent), Mumbai High
(12.3 percent), Azeri (4.2 percent) & Spot (10.6 percent).
MRPL achieved all its MOU targets.
MRPL incurred a net loss of Rs. 7,569.10 million during FY''13 mainly on
account of reduced gross margins and foreign exchange fluctuation loss
ofRs. 5,364.9 million. Accordingly, no dividend has been declared for
In view of the continued under recoveries in retail marketing of Auto
fuels, the Company operated in a limited way, thereby keeping the under
recoveries to the minimum. The Company is in all readiness to take up
retail marketing within a short time,if the under recoveries are
Govt, has announced complete decontrol of HSD prices for bulk consumers
and MRPL has already made inroads in the bulk HSD market. In line with
the Govt, policy towards eventual decontrol of HSD in retail segment,
MRPL has taken cautious steps to set up few retail outlets in select
markets and the advertisement for the same has been released. MS prices
remain decontrolled and market determined and sales from existing
retail outlets continue to grow.
Phase III - Brownfield expansion Project & SPM
Under Phase-Ill expansion of MRPL, Hydrogen generation unit and Diesel
Hydro-Treater Unit have been commissioned along with Amine Treating
Unit and Stripped sour water units. At the same time, SBM/SPM trial run
was also undertaken. Commissioning of SRU-3 will be done after the
replacement of the gaskets. The Phase-Ill project is expected to be
complete by this year end.
6. Exemption in respect of Annual Report of Subsidiaries and
Consolidated Financial Statement
Ministry of Corporate Affairs (MCA) vide circular dated February 8,
2011 and clarification dated February 21, 2011 decided to grant a
general exemption from the applicability of Section 212 of the
Companies Act, 1956 from attaching the Balance Sheet and Profit & Loss
Account prepared regarding the financial year ending on or after March
31, 2011, in relation to subsidiaries of those companies which fulfil
various conditions including inter-alia approval of the Board of
Directors for not attaching the balance sheet and profit & loss account
of the subsidiary concerned. Your Board has accorded necessary approval
in this regard for not attaching the Balance Sheet and Profit & Loss
Account of its subsidiaries (i) ONGC Videsh Limited (OVL) and (ii)
Mangalore Refinery and Petrochemicals Ltd. (MRPL). All the conditions
mentioned in the circular are being complied with by ONGC. 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 OVL
are also available on website www.mrpl.co.inandwww.ongcvidesh.com
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
March 31,2013 of the Company and its subsidiaries form part of the
7. Joint Ventures/ Associates
i. ONGC Petro-additions Limited (OPaL)
Your Company has promoted OPaL, a Joint Venture (JV) Company, with
envisaged equity stake of 26% along with GAIL (15.5%) and GSPC (5%);
the balance equity is to be tied up from Strategic Partners / FIs /
IPO. It is a mega downstream petrochemical integrated project at Dahej
SEZ put in place for utilizing the in-house production of C2-C3 and
Naphtha from various units of ONGC. It is scheduled to be completed by
Overall Cumulative progress is 77.65 per cent as on March 31,2013.
Total cumulative expenditure as on March 31,2013 is Rs. 137,081
million. Approved project cost is Rs. 213,960 million. Debt closure
has been attained with the execution of Rupee Term Loan agreement,
forRs. 149,770 million on 29.01.2013.
ii. ONGC Mangalore Petrochemicals Limited (OMPL)
OMPLisa value-chain integration project for manufacturing Para-Xylene
and Benzene from the Aromatic streams of MRPL promoted by ONGC with an
envisaged equity participation of 46% along with MRPL (3%) with balance
equity being tied up.
Overall cumulative progress is 91.83 per cent ason March 31,2013.
Total cumulative expenditure on the project isRs. 40,170 million.
Approved project cost isRs. 57,500 million. The scheduled completion
of the project is slated for Q3 of FY 2013-14.
iii. Dahej SEZ Ltd (DSL)
It is envisioned as a multi-product SEZ at Dahej in coastal Gujarat for
setting up world-class mega infrastructure facilities which would
anchor ONGC''s upcoming C2-C3 Extraction Plant and a value-chain
integration project (OPaL).
Paid up capital: ONGC: 49.99% &GIDC: 49.99%
Envisaged equity structure: ONGC: 23%; GIDC:26%; balance equity is
being tied up.
SEZ is already operational and units in SEZ have clocked export ofRs.
8,640 million in the FY''12 and Rs. 14,200 million in FY''13. 92 per
cent of the leasable land has already been allotted and the remaining
land is expected to be leased in the next two years.
iv. ONGC Tripura PowerCompany Ltd (OTPC)
OTPC is setting up a 726.6 MW (2 X 363.3 MW) gas based Combined Cycle
Power Plant 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 give further boost to exploratory efforts in the region.
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) (24.5%); the balance is proposed to be
tied up through IPO.
The total expenditure incurred on the project till March 31, 2013 isRs.
28,353 million against approved project cost of Rs. 34,180 million.
Entire debtfor the project has been tied up with Power Finance
Corporation at a Debt: Equity ratio of 3:1.
Physical Progress: In Unit-I, unforeseen technical problems had arisen
since first full-load trial operations in early Jan 2013. The same
have been attended and the Unit-I has been restarted to commence trial
operations to achieve commercial operations by July 2013. Unit-ll
commissioning is now scheduled in August 2013.
The Palatana-Bongaigaon transmission line being implemented by NETC is
now commissioned up to Byrnihat. This would facilitate full evacuation
of power generated from Unit-I. For complete evacuation of Unit-ll
power, the Byrnihat-Bongaigaon section of the line needs to be
completed by December 2013 subject to resolution of certain issues
related to forest clearance in Assam state.
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 has proposed to set up MSEZ
to serve as site for development of necessary infrastructure to
facilitate and locate ONGC/ MRPL''s Aromatic complex being promoted by
In respect of Pipeline Corridor development, Ministry of Environment &
Forest (MoEF) clearance is awaited for construction works at Reach 2
(about 1.8 km). Pursuant to the presentation made by MSEZ to Expert
Committee of MoEF on Feb 18-19, 2013, the committee has favourably
recommended the case to MoEF.
As far as land acquisition issues at Reach 3 (about 1.5 km) is
concerned, Gazette notification has already been issued by the
Government of Karnataka; however, land price fixation is yet to be done
by the Government.
Required work for river water infrastructure has been completed. Trial
runs to MRPL and OMPL have also been conducted successfully. Facilities
are ready for supply of water. Water supply agreement is under
vi. ONGC TERI Biotech Limited (OTBL)
OTBL is a Joint Venture company of ONGC which was incorporated on March
26, 2007, in association with ''The Energy Research Institute'' (TERI)
with shareholding of 49 per cent each. Balance 2 per cent equity is
held by the Financial Institutions. The JV has been promoted for
addressing the requirement of Bioremediation of oily sludge, Microbial
Enhanced Oil Recovery, prevention ofwax deposition in tubulars and
solution for other oil field problems. The turnover of OTBL in FY''13 is
Rs. 136.61 million and Profit after Tax is Rs. 40.05 million as against
turnover of Rs. 129.96 million and Profitafter TaxisRs. 32.78 million
vii. PetronetMHB Limited (PMHBL)
PMHBL is a JV company where in ONGC (28.766%), HPCL (28.7%) and PIL
(7.898%)have equity stakes. Balance 34.57 per cent of equity is held by
leading banks. It owns and operates a multi-product pipeline to
transport MRPL''s products to hinterland of Karnataka. Throughput in
FY''13 is 2.816 MMT against 2.771 MMT during the last year. As per
audited results for the year 2012-13, the turnover and PAT of PMH BL
areRs. 834.53 million andRs. 273.09 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
around 20 per cent of the total gas demand of the country. A new LNG
terminal of 5 MMTPA capacity is under construction at Kochi and is
expected to be completed by the 2nd quarter of FY''13. The turnover of
PLL during 2012-13 is Rs.314,674 million (previous year Rs. 226,959
million) and net profit is Rs. 11,493million (previousyear Rs.
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 i 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 PHLfor
2012-13 are under finalisation.
8. Other 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. This plant will be
supplying C2-C3-C4 extracts as feedstock to OPaL. Presently, the plant
systems are under preservation and periodic inspection of static and
rotary equipment is continuing as per Preservation Plan.
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 9, 2013 at Agartalain presence of Shri ManikSarkar,
Hon''ble Chief Minister of Tripura. 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
estimated to beRs. 50,000 million. Government of Tripura will have 10
per cent equity in the venture.
c. LNG terminal
ONGC along with its consortium partners BPCL and Japanese conglomerate
Mitsui signed an MoU with the New Mangalore Port Trust (NMPT) on March
18,2013. The MoU documents the Port''s No-Objection to carry out the
feasibility studies and intention to extend all cooperation to the
consortium in this regard. The MoU was executed in presence of Hon''ble
Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily and the
erstwhile Chief Minister of Karnataka Shri Jagadish Shettar. The
consortium expects to commission the facility by 2018.
9. Alliances & Partnerships for Business Growth a MoU with Ecopetrol
ONGC signed a MoU with Ecopetrol, Ecuador for collaboration on jointly
studying the fan belt traps of the Cachar Region in India and
cooperating on studying and developing EOR and IOR technologies during
7th National Oil Companies (NOC) Forum held during May 25-27,2012 at
b Collaboration Agreements with GAIL
ONGC signed the following four agreements with GAILon July 21,2012:
1. Gas Cooperation Agreement,
2. Gas Swap Agreementfor C2-C3 Plant,
3. OPaL Shareholders'' Agreement,
4. Side Letter for polymer marketing rights for GAIL.
While the Gas Cooperation agreement bestows rights on GAIL to market
gas produced from ONGC fields on a case-by-case basis, the gas swap
agreement is of importance for C2 extraction plant at Dahej as it
facilitates swapping of domestic non-APM gas for shrinkage due to
extraction of C2 components from PLL''sLNG. The Shareholders''Agreement
spells out the ownership pattern in the OPaL project wherein ONGC and
GAIL are inter-alia sponsors and the Side Letter bestows marketing
rights on GAIL, which is running/expanding petrochemical plant at Pata
and is in the process of setting up another one in Assam, for partial
quantity of polymers produced by OPaLfacility.
c. Farm-out agreement with M/s INPEXfor block KG-DWN-2004/6
ONGC entered into a strategic partnership with M/slNPEX CORPORATION
(INPEX), Japan''s largest national oil company. ONGC signed a Farm-Out
Agreement (FOA) on November 5,2012, at New Delhi for handing over 26
per cent participating interest to M/s INPEX in the deep water
exploration Block KG-DWN-2004/6 of Krishna-Godavari Basin, which was
awarded to ONGC-led consortium under the NELP-VI licensing round. ONGC
continues to remain as the operator with 34 per cent participating
interest. The existing consortium partners GAIL (India) Limited (10%),
Gujarat State Petroleum Corporation Limited (10%), Hindustan Petroleum
Corporation Limited (10%) and Oil India Limited (10%) have given their
consent to this farm out.
10. Information Technology
ONGC has strived to be at the forefront with regard to adoption,
deployment and integration of Information Technology in the
organisation, with special reference to its needs. In a
knowledge-driven and technology-intensive industry such as oil & gas
E&P, information technology establishes the vital links across the
company''s many locations and varied workforce, essentially serving as
its operation''s lifeline. Many of the IT achievements of the Company
are regarded as benchmarks in the industry in terms of implementation
of widespread systems integration and process automation. Some of the
highlights for the FY''13 are:
Achieved over 99 per cent IT system availability.
Under IT Skill & Proficiency Development Programme through Project
Chetna, 8,100 training man-days were achieved. Lotus notes e-Mail
System was upgraded.
Optimization of ONGC domain architecture along with up-gradation of
Enterprise Active Directory Services, with new hardware and software
was also completed.
Online Complaints Portal for Corporate Vigilance was launched.
Deployment of standardized corporate version of Health Information
System (HIS) at all the locations (except at Delhi),completed.
Surveillance audit of ISO 20000 Certification for ITIL based IT
services and acquisition of ISO 27000 Certification for Infocom Data
A Point-to-Multipoint Broadband Wireless Access (BWA) Radio System
Project covering Western Onshore and Neelam Offshore completed which
resulted in adequate bandwidth availability at remote field locations.
Point-to-Multipoint Broadband Wireless Access (BWA) Radio System for
remaining sites of North East & Southern Assets of ONGC is under
An LSTK projectforthe revamping of existing Info-com Datacenter in
Chennai was completed at a cost of Rs. 20,320 million with seamless
shifting of critical operational equipment to the new center in the
same area and without any disruption to the existing services.
Project Augmentation of Communication Infrastructure of Western
Offshore on Turnkey basis completed at Mumbai.
New 8 Mbps Lease line connectivity established between 11 High and
Priyadarshini at Mumbai for Logging applications and 2 Mbps Lease line
for 24x7 Medical control rooms at Poonam Nagar Colony, Mumbai.
11. Health, Safety and Environment (HSE) accreditations
ONGC attaches the highest priority to safety, occupational health and
protection of environment in and around its working areas and affirms
strict adherence to globally recognized and industry accredited best
practices in its domain. In accordance with this commitment, ONGC has
implemented globally recognized QHSE Management System conforming to
the requirements of QHSE Certifications ISO 9001, ISO 14001 and ISO
18001 (OHSAS) atONGCfacilities.
Corporate guidelines on incident reporting, investigation and
monitoring of recommendations was developed and implemented for
maintaining uniformity throughout the organization in line with
international practices. Some of the standout features of the Company''s
exemplary HSE practices are - Regular QHSE internal audits, Fire safety
measures, regular fire and earthquake mock drills, Health Awareness
programs, water and electricity conservation, Material Safety Data
Sheets (MSDS), Personal Protective Equipment (PPE), and identification
and implementation of Environment Management Programmes (EMP) and
Occupation Health & Safety (OHS) programs as per need of the units,
near miss and Governance, Risk & Compliance (GRC) reporting.
12. Sustainability Development
The world today has only two options, either to stop generating GHGs
(Green House Gases) and stop development as a corollary or synergise
development with environment. ONGC, similar to the leading energy
majors of the world, is striving to position itself as a leading
organisation in sustainable management and is aiming to achieve
sustainable development through a holistic approach to carbon
management. Carbon Management Group synergises ONGC''s all business
activities in termsof sustainable development.
All the six Sustainability Development (SD) projects undertaken as per
the MoU with MoP&NG have been completed ahead of the schedule. All
these SD projects have been assessed by an External agency (Ramky
Enviro Engineers Ltd), which has submitted its report on April 15,
2013. As per the assessment, ONGC has achieved excellent grades in all
the six SD projects. As a part of its Sustainability Development
agenda, the following efforts have been undertaken by ONGC.
a. Water Management
Sustainable water management: Water foot printing is being implemented
at two locations (Tripura & Cauvery Assets) and anamountofRs. 0.5
million wasexpended towards water mapping during theyear.
Rainwater Harvesting Programme (RWH): The programme is being actively
undertaken in Vadodara and at Tripura Asset. Additionally, a number
ofwells have been planned for recharging ground water table in
b. Global Methane Initiative (GMI)
Global Methane Initiative (GMI) program activities have been carried as
per the ONGC-USEPA ongoing MoU. Leak survey and estimation of fugitive
emission was carried out at 13 installations across ONGC. This
initiative has helped in recovery of around 3.88 MMSCM of fugitive
methane which was added back to the production main stream.
c. Carbon Dioxide mitigation and low carbon initiatives
ONGC is in the process of finding an R&D solution to the vent C02 at
Hazira Plant with a view to mitigating emission of C02to the
d. Clean Development Mechanism (CDM)
ONGC has registered 10 CDM projects with UNFCCC (United Nations
Framework Convention on Climate Change). This is probably the highest
number of projects registered by any single entity in India. During the
year, around 1,28,000 Certified Emission Reductions (CERs) (Carbon
credits) have been issued, taking the overall CER tally to more than
1,40,000. Issuances being an annual activity after annual verification,
more issuances are in the offing as four of the registered projects
have already been successfully verified during the year under
The ten registered CDM projects with UNFCCC are:
Waste heat recovery from Process Gas Compressors (PGCs), of Mumbai High
South (offshore platform) and using the recovered heat to heat process
oil (Regn Ref No 0814).
Upgradation of Gas Turbine 1 (GT 1) and Gas Turbine 2 (GT 2) at
co-generation plant of Hazira Gas Processing Complex (HGPC) (Regn. Ref
Flare Gas Recovery project at Uran Plant( Regn. Ref No 1220) and Hazira
Plant (HGPC) (Regn. Ref No 1354)
Energy Efficiency of Amine Circulation Pumps at Hazira plant (Regn. No
51 MWwind power project at Bhuj, Gujarat.
Green Building projects at Mumbai and Dehradun Gas Flaring Reduction at
Neelam & HeeraAsset ONGC Tripura Power Company Ltd. (726 MW natural gas
based power plant)
e. Carbon footprint
Your Company has initiated an organization wide carbon footprint
activity in the year 2011-12 as a part of carbon and energy management.
The carbon footprint is ready and eight types of mitigation
possibilities have been identified, which may reduce the emission
Business Responsibility Report
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
first Business Responsibility Report-2012-13 has been drawn up and
forms part of theAnnual Re port for2012-13.
13. Internal Control System
Your Company has a well-established and efficient internal control
system and procedures. The Company has a well-defined delegation of the
financial powers to its various executives through 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 Department
commensurate with its size of operations. Audit observations are
periodically reviewed by the Audit & Ethics Committee of the Board and
necessary directions are issued whenever required.
14. Human Resources
ONGC cares and values for its human resource which is the bedrock of
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 2012-13, your Company implemented various new and
revised welfare policies for its employees.
15. Human Resource Development
32,923 ONGCians (as on March 31, 2013) dedicated themselves and
contributed their efforts towards the excellent performance of your
company. In response to the highly knowledge-driven and extremely
competitive industry that your Company operates in, it has devised an
effective and progressive workforce intake strategy that is suited well
to counter the varied complexities and uncertainties of the business
environment as well as aligned to overarching business plans of the
organization. During the year, adequate number of people with requisite
skill-sets were inducted to meet the requirements of the Company as
well as replenish the manpower losson accountof high 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 the managerial and business acumen of the executives. During the
year 2012-13, a total of 200 teams and 800 executives participated in
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, 129 teams and 516
employees participated in FTGs. Your Company also conducted the
Assessment Development Centre (ADC) for approximately 300 E-6 (DGM)
level executives and provided them developmental inputs.
During the year, Mentoring Initiative was launched in a big way in your
Company. Mentoring has been initiated for the motivation of the senior
employees as well as to provide guidance and support to the younger
employees. 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 2012-13, over 900 senior level
executives (E5 &E6) were selected and trained to be mentors for young
During the year, your Company launched a Suggestion Scheme, ESSENCE
(Employees Suggestion Scheme for Engagement, Commitment and Efficiency)
aimed at facilitating achievement of Organisational excellence by
encouraging employees to put forth suggestions for improvement in
various functional areasof the Corporation''s business and operations.
Skill up-gradation is a vital component for driving excellence through
Human Resource. Your Company has recently branded the spectrum of its
training activities as EXPONENT- a comprehensive programme which
nurtures the energy leaders of tomorrow.The program is facilitated by
the ONGC Academy, Regional Training Institutes (RTIs), other in-house
Institutes and through tie-ups with globally recognized trainers.
During the year, your Company continued its endeavour of equipping the
employees with the latest knowledge in the specialized fields of
upstream oil and gas sector by organizing training programs with the
best of faculty from both India and abroad. A total of 16,255
executives and 3,712 non-executives were imparted appropriate training,
spanning 207,447 training man-days, during2012-13.
During 2012-13, five batches of Graduate Trainees, totalling 691 in
all, were imparted induction training. In order to keep the executives
abreast of the latest advancements in cutting edge concepts and
technologies in oil and gas exploration and production, 84 programmes
were organized during 2012-13, including foreign faculty programmes.
Around 250 senior level officers were exposed to Advanced Management
Programmes with overseas learning componentthrough tie-ups with leading
B-schools of the country.
16. 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 the changing economy and business environment. Some of
the key facetsof ONGC''s Employee Welfare model are mentioned herein -
(i) Employee Welfare Trusts
Your Company has established thefollowing 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: Manages the pension
fund of employees of your company and settled 1,333 cases of withdrawal
benefits during the year
- 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. During the year, assistance to
families of deceased employees under this scheme was revised to between
Rs. 3 to 5 million. Under the Composite Social Security Scheme, 1,249
Cases were settled during the year 2012-13. Support to parent has been
extended in case of Death/ Disability - 25 per cent of the admissible
support amount shall be paid to surviving parents of the deceased
employee. The balance 75 per cent amount shall be released as per the
nominations recorded by the employee.
- 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'' 19 million
was disbursed by the Trust during the year.
- Extension of Benefits under the Agrani Samman Scheme to retired
employees: During the year, your Company relaxed the provisions of the
Agrani Samman Scheme to cover those ex-employees who separated from the
service of ONGC on accountof premature retirement due to disability or
medical deficiency suffered while on duty.
(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 15.68 percent and 8.98 percent
respectively as on 31st March, 2013.
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, every year an allocation of
Rs.200 million is made. The amount under component plan is utilised for
taking up various welfare measures for the welfare and upliftment of
the needy people of SC/ST communities. This fund is especially meant
for providing help and support in Education and Training, Community
Developments 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 isRs. 4,000/- per month subject to the
conditions of the scheme. The annual budgetforthe scheme, considering
its total implementation, isRs. 76 million per annum.
17. Industrial Relations
Your company has maintained harmonious industrial relations throughout
the Corporation. During the year, no man days were lost due to internal
industrial action. During the illegal strike of the contract labourers
in Hazira Plant, from July 18,2012 to October, 2012, operations were
continued uninterrupted and production was maintained without any
adverse effect on the Company''s performance.
Your Company has evolved cutting edge industrial relations policies in
addressing the aspirations of the contract labour deployed by
contractors performing jobs and services for ONGC. During the year,
your Company extended several benefits to its secondary workforce such
Your Company adopted the Fair Wage Policy. 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 LICforthe labour deployed in ONGC operations. The policy was
rolled out during the year with your Company facilitating the signing
of tripartite settlements between contractors and unions representing
the contract labour in the presence of Labour Authorities on July
During the year, your Company effected upward revision of the daily
wages, house rent subsidy (Rs. 1,000 to Rs. 3,000 per month) and
education support for children of contingent workers (Rs. 1,000 per
month). Besides, an ex-gratia amount of Rs. 24,000/- each year has also
been extended to the contingent workers.
18. Women Empowerment
Women employees constitute approximately 6.37 per cent 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 programmes organized by Women in Public Sector (WIPS)
and Women in Leadership Roles. Also, a new award, ''Woman Executive
of The Year'', was introduced by the Company during the year, as part of
19. Grievance Management System (GMS)
Your Company provides an easily accessible machinery to the employees
for redressal of their grievances, either through an informal channel
(open hearing day) or through a formal channel. In this regard, a new
GMS has been introduced in the Company, during the year.
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.
20. Implementation underthe Right to Information Act
An elaborate mechanism has been set up throughout the organization to
deal with the requests received under the RTI Act, 2005. Central
Assistant Public Information Officer (CAPIO) have been appointed at
every work centre to redress the issues under RTI Act. 40 applications
received in March, 2012 were carried forwarded to the year
2012-13.1,552 applications were received during the year; making a
total of 1,592 applications. In addition to 6 first appeals received in
March, 2012,320 were received during the year.
21. 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
- Introduction of new Unicode Hindi software in all the offices,
- Hindi workshops conducted at regular intervals,
- Two International Hindi seminars and ''Kavi Gosthies'' were organized
in Dehradun and Delhi,
- ONGC actively contributed in publishing bilingual Petroleum
Terminology, initiated by MoP&NG, and
- Hindi Teaching Scheme of the Government of India is effectively
implemented at all regional work centres
22. 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.. During the
year, the ''Green Building'' at Dehradun was inaugurated.
Bachelor Accommodation facilities in Nazira, Sivasagar, Jorhat, Mumbai
and renovation of existing offices, colonies and guest houses was
successfully completed at many work-centres to make the facilities more
in synchronization with present day requirements thus making the
infrastructure energy efficient. Energy supply through alternate
sources of energy - wind energy and solar panels- has been commenced in
some of the townships.
Your Company continued in its endeavours to ensure a desirable
work-life balance for its employees. The townships at many work-centres
were provided facilities like gymnasiums, music rooms etc.
The newly launched executive rejuvenation programme, called Nav-Utsah
aims at educating the senior executives on stress management, conflict
resolution, good parenting, besides Yoga, and Ayurvedic therapies. Some
outbound team- building programmes like - family events at work centres
and cultural programmes involving employees and their families - are
routinely conducted for work-life balance. MahilaSamitisand
ResidentWelfareAssociations(RWAs)playan active role in organizing these
social and cultural events.
Your Company has a dedicated adventure wing named ONGC Himalayan
Association which organizes adventure programme like mountaineering,
trekking, white water rafting, snow skiing, desert safari, aero sports,
etc. which adds towards moral engagement, team spirit, stress
management, etc., among the employees.
Your Company continues to extend support to the sportspersons under its
fold by way of extensive assistance towards training and participation
in tournaments within the country and overseas for deserving
performers. The scope for benefits to aspiring and promising
sportspersons under the scholarship scheme has been further widened
with the inclusion of games like squash, archery, ice-skating and
equestrian sports. The total number of disciplines supported by ONGC by
way ofjobs or scholarship is 23 as on date.
Your Company has also sponsored many prestigious sporting events during
the year. ONGC was the Principal Sponsor of the Indian Contingent
for the Olympic Games 2012. ONGC''s contribution for Team India was not
only restricted to the monetary support ofRs. 10 million but also the
15 ONGCians making the qualifying mark and getting selected to
represent India at this most prestigious event. Mr. Sudhir Vasudeva,
CMD, ONGC & Mr. K S Jamestin, Director-HR took over the charge as
President and Vice President respectively of All India Public Sector
Sports Promotion Board (AIPSSPB), the largest conglomerate of public
sector undertakings, in July 2012. It is a pleasure to inform you that
two more ONGCians were conferred with National Awards - Arjuna Award to
Ms. Kavita Raut (Athletics) and Ms. Aswini Ponnappa (Badminton).
Today your Company boasts for fifteen Arjuna Awardees besides one Khel
Ratna and two Padmashrees. Sports achievements during the year are
detailed in Annexure-B.
24. Corporate Social Responsibility (CSR)
ONGC''s vision of sustainable growth drives both business decisions as
well as Corporate Social Responsibility (CSR) initiatives. The 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.
The CSR effortsare primarily focused on protection of environment;
providing infrastructure support in our operation al 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, workshops etc.
During 2012-13, some of the landmark CSR initiatives undertaken by your
1. ONGC Specialist Palliative and Geriatric Care Out-patient Clinic:
Initiated in 2012-13 in association with Dean Foundation, this project
intends to help the terminally ill cancer patients in Chennai by
providing palliative care. It supports patients by comforting them and
relieving them of pain during the final stage of their life. It also
provides counselling to the patients and their families. The targeted
beneficiaries are selected by the implementing agency in association
with various Medical centres providing oncological treatment based on
their socio-economic criteria.
2. ONGC Hope Foundation: This CSR project was initiated with the
intent to Bandage the ulcers of 96 leprosy patients every day for one
year in the Village of Hope, (VOH). This is situated in the leprosy
complex, Tahirpur, adjacent to Leprosy Mission Hospital at Nandnagri in
the outskirts of Delhi.
3. ONGC The Akshaya Patra Foundation: This unique CSR initiative aims
at setting up of 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, Gujarat.
The Kitchen has already started feeding about75,000 students from an
interim kitchen. Itwill become operational in phases and intends to
reach its full capacity of two lakh children per day within two years.
4. Aantyodaya Prakalp: The project implemented through Bhartiya
Kushtha Niwarak Sangh (BKNS) andAdivasi Development Initiative (ADI)
aims to undertake eradication of malnutrition, especially among
children. Itwill conduct sick cell disease detection, counseling and
prevention, with appropriate treatment. Medical treatment will be
provided through a resource centre/ hospital and surgical centre. The
project will also provide education to 20 students from the tribal
populations of Western & Eastern Melghat in the Amravati District of
Maharashtra, Betul District of Madhya Pradesh and Bastar District of
5. Aids & Appliances to the physically challenged: This is a pan India
project in collaboration with Artificial Limbs Manufacturing
Corporation of India (ALIMCO). The objective is to cater the needs of
Orthopaedic, Hearing and visually challenged people by providing aids
and appliances. 750 people have already benefitted from this project in
Hazira, Gujarat and Karaikal, Puducherry in 2012-13.
6. ONGC Adharshila Entrepreneurship and Skill Development Initiative:
The CSR project initiated in 2012-13 aims at providing vocational
training for 360 students. These students are from the slums of New
Delhi. The training will be in the fields of beauty and healthcare,
cutting and tailoring, and computer education.
7. Udaan: 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
8. UTKARSH An ONGC AROH effort for Economic Upliftment of People in
Sibasagar: The project aims to create sustainable livelihood
opportunities through training and skill development. It targets
different sections and age-groups in 18 villages in ONGC operational
area in Geleki field.
9. Preservation of heritage monuments: Your Company has also dedicated
itself towards preservation of Heritage Monuments. Six monuments - Taj
Mahal at Agra, Red Fort at Delhi, Ellora & Eliphanta Caves in
Maharashtra, Golkonda Fort at Hyderabad and Shore Temple in
Mahabalipuram near Chennai - have been taken up under Clean India
Campaign of Ministry of Tourism with the help of Archaeological Survey
of India (ASI).
10. Other notable CSR Initiatives: Hortoki Water Supply Scheme (aimed
at creating a sustainable source of safe drinking water to the people
of Hortoki Village, Kolasib District, Mizoram); Assistance to St Joseph
of Annecy (India) Society, Tripura (infrastructure support for
residential hostel for tribal girls - St Joseph of Annecy (India)
Society is running a residential hostel for more than 125 Tribal girls
of Kamalpur Dhalia) and Support to Adoration Charitable Trust, Cochin
(financial assistance to Cochin to cover educational & health expenses
of 100 school children of sex workers/HIV/AIDS affected, drug users
etc.) Tailoring machines and candle mould dice were provided to
underprivileged women to provide livelihood to them.
In addition to the above new CSR initiatives undertaken in 2012-13,
ONGC continued to support the major CSR interventions initiated in
previous years. Some of the continued CSR initiatives are Varishtajana
Swasthya Sewa Abhiyan (provision of healthcare support to elderly
through Mobile Medicare units); ONGC-GICEIT Computer Centre
(Employment-related computer training to underprivileged youth); Harit
Moksha (green cremation systems to reduce wood consumption during
traditional cremations) and ONGC-Eastern Swamp Deer Conservation
Project in Kaziranga National Park.
Consistent with the trend in preceding years your Company, its various
operating units and its senior management officials have been
recipients of various awards and recognitions. Details of such
accolades are placed at Annexure - B.
26. 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 judgments 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 3151 March, 2013 and of the profit of the Com pany
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.
27. Corporate Governance
Your Company has taken structured initiatives towards Corporate
Governance and its practices are valued by the various stakeholders.
The practices evolve around multi-layered checks and balances to ensure
In terms of Clause 49 of the Listing Agreement, a report on Corporate
Governance for the year ended March 31,2013, supported by a certificate
from the Company''s StatutoryAuditors confirming compliance of
conditions, forms part of this Report.
Guidelines of Department of Public Enterprises (DPE), Government of
India, on Corporate Governance have been made mandatory from May, 2010.
ONGC has implemented the DPE guidelines to the maximum extent possible.
Your Company has voluntarily got its Secretarial
ComplianceAuditconductedforthefinancial year ended 31st March, 2013
from M/s A.N. Kukreja&Co., Company Secretaries in whole-time practice;
their reportforms 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 benefitof the stakeholders:
i. Whistle Blower Policy: A Whistle Blower Policy has been implemented
and isfunctional 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 employeesof the Company
and has been uploaded on the intranet of the Company.
ii. Annual Report on working of the Audit & Ethics Committee: With a
view to apprise the Board of the working of the Audit & Ethics
Committee annual report on the working of the Audit & Ethics Committee
for FY''12 and FY''13 are under finalisation.
iii. 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.
iv. Enterprise-wide Risk Management (ERM) framework: Inline with the
requirements of Clause 49 (of the Listing Agreement) your Company has
developed a comprehensive Enterprise-wide Risk Management (ERM)
framework. Under the framework Risk Register portfolio has been
compiled and an ERM Policy has been firmed up. The Risk Register and
the Risk Management policy of ONGC has been reviewed by the Audit and
Ethics Committee and approved by the Board of Directors. The ERM
framework has been rolled throughout the organization and the risk
policy adopted by the company is being displayed at all the
Assets/Basins/Plants/lnstitutes across all the locations of ONGC. The
risk policy of ONGC is stated below:
ONGC shall identify the possible risks associated with its business
and commits itself to put in place a Risk Management Framework to
address the risks involved on an ongoing basis to ensure achievement of
the business objectives without any interruptions.
ONGC shall optimize the risks involved by managing their exposure and
bringing them in line with the acceptable risk appetite of the
The risk reporting structure has already been putin place and all the
stake holders are being trained to enumerate risks in their functional
area. The Risk Management Cell is receiving reports from the various
functional areas. The Risk Management Committee is reviewing the same
on a periodical basis.
v. Board Charter: In line with the requirements of mandatory
Guidelines of Department of Public Enterprises (DPE), Government of
India, on Corporate Governance a detailed charter of the Board has been
firmed up. The same has been finalised by the Independent Directors and
will be implemented shortly.
vi. Evaluation of Performance of the Board: A draft policy on
evaluation of performance of the Board / Committees / Independent
Directors is being drawn up.
vii. Lead Independent Director: Mr. Arun Ramanathan has been elected as
the Lead Independent Director.
viii. Meeting of Independent Directors: The Independent Directors met
three times during the FY 2012-13.
28. 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 provisionsoftheAct and Clause 49 of the
Particulars of Employees
As per Notification No. GSR289(E) dated March 31,2011 issued by the
Ministry of Corporate Affairs, amending the provisionsof 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
ofRs. 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 being a Governmentcompany, the
information has not been included as a part of the Directors'' Report.
29. 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/sVarma&Varmaand M/sG DApte&Co.,
Chartered Accountants were appointed as joint Statutory Auditors for
the financial year 2012-13. The Statutory Auditors have been paid a
remuneration ofRs. 20.21 million (previous yearRs. 16.20 million)
towards audit fee and certification of Corporate Governance Report.The
above fees are exclusive of applicable service tax and reimbursement of
reasonable travelling and out of pocket expenses actually incurred.
31. Auditors''Reporton 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 CompaniesAct, 1956. Notes to the Accounts
referred to in the Auditors Report are self-explanatory and therefore
do not call for any further comments.
You would be pleased to know that your Company has received Nil
comments from C&AG and Statutory Auditors for the year 2012-13. This is
the seventh time in a row that the organization has received Nil
Pursuant to the directions of the Central Government for audit of Cost
Accounts, the proposal for appointment of 7 firms of Cost Accountants
as CostAuditors for auditing the cost accounts of your Company for the
year ended 31st March, 2013 was approved by the Central Government and
they have accordingly been appointed. The CostAudit Report for the year
2011-12 has been filed underXBRLmodeforthefirsttimeon January 15,2013
i.e. within the due date of filing.
During the year under report, Shri A K Hazarika, ex-Director (Onshore)
superannuated on September 30,2012. Shri PK Borthakur was appointed as
Director (Offshore) on October 30,2012. Shri Shashi Shanker assumed
charge as Director (T&FS) on December 01,2012 in place of Shri U N Bose
who superannuated on November 30,2012. Smt. Sushama Nath resigned from
the Board with effect from January 21,2013. Shri K NarasimhaMurthywas
appointed as Non-official part-time Director (Independent Director) on
March 21,2013. Shri N K Verma tookover as Director (Exploration) on
April 01,2013 in placeof Shri SV Rao who super annuated on March
The Board places on record its deep appreciation for the excellent
contributions made by Shri A K Hazarika, Shri U N Bose, Smt. Sushama
Nath and Shri S V Rao.
The strength of the Board of Directors of ONGC as on AugustOI, 2013 is
14, comprising 6 Executive Directors (Functional Directors including
CMD) and 8 Non-Executive Directors, two Government nominees and six
Independent Directors. Ministry of Petroleum & Natural Gas has been
requested to appointrequisite number of independent Directors to comply
with the Listing Agreement.
Pursuant to the provisions of Section 255 and 256 of the CompaniesAct,
1956 and Clause 104(l) of the Articles of Association of the Company,
Dr. D Chandrasekharam and Shri K S Jamestin retire by rotation atthe
20th Annual General Meeting (AGM) and being eligible, offer themselves
Shri P K Borthakur, Shri Shashi Shanker, Shri K Narasimha Murthy and
Shri N K Verma who were appointed as Additional Directors after the
last AGM, hold office up to the 20th AGM. The Company has received
notice in writing from a member pursuant to the provisions of Section
257 of the CompaniesAct, 1956, proposing their candidature for
appointment as Directors of the Company liable to retire by rotation.
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
On behalf of the Board of Directors
Chairman and Managing Director
Place: New Delhi