Oil & Natural Gas Corpn Ltd
Directors Reports
Dear Shareholders,
The Board of Directors of your Company (ONGC) are pleased to share with
you the highlights, developments and the progress that your Company has made during the
financial year ended 31.03.2019 and to present the 26th Annual Report
on the business and operations of the Company and its Audited Statements of Accounts
together with the Auditors' Report and Comments on the Accounts by the Comptroller
and Auditor General (CAG) of India.
The business environment was again marked by great uncertainty in
FY'19. Disruptive socio-economic and political changes continued to affect growth in
many parts of the world. In the emerging markets, economic volatility worsened as growth
rates slowed and currencies weakened. In the developed markets, deflationary pressures and
soft consumer demand resulted in a continuous challenging trading environment. In the face
of such uncertainty, it was more important than ever to stay on course and remain loyal to
our strategy, driving short-term performance while ensuring we made the right decisions to
deliver our long-term goals.
We are pleased to share that, despite the uncertainty, your Company
along with its group companies have registered yet another year of sustained performance.
Exploration and production, our core business, set various milestones during the year.
Besides that, performance in the areas where ONGC has engaged substantially also witnessed
success with positive contributions.
During FY'19, on account of exploratory efforts, 137.05 Million
Metric tonnes (MMt) of Oil and Oil Equivalent Gas (O+OEG) accretion to In-place
Hydrocarbons (3P) from ONGC-operated areas in India has been realized.
95.42 MMt of O+OEG In-place volume (about 69.6 percent of Total
In-place) have been accreted from New Discoveries and Delineation/Appraisal efforts. 41.63
MMt of O+OEG In-place volume (about 30.4 percent of Total In-place) have been accreted as
an outcome of data generated through other exploratory efforts.
During the year, the Estimated Ultimate Recovery (EUR) accretion in 2P
category from ONGC operated areas in India has been 63.02 MMt of O+OEG.
Accretion from JV non-operated areas in India has been 20.25 MMt
(O+OEG) in In-place Volume and 11.45 MMt (O+OEG) in EUR.
Domestic crude oil and natural gas production of ONGC along with its
share in the domestic joint ventures (PSC-JVs) during FY'19 has been 50.04 million
metric tonnes of oil and oil equivalent gas (MMtoe) which has been almost at the same
level as during FY'18.
All joint ventures of your Company established for value- chain
integration i.e. ONGC Petroadditions Ltd (OPaL), ONGC Mangalore Petrochemicals Ltd.
(OMPL), ONGC Tripura Power Company Ltd (OTPC), Dahej SEZ Ltd (DSEZ), Mangalore SEZ Ltd.
(MSEZ) and ONGC Teri Biotech Limited (OTBL) contributed meaningfully towards sustained
endeavors of your Company for growth.
1. Major Highlights: FY'2018-19
The significant milestones achieved by your Company during
FY'2018-19:
a) ONGC's standalone O+OEG production during 2018-19 was 45.86
MMtoe, an increase of 0.2% w.r.t. 2017-18 (45.79 MMtoe).
b) Natural gas production during 2018-19 was 24.75 BCM which was 5.4%
more than the production during 2017-18.
c) ONGC's gas production recorded an all-time high of 71 MMSCMD in
November 2018 mainly due to ramping up of production from Daman in Western offshore,
S1-Vashistha in Eastern offshore and Tripura in Onshore.
d) Production of Value Added Products (VAP) increased by 7.56% (3,641
KT 2018-19 against 3,385 KT in 2017-18).
e) 516 wells drilled during 2018-19 as compared to 503 in the year
2017-18; an increase of ~ 3 % (y-o-y basis).Drilled more than 500 wells in last three
consecutive years.
f) Drilled 411 development wells (including side tracks); the highest
in the history of the Company.
g) Total 17 discoveries monetized during 2018-19 including 5
discoveries (3 pool and 2 Prospect) made during 2018-19 and remaining 12 from previous
years.
h) Two New Basins i.e. Vindhyan and Bengal Basins were upgraded to
Category II from Category III.
i) Hon'ble Prime Minister dedicated ONGC's deep water
S1-Vasishta Development Project to the nation on 10th February 2019 at Guntur
in Andhra Pradesh.
j) C2-C3 Plant, Dahej processed 5.095 million tonnes of LNG in 2018-19
against plant capacity of 5 million and produced ~ 900 KT of total annual VAP.
k) Revenue from operations was at र 1,096,546 million against
र 850,041 million in FY'18.
l) Net profit (PAT) was at र 267,158 million against र
199,453 million during FY'18.
2. Global Recognitions
Your Company has been ranked number one E&P Company in the world by
Platts Top 250 Global Energy Company Rankings-2018 and 21st among global energy
majors based on assets, revenues, profits and return on invested capital. The leading
international business journal Forbes in its 2019 list has ranked the Company 3rd
largest in India and 220th worldwide based on sales, profit, assets and market
value.
ONGC has been ranked 197 in the coveted Fortune Global 500 list 2018.
3. Details of new discoveries
Your Company recorded thirteen new discoveries (six New Prospects and
seven New Pools) during the year. Out of six new prospect discoveries, five were in
on-land and one in offshore. Three on-land and four offshore pool discoveries were also
established during the year.
Details of new discoveries
Sr. No. |
Wells |
Basin/ Acreage |
HC Type |
Prospect/ Pool |
Nomination/ NELP |
1 |
KG982NA-M-6 (AE) |
KG Offshore (DW) / KG-DWN-98/2 |
Oil & Gas |
Pool |
NELP |
2 |
Babejia-2 (BJAB) |
Assam Shelf Basin / Golaghat Extn-IIA ML |
Oil & Gas |
Pool |
Nomination |
3 |
Rokhia-75 (ROBE) |
AAFB-Tripura/ Konaban ML |
Gas |
Pool |
Nomination |
4 |
GS-29-AM Shift |
KG Offshore SW/ GS-29 Extn PML |
Oil |
Pool |
Nomination |
5 |
Baramura-31 (BMDI) |
AAFB-Tripura / Baramura Extn-IV PML |
Gas |
Pool |
Nomination |
6 |
Asokenagar-1 (Asokenagar-A) |
Bengal Onland/ WB-ONN-2005/4 |
Gas |
Prospect |
NELP |
7 |
Bantumilli North -2 (BTN-AB) |
KG Onland/ Malleswaram PML |
Oil & Gas |
Prospect |
Nomination |
8 |
GKS091NFA#1 |
Kutch Offshore SW |
Gas |
Pool |
NELP |
9 |
Hatta-2 (B-HAT-B) |
Vindhyan |
Oil & Gas |
Prospect |
NELP |
10 |
Jantapathar#1Z |
Golaghat Extn-IIA (Addl.) ML, A&AA Basin |
Gas |
Prospect |
Nomination |
11 |
B-203#2 |
NWMH Extn. PML, Western Offshore Basin |
Oil & Gas |
Prospect |
Nomination |
12 |
Suryaraopeta West-1 (SUW-AA) |
KG Onland/ Malleswaram PML |
Oil & Gas |
Prospect |
Nomination |
13 |
KGD982NA-P1-S-1 |
KG-DWN-98/2 block (Cluster-II |
Gas |
Pool |
NELP |
Total 17 discoveries have been monetized during 2018-19, including 5
discoveries (3 pool and 2 Prospect) made during 2018-19, which are in nomination blocks,
and remaining 12 from the previous years.
During the year, Reserve Replacement Ratio (RRR) of your Company from
domestic fields were 1.41 and 1.78 with respect to 2P and 1P reserves respectively. With
this, your Company has achieved Reserve Replacement Ratio (2P) of more than one for 13th
consecutive years.
4. Acquisition of E&P Blocks
Your Company has been awarded five Blocks including operatorship in two
blocks,under Round-1 of Open Acreage License Policy (OALP).
5. Reserve Position as on 01.04.2019 and Reserve Accretion
ONGC migrated to PRMS (Petroleum Resource Management System) as on
01.04.2019 from the earlier SPE (Society of Petroleum Engineers) Accretion of In-place
hydrocarbons and EUR (Estimated Ultimate Recovery) by the Company in its operated areas
and in Non-Operated areas (JV Share) during 2018-19 and position of In-place hydrocarbons
and EUR (Estimated Ultimate Recovery) as on 01.04.2019 are furnished as below:
In-place Hydrocarbon volumes and Ultimate Reserves of Company operated
and JV (Domestic) Fields
Accretion during the year 2018-19 |
|
|
Position as on 01.04.2019 |
Reserve Type |
|
Domestic (Operated) |
JV-Domestic (ONGC Share) |
Total |
Domestic (Operated) |
JV-Domestic (ONGC Share) |
Total |
In-place Hydrocarbon |
2P |
136.69 |
26.72 |
163.41 |
7796.54 |
951.84 |
8748.39 |
MMt (O+OEG) |
3P |
137.05 |
20.25 |
157.3 |
8977.35 |
1025.28 |
10002.63 |
Ultimate Reserves MMt (O+OEG) |
2P |
63.02 |
11.45 |
74.47 |
2891 |
117.94 |
3008.93 |
|
3P |
39.14 |
11.25 |
50.39 |
3133.3 |
118.29 |
3251.6 |
Note: EUR position as on 01.04.2019 (EUR=Cumulative Production +
Reserves + Contingent Resources).
As per PRMS, existing remaining recoverable has been classified as
Reserves and Contingent Resources. For better understanding of earlier and existing
system, Reserves positions as on 01.04.2019 in both the reporting system i.e., earlier SPE
and newly adopted PRMS are given below. In future, the Company will report its Reserves in
PRMS format only.
|
Position of Reserves as on
01.04.2019 |
|
|
MMt (O+OEG) Total |
|
|
As per earlier SPE system |
|
Category |
Domestic (Operated) |
JV-Domestic (ONGC Share) |
Total |
2P |
1154.93 |
22.58 |
1177.52 |
3P |
1397.23 |
22.94 |
1420.18 |
|
Position of Reserves and
Contingent Resources as on 01.04.2019 |
|
|
MMt (O+OEG) Total |
|
|
|
As per PRMS |
|
|
As per PRMS |
Category |
Domestic (Operated) |
JV-Domestic (ONGC Share) |
Total |
Reserves |
2P |
747.67 |
22.58 |
770.26 |
MMt (O+OEG) Total |
3P |
817.52 |
22.94 |
840.46 |
Contingent Resources |
2C |
407.26 |
|
407.26 |
MMt (O+OEG) Total |
3C |
579.71 |
|
579.71 |
Contingent Resources |
2P+2C |
1154.93 |
22.58 |
1177.52 |
MMt (O+OEG) Total |
3P+3C |
1397.23 |
22.94 |
1420.18 |
The following table gives the details of reserve accretion (2P-Proved
and Probable) for the last 5 years in domestic basins as well as from overseas assets:
|
|
|
Ultimate Reserve (2P) accretion
O+OEG |
(in MMtoe) |
Year |
Domestic Assets (1) |
ONGC's share in domestic
JVs (2) |
Total Domestic (3)=(1)+(2) |
ONGC Videsh's Share in
Foreign Assets (4) |
Total (5)=(3)+(4) |
2014-15 |
61.06 |
-1.03 |
60.03 |
20.03 |
80.06 |
2015-16 |
65.58 |
0.80 |
66.38 |
-7.22 |
59.16 |
2016-17 |
64.32 |
0.22 |
64.54 |
120.28 |
184.22 |
2017-18 |
67.83 |
1.02 |
68.85 |
21.56 |
90.41 |
2018-19 |
63.02 |
11.45 |
74.47 |
- 20.95 |
53.52 |
Note: Reserve accretion reported in terms of 2P reserves
6. Drilling of Wells
The total number of wells drilled by your Company during 2018-19 has
been 516 against 503 wells drilled during 2017-18. The details are as below:
|
Wells drilled (No.) |
Type of well |
|
|
|
2017-18 |
2018-19 |
Exploratory (including shale) |
119 |
105 |
Development |
343 |
373 |
Side Tracks |
41 |
38 |
Total |
503 |
516 |
Out of these 516 wells, one exploratory and nineteen development wells
in deep-water were drilled.
7. Oil, Gas and VAP Production
Domestic crude oil and natural gas production of ONGC along with its
share in the domestic joint ventures (PSC-JVs) during FY'19 has been 50.04 million
metric tonnes of oil and oil equivalent gas (MMtoe) which has been almost at the same
level as during FY'18.
On standalone basis, ONGC's O+OEG production during 2018-19 has
been 45.86 MMtoe, an increase of 0.2 per cent (45.79 MMtoe in FY'18). On standalone
basis, crude oil production from ONGC operated fields has been
21.11 million metric tonnes (MMT) against production of 22.31 MMT
during FY'18. Natural Gas Production (on standalone basis) during FY'19 has been
24.75 BCM an increase of 5.4 per cent over the production during FY'18 (23.48
BCM).The Company has registered increase in its domestic natural gas output for third
consecutive year, mainly on account of ramping up of production from Daman in Western
offshore, S1-Vashistha in Eastern offshore and Tripura Asset in onshore.
Your Company's share in domestic Joint Ventures' production
was 3.12 MMT of crude oil (3.13 MMT in FY'18) and 1.06 BCM of natural gas (1.13 BCM
during FY'18). Combining the two, total domestic production has been 24.23 MMT of oil
and 25.81 BCM of gas. Production of Value Added Products (VAP) increased by 7.6%; from
3.39 MMT in FY'18 to 3.64 MMT during the year, with contribution from C2-C3 and
Hazira plants in Gujarat.
The C2-C3 plant processed 5.095 MMt of LNG in 2018-19 against plant
capacity of 5 MMt and produced ~ 900 KT of VAP.
Direct |
Unit |
Production Qty |
Sales Qty |
Value (र In millions) |
|
|
FY'19 |
FY'18 |
FY'19 |
FY'18 |
FY'19 |
FY'18 |
Crude Oil |
(MMT) |
24.23 |
25.43 |
22.50 |
23.67 |
775,729 |
603,899 |
Natural Gas |
(BCM) |
25.81 |
24.61 |
20.49 |
19.49 |
188,389 |
137,372 |
Value Added Products (VAP) |
|
|
|
|
|
|
Liquefied Petroleum Gas |
000 MT |
1107 |
1187 |
1109 |
1186 |
43,490 |
40,352 |
Naphtha |
000 MT |
1175 |
1176 |
1154 |
1180 |
46,861 |
38,084 |
Ethane-Propane |
000 MT |
414 |
356 |
414 |
356 |
10,063 |
7,502 |
Ethane |
000 MT |
455 |
264 |
456 |
264 |
10,109 |
7,050 |
Propane |
000 MT |
210 |
194 |
207 |
191 |
7,948 |
6,250 |
Butane |
000 MT |
114 |
103 |
115 |
103 |
4,470 |
3,423 |
Superior Kerosene Oil |
000 MT |
66 |
46 |
71 |
34 |
3,355 |
1,178 |
Others* |
000 MT |
99 |
61 |
58 |
28 |
2,585 |
692 |
Sub Total (VAP) |
000 MT |
3640 |
3387 |
3585 |
3342 |
128,881 |
104,531 |
Total |
|
|
|
|
|
1,092,999 |
845,802 |
*Others include ATF, Sulphur-P, Sulphur-C, LSHS, HSD, LDO and MTO
Production from Overseas Assets by ONGC Videsh
During the year, total Oil and Gas production from overseas assets has
been 14.833 MMtoe of O+OEG (Oil: 10.097 MMT; Gas 4.736 BCM) in comparision to 14.164 MMtoe
during FY'18; an increase of 4.7 per cent which was mainly due to incremental
production from Sakhalin-1 project, Russia; Block-06.1, Vietnam; additional production
from acquisition of 4 per cent stake in the Lower Zakum Concession project in UAE, from
resuming of production in GPOC, South Sudan and from Exploratory success in Block CPO-5,
Colombia.
Oil and Gas production of ONGC Group including contribution from
PSC-JVs and Overseas assets for FY'19 was 64.88 MMtoe (against 64.21 MMtoe in
FY'18), an increase of one percent.
8. Technology induction/up-gradation
Technology induction/ up-gradation in various areas of operations is a
continuous process in your Company to remain effective and competitive. The following
technologies were evaluated/ inducted in the year 2018-19:
a) Development of methodologies for oil to oil correlation using
compound specific isotopic analysis of biomarkers (CSIB) and Total Scanning Fluorescence
Spectrophotometry (TSF).
b) Development of methodology for estimation of thermal maturity of
organic matter through Fourier Transform Infra-Red spectroscopy (FTIR).
c) Intrepid Software for processing and interpretation of potential
field geophysics data: ground, airborne and marine surveys.
d) Nobel Gas Mass Spectrometer (NGMS): This new dating technology will
be used particularly for absolute dating of basalts which will have bearing on sub-basalt
Mesozoic hydrocarbon exploration, particularly in the Kutch-Saurashtra Basin, as well as
to understand thermo-tectonic evolution of basement rocks from different sedimentary
basins of India.
e) GCM Modelling through Landmark: Technology of making GCM through
Landmark's "Earth Modelling Module" has been inducted.
f) Technology by ESSEME: Pilot Project finalised to carry out
"Thin Bed Resolution" study in Linch area through M/s ESSEME.
g) Broadband Processing has been established in OMEGA System by
inducting Adaptive De-ghosting (AD) Technology on marine data to broaden the spectrum and
improve the resolution by removing the source and receiver end ghosts.
h) Integration of reservoir model and 3D-MEM technology: This technique
was used for optimization of hydro-fracturing in Redevelopment project of Gamij
field.jobs:
i) Profile modifications Carried out water shut off jobs using in house
chemical formulations in different fields of ONGC.
j) Several MEOR jobs in huff-n-puff mode and PDB jobs for paraffin
degradation in tubulars in Mehsana & Ankleshwar Assets were carried out. Scrapping
free period improved significantly by application of in-house developed Paraffin Degrading
Bacteria (PDB) microbial formulations in Mehsana and Ankleshwar Assets.
k) Chemical Tracer test: It was conducted for low salinity micro-pilot
in a well of Mumbai High South. The in-house developed technology is used to estimate
Remaining Oil Saturation to see the effect of Low salinity water flooding.
l) Gas Tracer: Application of in-house developed technology on Gas
Tracer has been used for better understanding of migration of flue gases in reservoir. The
technology was used for monitoring and analysis on real time basis of 26 wells.
m) Immiscible gas injection in Borholla field:Gravity assisted
Immiscible gas injection in depleted reservoir in KSU-5 sand of Borholla field has been
implemented with the objective to enhance oil production and increase recovery from a
depleted dipping reservoir. The plan envisages incremental oil of 0.34 MMt.
n) Miscible in Gandhar field: Simulation for CO2 GS-9 and
GS-11 was studied which envisaged incremental oil gain of 3.63 MMt (GS-9 Sand: ~1.7 MMt;
GS-11 Sand ~1.93 MMt) by 2042 Inj.; GS-11 with 75 (GS-9 Sand: 14 OP + 11 CO2 Inj.) new
well inputs.Sand: 23 OP + 27 CO2
o) Laboratory study of LoSalin South Heera field:The laboratory results
are encouraging and the conceptual plan is on the anvil. Simulation results for South
Heera indicate 0.33 MMT of incremental oil gain (over the period of 17 years) by 2035.
p) Gas Assisted Gravity Drainage (GAGD): A study on Gas Assisted
Gravity Drainage (GAGD) process has been carried out in Kasomarigaon field. It envisages
cumulative oil of 0.86MMm3 (with 35% recovery) by drilling new horizontal oil
producers and 2 new gas injectors. The process is envisaged to give dual benefit of
maintaining reservoir health and reducing the gas flaring.
q) Polymer flood pilot in Bechraji, a heavy oil field (average
viscosity of 270 cP) of Mehsana Asset was approved. This is the first time polymer flood
is planned in heavy oil and envisaged potential to improve recovery by 4%.
r) Redevelopment of Gamij: The existing model was updated incorporating
results of 55 new wells and integration of 3D-MEM for optimization of hydro-fracturing. A
phase-wise development is suggested along with drilling of some parametric wells across
the field to acquire high tech logs and core data to characterize sweet spots and optimize
HF strategy.
s) "Development of Shockwave Assisted Fracking Tools: Filing of
the second patent on "Shock tube tool for fracking of deep wells for oil and natural
gas" is in progress.
t) Collaborative project with IIT-Delhi on "Development of direct
hydrocarbon solid oxide fuel cell (SOFC) for utilization of low pressure gas for power
generation at remote locations" is in progress under ONGC PAN-IIT Collaborative
Research Program.
u) Collaborative project with IIT-Mumbai on "Flow Assurance of
Waxy Crudes in Pipelines" is in progress under ONGC PAN-IIT Collaborative Research
Program.
v) Collaborative project with IIT (ISM)-Dhanbad on "Development of
Nano material based particle gel system for W&GSO in carbonate reservoirs" is in
progress under ONGC PAN-IIT Collaborative Research Program.
w) i-Procalv-1: In-house developed process design
software "i-Procalv-1", which includes sizing and rating of
vertical as well as horizontal 3 phase separators including the effect of special
internals.
x) PLUNGLift: IOGPT developed software, "PLUNGLift",
which can be used to determine if the existing well parameters are sufficient to operate
the plunger. The software will also give an indicative design of plunger lift system.
y) Acquired technology for carrying out deep water riser and mooring
analysis by procuring Orcaflex software (ORCINA) and training by experts from 2H Offshore,
UK.
z) Developed software "MATCAP" for analysis of bearing
capacity of offshore shallow foundations, especially mud-mat foundation on which offshore
jackets are supported initially, till long piles are driven to permanently secure a
platform in the offshore.
9. Other Exploration Initiatives/Activities National Seismic Programme
(NSP):
ONGC has been assigned by MoPNG the responsibility to carry out 2D
seismic Acquisition, Processing & Interpretation (API) of 40,835 LKM of data in
un-appraised areas of Indian sedimentary basins. In view of revision of basin boundaries,
the volume of work assigned to ONGC was also increased to 42,211 LKM by DGH in June, 2018.
As on 31.03.2019, ONGC has acquired 32,319 LKM of seismic data (76.6 %
of total revised target of 42,211 LKM) and processed about 13,346 LKM of complete seismic
lines.
Basement Exploration: This year also, ONGC took up Basement
Exploration as a major initiative. During the year 2018-19, 25 wells were drilled for with
Basement exploration. Deliberate search of hydrocarbons in the Mesozoic sequence of Kutch
Saurashtra block of western offshore basin has led to discovery of a new hydrocarbon
bearing play in the fractured dolerite intrusives which flowed gas in substantial quantity
extending the exploration frontier around the area. Encouraging results obtained through
drilling of a number of new prospects during the year in the Padra field of Cambay Basin
and the UAS block of A&AA basin has further enhanced the scope of basement
exploration. Development initiatives taken up for exploitation of the fractured
Precambrian reservoirs in the Thirunagari and Pundi fields of Cauvery basin have been met
with expected results, encouraging sustenance of scope for basement exploration and
exploitation. Your Company has also identified 25 prospects from G&G interpretation
for basement exploration which are being finalized.
HP-HT Exploration: HP-HT (High Pressure High Temperature)
regime begins at a minimum temperature-pressure domain of 150C (300F) and 10,000 Psi
respectively. During the year 2018-19, in GS-OSN-2004/1 block of Western Offshore Basin,
exploratory HP-HT well "GSS-041-NAA#C" has been successfully drilled and tested
in Jhuran formation (Mesozoic) to be gas bearing. In KG offshore, HP-HT Well
"YS-6-2#sub" has been successfully drilled to the target depth of 5,324m without
complications and hermetically tested on March 28, 2019. The HP-HT well is being taken up
for testing. In Cauvery Basin, HP-HT well "ABAA_KKL" has been drilled to 5,500m.
After testing three objects, the well was abandoned. Further, the HP-HT well
"VNAC" in Cauvery Basin has been concluded at depth of 3,760m against the target
depth of 4,900m due to high pressure. The testing of the well is being taken up. In
A&AA Basin, three HP wells in Khubal field had been drilled and tested with result of
gas indication. Further, three HP wells in Kunjaban field have been taken up for drilling
and testing for Lower Bhuban Formation.
10. Exploration and Production from Unconventional Sources a) Coal Bed
Methane (CBM):
Currently, ONGC is operating in four CBM Blocks, i.e., Jharia, Bokaro,
North Karanpura (Jharkand) and Raniganj (West Bengal). After completion of Phase-I and II
activities, development activities of Bokaro and North Karanpura is in progress. Revised
Field Development Plans (FDP) for Jharia and Raniganj is under approval.
b) Shale Gas
During 2018-19, a total of 3 exclusive shale gas wells (NDSGA
and NGSGA in Cambay basin and WGSGA in KG Basin) were drilled and one dual
objective well NGSAA in KG Basin is presently under testing. So far, ONGC has
completed drilling of 26 wells (of which 8 are exclusive wells and 18 are dual objective
wells) in 21 blocks across four basins of Cambay, KG, Cauvery and A&AA Basins.
Attempts are continuing to establish the shale gas/oil potential in the identified blocks.
However, some indications of the presence of oil have been observed during the activation
of the zones during hydro-fracturing in wells JMSGA and GNSGB in Cambay Basin and WGSGA in
KG Basin. Presently, further activation is required in well WGSGA in KG Basin whereas well
GNSGC in Cambay Basin is awaiting hydro-fracturing.
c) Underground Coal Gasification
Due to its inability to continue with UGC project, Gujarat Industries
Power Company Limited expressed to withdraw from the Vastan UCG project. ONGC has done lot
of ground work in this project and invested a lot of resources on UCG. A memorandum has
been received from Ministry of Coal (MoC) on 31.10.2018, regarding allotment of the Vastan
block to ONGC for testing of UCG pilot. MoC has sought confirmation from ONGC under UCG
Policy terms and conditions, issued by MoC vide notification dated 26.09.2016. i.e., for
full tenure 33 years of contract in 4 phases of exploration, pilot assessment, development
and production. Allotment of Block from MoC is awaited.
d) Gas Hydrate Exploration Program
ONGC, as a NGHP Consortium Member of National Gas Hydrate Program of
GoI, has played a significant role in G&G studies for the identification of sites for
NGHP-01(2006)/ NGHP R&D Expedition-02 (2015) and successfully executed with on-board
studies of both the expeditions. The results of NGHP-02R&D Expedition are very
encouraging and producible gas hydrates have been discovered in KG deep offshore areas in
sand reservoirs which will be taken up for production testing during NGHP-03.
Presently, Gas Hydrate Research and Technology Centre (GHRTC) is
involved in R&D activities in exploration for gas hydrate prospects in Indian Deep
waters and potential exploitation methodologies for gas hydrates through in-house efforts
and PAN IIT collaborations. About eight in-house and two collaborative projects were
completed. Four collaborative projects are in progress. Potential exploitation
methodologies besides in-house studies like sand control, well bore completions and
Depressurisation techniques, various production simulation studies have been carried out
in collaboration with USA.
11. Oil & Gas Projects Projects completed in 2018-19
During the year 2018-19, ten major projects (3 development & 7
Infrastructure) costing around र 112,585.50 Million were completed.
Sl No |
Project Name |
Completion Date |
Project Cost (र In
Million) |
Oil gain (MMT) |
Gas Gain (BCM) |
1 |
Construction of 3 ETPs, Mehsana |
22.05.2018 |
881.80 |
- |
- |
2 |
Six Pipeline Project, Assam |
31.05.2018 |
1,523.20 |
- |
- |
3 |
MH North Redevelopment Phase-III |
31.05.2018 |
57,248.00 |
6.997 |
5.253 |
4 |
Development of C-26 Cluster Fields |
31.05.2018 |
20,492.60 |
0.644 |
5.94 |
5 |
Pipeline Replacement Project, Ahmedabad |
30.06.2018 |
1,470.40 |
- |
- |
6 |
Construction of one ETP at GGS-Nada, Ankleshwar |
31.07.2018 |
1,284.70 |
- |
- |
7 |
Ahmedabad Gas compressor Project |
05.09.2018 |
1,153.50 |
- |
- |
8 |
Nawagam-Koyali pipeline project |
14.09.2018 |
1,850.20 |
- |
- |
9 |
PRP IV |
31.12.2018 |
21,836.60 |
- |
- |
10 |
Redevelopment of Gamij Field, Ahmedabad |
15.02.2019 |
4,843.90 |
1.269 |
0.101 |
|
|
Total |
112,585.50 |
8.91 |
11.294 |
12. Projects approved during the year for implementation
During 2018-19 the following four Offshore Projects have been approved
for implementation-
a) Pipeline Replacement Project-V: Project was approved on
26.04.2018 with an investment of र 7,663.70 Million. Project envisages laying and
completion of 10 pipeline segments of ~60 Km under Mumbai High and Neela-Heera Assets. The
project is expected to be completed by December 2019.
b) Mumbai High South Redevelopment Phase-IV: Project was approved
on 14.02.2019 with an investment of र 36,607.10 Million. The scheme envisages
installation of WIS-R water injection process platform, pilot EOR scheme and drilling of 6
development wells and 24 side-track wells. The scheme envisages incremental gain of 2.432
MMt oil and 0.577 BCM gas from IOR inputs and 0.795 MMt oil from EOR pilot scheme by March
2035. The project is expected to be completed by April 2021.
c) Development of cluster 8 marginal field: The project was
approved on 14.02.2019 with an investment of र 22,924.60 Million. The scheme
envisages installation of 4 wellhead platforms, 3 slot clamp-on at B192-1, associated
pipelines along with drilling of 18 development wells, one well tie-back and one side
track. The scheme envisages incremental production of 4.380 MMt oil and 0.464 BCM gas by
March-2035. The project is expected to be completed by May 2021.
d) Construction of Transit storage Yard, Kakinada, EOA: The project
was approved on 26.04.2018 with an investment of र 6,380 Million. Project envisages
construction of storage yard and office at Kakinada. The project will be completed in 24
months after award of contract.
In addition, ONGC's mega offshore deep-water project in East
Coast, Cluster-2 Development of KG-DWN-98/2, is in advanced stage of implementation.
Contracts for some of the major packages such as SURF-SPS, Onshore Terminal and CPP &
LQP (Offshore Process Platform and Living Quarters) have been awarded during 2018-19.
13. ONGC Energy Strategy 2040
During the year, your Company also adopted its strategic blueprint for
the future ONGC Energy Strategy 2040. While the Board approved the document in the
first quarter of FY'20, much of the work in relation to the document was executed
during FY'19. It is an important milestone for the Company as it gears up, as the
country's foremost NOC in oil and gas, for the opportunities and challenges of the
emerging world and domestic energy order for the next couple of decades. Strategy 2040
builds on the primary ideals and objectives of Perspective Plan 2030 while remaining alive
to the evolving dynamics of an energy world that is in transition. It envisions ONGC as
"A diversified energy company with strong contribution from non E&P businesses;
3x revenues and ~5-6x market capitalization".
14. Financial Highlights:
Your Company has earned Profit After Tax (PAT) of र 267,158
million, up by 33.9% over FY'18 (र 199,453 million) and registered Revenue from
Operations of र 1,096,546 million, up by 29% over FY'18 (र 850,041
million).
Highlights Standalone Financial Statements
Revenue from Operations: र 1,096,546 million Profit After Tax
(PAT):र 267,158 million Contribution to Exchequer: र 518,713 million Return on
Capital Employed: 35.43% Debt-Equity Ratio: 0.11:1 Earnings/ Share: र 20.86 Book
Value/ Share: र 161
|
र in million |
Particulars |
|
|
|
2018-19 |
2017-18 |
Revenue from operations |
1,096,546 |
850,041 |
Other Income |
75,190 |
78,836 |
Total Revenue |
1,171,736 |
928,877 |
Profit Before Interest |
582,247 |
448,712 |
Depreciation, Finance Cost, & Tax Expenses |
|
|
Less: Depreciation/Amortisation/ Impairment |
157,786 |
144,702 |
Less: Finance Cost |
24,921 |
15,085 |
Profit Before Tax (PBT) |
399,540 |
288,925 |
Profit After Tax (PAT) |
267,158 |
199,453 |
Transfer to General Reserves |
154,362 |
110,290 |
Other comprehensive income arising from re-measurement of
defined benefit obligation, net income tax |
(2,946) |
(873) |
Payments of dividends |
95,952 |
77,642 |
Tax on Dividends |
16,845 |
11,521 |
Expenses relating to buyback of equity shares |
75 |
- |
Opening Balance of Retained earnings |
24,831 |
25,704 |
Balance at the end of the year |
21,809 |
24,831 |
15. Buy-back of shares
The Board of Directors of the Company, meeting held on 20.12.2018 had
approved the proposal for buy-back of equity shares upto 25,29,55,974 fully paid-up equity
shares being 1.97% of the total paid-up equity shares of the Company at the price of
र 159 per equity shares payable in cash of an aggregate consideration not exceeding
र 40,220 million. The buy-back offer worked out to 2.50% of the net-worth of the
Company as on 31.03.2017 and 2.34% as on 31.03.2018. The Company has completed the
buy-back of 25,29,55,974 fully paid-up equity shares on 22.02.2019.
Upon completion of the buy-back, the number of equity shares of the
Company reduced from 12,83,32,35,180 to 12,58,02,79,206 with corresponding reduction in
the paid-up share capital from र 64,166.17 million to र 62,901.39 million.
16. Dividend
The Board of Directors of your Company is pleased to recommend a final
dividend of र 0.75 per equity share of the face value of र 5 each (@15%),
payable to those Shareholders whose names appear in the Register of Members as on the Book
Closure / Record Date.
Your Company has paid two interim of र 5.25 per share (@105%) and
र 1.00 per share (@20%) of र 5 each.
The total dividend for the year र 88,062 million including the
proposed final dividend, besides र 18,101 million applicable Dividend Distribution
Tax (DDT) which is 39.74% of PAT (inclusive of DDT). The dividend pay-out were in
accordance with the Company's dividend distribution policy.
The Dividend Distribution policy as by the Company, may be accessed at
the web link https://www.ongcindia.com/wps/wcm/connect/en/ investors/policies.
17. Management Discussion and Analysis Report
As per the terms of regulations 34(2)(e) of the SEBI Listing
Regulations, the Management Discussion and Analysis Report (MDAR) as appended, forms part
of this Annual Report.
18. Financial Accounting
The Financial Statements have been prepared in compliance with
Indian Accounting Standards (Ind-AS) issued by the Institute of Chartered Accountants of
India (ICAI) effective from 01.04.2016 and applicable provisions of the Companies Act,
2013. There have been no material changes and commitments, which affect the financial
position of the Company, which have occurred between the end of the financial year to
which the financial statements relate and the date of this Report.
19. Loans, Guarantees or Investments
Your Company is engaged in Exploration & Production (E&P)
business which is covered under the exemption provided under Section 186(11) of the
Companies Act, 2013. Accordingly, the details of loans given, investment made or guarantee
or security given by the Company to subsidiaries and associates is not reported.
20. Details relating to deposits covered under Chapter V of the Act to
Particulars |
Amount (in र ) |
Deposits accepted during the year |
Nil |
Deposits remaining unpaid or unclaimed as at the end of the
year |
Nil |
Default in repayment of deposit or formulated payment of
interest thereon during the year |
Nil |
21. Credit Rating of Securities: Details of the Credit Rating of
Debt Securities obtained by the Company:
Sl. No. |
Particulars |
|
Details |
|
1 |
Name of Debt Security |
International Bonds issued by subsidiaries
guaranteed by the Company |
International Bonds issued by subsidiaries
guaranteed by the Company |
Commercial Paper upto र 100,000 Million
outstanding at any point of time |
2 |
Credit Rating obtained |
Long term Issuer Credit Rating Foreign
Currency Rating : Baa1 (Stable) Local Currency Rating : Baa1 Stable |
Issuer Credit Rating Foreign Currency : BBB-
(Stable) |
[ICRA]A1+, CARE A1+ |
3 |
Name of the credit rating agency |
Moody's |
S&P Global Ratings |
ICRA Limited (ICRA), CARE Ratings Limited
(CARE) |
4 |
Date on which the credit rating was obtained |
February 2005 and annual surveillance thereon
every year. |
November 2012 and annual surveillance thereon
every year. |
ICRA: 18th June, 2018 revalidated
on 17th September, 2018, 11th December, 2018 and 14th
March, 2019. |
|
|
|
|
CARE: 25th June, 2018 and
revalidated on 21st August, 2018, 27th December, 2018, 22nd
February, 2019 and 29th April, 2019. |
5 |
Revision in the credit rating |
Not Applicable |
Not Applicable |
Not Applicable |
6 |
Reasons provided by the rating agency for a
downward revision, if any. |
Not Applicable |
Not Applicable |
Not Applicable |
22. Investor Education and Protection Fund (IEPF)
Details of transfer of unclaimed dividends and eligible shares to IEPF
have been placed in the Corporate Governance Report, which forms part of the Boards'
Report.
23. Related Party Transaction
Particulars of contracts or arrangements with related parties as
referred to in Section 188(1) of the Companies Act, 2013, is provided in specified Form
AOC-2, and placed at Annexure-A.
24. Subsidiaries, Associates and Joint Ventures
The Consolidated Financial Statements for the year ended 31.03.2019 of
your Company has been prepared in accordance with Section 134 of the Companies Act, 2013,
Ind AS 103 "Business Combinations" as per Pooling of Interest Method, Ind AS 110
"Consolidated Financial Statements" and Ind AS 28 "Investments in
Associates and Joint Ventures". The audited Consolidated Financial Statements for the
year ended 31.03.2019 form part of this Annual Report.
Full Annual Reports of subsidiaries of your Company will be made
available to any shareholder upon request, the same is also available on Company's
website. Further, Annual Reports of ONGC Videsh, MRPL, HPCL and PMHBL are also available
on websites www.ongcvidesh.com; www.mrpl.co.in; www.hindustanpetroleum.com and
www.petronetmhbl.com respectively.
Financial position of subsidiaries, associates and joint venture
companies, included in consolidated financial statement provided in AOC-1 prepared under
the Companies Act, 2013 and Accounting Standards. In addition, brief details about
subsidiaries/ Associates and Joint Ventures are as under
a) ONGC Videsh Limited
ONGC Videsh, the wholly-owned subsidiary of your Company for E&P
activities outside India, has participation in 41 oil and gas projects in 20 countries,
viz. - Azerbaijan (2 projects), Bangladesh (2 Projects), Brazil (2 projects), Colombia (7
projects), Iran (1 project), Iraq (1 project), Israel (1 project), Kazakhstan (1 project),
Libya (1 project), Mozambique (1 Project), Myanmar (6 projects), Namibia (1 project), New
Zealand (1 Project), Russia (3 projects), South Sudan (2 projects), Sudan (2 projects),
Syria (2 projects), UAE (1 project), Venezuela (2 projects) and Vietnam (2 projects).
Out of these 41 projects, ONGC Videsh is the Operator in 14 projects,
Joint Operator in 7 projects and in remaining 20 projects it is non-operator. ONGC Videsh
has a combination of 15 producing, 4 discovered/under development, events in18
exploration projects and 4 pipeline projects. ONGC Videsh's share in production of
oil and oil equivalent gas (O+OEG), together with its wholly-owned subsidiaries ONGC Nile
Ganga B.V., ONGC Amazon Alaknanda Limited,Imperial Energy Limited, Carabobo One AB and
ONGC Videsh Singapore Pte. Ltd. has been 14.833 MMtoe during FY'19 as compared to
14.164 MMtoe during FY'18. The overall oil production increased from 9.353 MMt during
FY'18 to 10.097 MMt during FY'19 (an increase of 8%). Gas production has been
4.736 BCM during FY'19 against 4.811 BCM during FY'18(lower by 1.6%).
During FY'19, the Company has made consolidated Profit After Tax
of र 16,823 million attributable to owners as compared to consolidated Profit After
Tax of र 9,815 million attributable to owners during FY'18. The increase in
profit is mainly on account of higher production and higher crude oil prices.
Significant financial activities during the year
ONGC Videsh has repaid bonds of USD 300 million that matured on
07.05.2018 on due date by raising USD 150 million in short-term Foreign Currency Non
Resident/Foreign Currency Term Loan facilities from Banks and the balance USD 150 million
from internal resources.
Memorandum of Understanding (MoU)
A Cooperation Agreement was executed on 28.09.2018 between ONGC Videsh
Limited and UzbekNefteGaz to jointly explore the possibilities to assess potential
opportunities in exploration blocks, under development assets and producing fields/blocks
located within the Republic of Uzbekistan and third countries pertaining to upstream
sector, with an initial term of two years. A Joint Working Team with members from UNG and
ONGC Videsh is formed and preliminary data is under review.
area of Exploration & Significant Operation during FY'19:
A) GPOC, South Sudan: - Production from Greater Pioneer Operating
Company (GPOC), South Sudan project of ONGC Videsh has resumed after prolonged shutdown
since December 2013. On August 25, 2018, officially declared the pumping of first crude
oil from Toma South field of South Sudan to Heglig in Sudan.
B) CPO-5, Colombia:- Achieved second consecutive success in an
onshore well Indico-1X, Colombia. The well Indico-1 was spudded on 07.11.2018 and drilling
completed on 15.12.2018. During the test, the well flowed at self-flow rate of appx.
4,000 BOPD. Currently the well is under Short Term Testing with multi
bean study for further evaluation. Importantly, first success was in the well Mariposa-1,
which is located 6.5 km from Indico-1, and the continuation of same play is confirmed in
the recent well.
C) Rovuma Area-1 Project, Mozambique:-
The jointly owned marketing entity of ONGC Videsh and joint venture
partners of Mozambique Rovuma Offshore Area 1 project incorporated at Singapore, has
entered into long-term LNG Sale and Purchase Agreement (SPA) with Tokyo Gas Co. Ltd.
(Tokyo Gas) and Centrica LNG Company Ltd., a subsidiary of Centrica plc (Centrica) through
a co-purchasing agreement for sale of 2.6 million tonnes per annum (MMTPA) from the
start-up of production until the early 2040s; CNOOC Gas and Power Singapore Trading &
Marketing Pte. Ltd (CNOOC) for 1.5 MMTPA for a term of 13 years; Shell International
Trading Middle East Ltd. (Shell) for 2 MMTPA for a term of 13 years; Bharat Gas Resources
Ltd. a wholly owned subsidiary of Bharat Petroleum Corporation Ltd. for 1 MMTPA for a term
of 15 years and Pertamina, a state owned oil and gas company of Indonesia, for 1 MMTPA for
a term of 20 years.
These latest deals build upon previously executed deals for long term
off-take of LNG from Rovuma Offshore Area 1 project and take long-term sales to more than
9.5 MMTPA. With the approval of the development plan in February 2018, ongoing
resettlement implementation activities, site preparation and execution of these SPAs, the
project is poised to take FID in H1 2019.
D) Lower Zakum Concession, UAE: The first equity cargo of Das Blend
crude produced from Lower Zakum Concession, ADNOC Offshore, UAE arrived at New Mangalore
port on 08.06.2018. This equity crude of ONGC Videsh was refined at MRPL, and is another
step towards ensuring India's energy security needs.
E) Block 06.1,Vietnam: Memorandum of Understanding (MoU) was signed
on 18.04.2018 among ONGC Videsh, Rosneft, Vietnam BV (Operator) and PetroVietnam relating
to further exploration activities in Block 06.1, for exploration in deeper Clastic
prospect.
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
directly or through its subsidiaries/JVs in Sudan, South Sudan, Syria, Venezuela, Brazil
and Myanmar. ONGBV holds 25% Participating Interest (PI) in Greater Nile Oil Project
(GNOP), Sudan with its share of oil production of about 0.257 MMT during FY'19. ONGBV
also holds 25% PI in Greater Pioneer Operating Company (GPOC), South Sudan. Production
from GPOC, South Sudan resumed on 25.08.2018 after prolonged shutdown since December 2013
and produced 0.131 MMT in FY'19. ONGBV holds 16.66% to 18.75% PI in four Production
Sharing Contracts in Al Furat Project (AFPC), Syria. Due to force majeure conditions in
Syria, there was no production in AFPC project during FY'19. ONGBV holds 40% PI in
San Cristobal Project in Venezuela through its wholly owned subsidiary ONGC Nile Ganga
(San Cristobal) BV with its share of oil & oil equivalent gas production of about
0.286MMTOE during FY'19. ONGBV holds 27% PI in BC-10 Project in Brazil through its
wholly owned subsidiary ONGC Campos Ltd. with its share of oil and oil equivalent gas
production of about 0.548 MMTOE during FY'19. It 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 8.347% PI in South East Asia Gas Pipeline Co. Ltd., (SEAGP) for
onshore Pipeline project, Myanmar through its wholly owned subsidiary ONGC Caspian E&P
B.V.
ii) ONGC Narmada Limited (ONL): ONL has been retained for
acquisition of future E&P projects in Nigeria.
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'19, ONGC Videsh's share of oil and oil equivalent gas production in
MECL was about 0.444 MMtOE.
iv) Imperial Energy Limited (IEL): IEL, a wholly-owned subsidiary
of ONGC Videsh incorporated in Cyprus, has its main activities in the Tomsk region of
Western Siberia, Russia. During FY'19, Imperial Energy's oil and oil equivalent
gas production was about 0.242 MMtOE.
v) Carabobo One AB:
Carabobo One AB, a subsidiary of ONGC Videsh incorporated in Sweden,
indirectly holds 11% PI in Carabobo-1 Project, Venezuela. During FY'19, ONGC
Videsh's share of oil and oil equivalent gas production was about 0.127 MMtOE.
vi) ONGC BTC Limited: ONGC BTC Limited holds 2.36% interest in the
Baku-TbilisiCeyhan Pipeline ("BTC") which 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 Mediterranean Sea.
vii) Beas Rovuma Energy Mozambique Limited (BREML): BREML was
incorporated in British Virgin Islands (BVI) and has been migrated by continuation to
Mauritius w.e.f. 23.01.2018. ONGC Videsh holds 60% shares in BREML and the balance 40% are
held by Oil India Ltd. BREML holds 10% PI in Rovuma Area 1, Mozambique.
viii) ONGC Videsh Atlantic Inc. (OVAI):
ONGC Videsh has setup a Geological and Geophysical (G&G) Centre at
Houston, USA through its wholly owned subsidiary ONGC Videsh Atlantic Inc. The Centre
caters to requirement of G&G studies for potential new acquisitions of ONGC Videsh
including G&G studies of its existing portfolio of projects.
ix) ONGC Videsh Rovuma Limited: ONGC Videsh Rovuma Limited a wholly
owned subsidiary of ONGC Videsh was incorporated in Mauritius for re-structuring of 10% PI
in Rovuma Area 1, Mozambique.
x) ONGC Videsh Singapore Pte. Ltd.:
The Company was incorporated on 18.04.2016 in Singapore for acquisition
of shares in Vankorneft, Russia, through its subsidiary ONGC Videsh Vankorneft Pte Limited
(OVVL). OVVL holds 26% shares in Vankorneft, Russia and its share of production during
FY'19 was 5.800 MMTOE.
xi) Indus East Mediterranean Exploration Ltd.: Indus East
Mediterranean Exploration Limited, a wholly owned subsidiary of ONGC Videsh was
incorporated in Israel on 27.02.2018 and engaged in E&P activities related to
Block-32, Offshore Israel.
xii) ONGC Mittal Energy Limited (OMEL):
ONGC Videsh along with Mittal Investments Sarl (MIS) promoted OMEL, a
joint venture company incorporated in Cyprus. ONGC Videsh and MIS together hold 98% equity
shares of OMEL in the ratio of 49.98:48.02, remaining 2% shares are held by SBI Capital
Markets Ltd. OMEL also holds 1.20% of the issued share capital of ONGBV by way of Class-C
shares issued by ONGBV exclusively for Syrian Assets and is being financedby Class-C
Preference Shares issued by ONGBV.
xiii) SUDD Petroleum Operating Company:
SUDD Petroleum Operating Company (SPOC), a Joint Operating Company
incorporated in South Sudan to operate in Block 5A, South Sudan in which ONGC Videsh,
Petronas & Nilepet of South Sudan holds 24.125%, 67.875% & 8% PI respectively.
Block 5A is located in the prolific Muglad basin and is spread over an area of about
20,917 Square Km.
xiv) Mozambique LNG1 Company Pte. Ltd.:
Mozambique LNG1 Company Pte. Ltd. has been incorporated at Singapore by
Rovuma Area-1 Mozambique consortium to oversee marketing and shipping activities of LNG
from first 2 trains of Golfinho-Atum field.
ONGC Videsh Limited holds 16% interest in the Company which is in
proportion to its interest in Rovuma Area-1 Project, Mozambique.
xv) Falcon Oil & Gas B.V. (FOGBV): FOGBV was incorporated in
Netherlands on 06.02.2018. ONGC Videsh's wholly owned subsidiary ONGBV holds 40%
shares in FOGBV, IOC and BPRL holds 30% shares each though their respective Dutch
subsidiaries. The transaction documents were executed with ADNOC, Supreme Petroleum
Council (SPC) and the Operating Company (OPCO) on 10.02.2018 at Abu Dhabi for acquiring
10%PI in Lower Zakum Concession for a period of 40 years with effect from 09.03.2018.
During FY'19, ONGC Videsh's share of oil production was about 0.757 MMT.
b) Mangalore Refinery and Petrochemicals Limited (MRPL)
Your Company continues to hold 71.63 % equity stake in MRPL, a Schedule
A' Mini Ratna company and listed entity, which is a single location 15 MMTPA
Refinery on the West coast. Further,HPCL, another subsidiary of your Company, also
continues to hold 16.96% in MRPL. MRPL achieved the highest-ever crude oil processing of
16.23 MMT and lowest ever energy consumption of 74.27 MBN for FY'19. It also recorded
the highest-ever high value Polypropylene production of 388 KT.
Even with the stressed global market conditions, MRPL achieved Net
Profit of र 3,320 million and GRM of 4.06 USD/bbl.
Subsidiary
ONGC Mangalore Petrochemicals Limited (OMPL), is a subsidiary of MRPL.
It has set-up Aromatic Complex with an annual capacity 914 KTPA of Para-xylene and 283
KTPA of Benzene in . Mangalore Special Economic Zone as value chain integration project.
OMPL operated at capacity utilization of ~100% in FY'19. Total revenue in FY'19
was र 83,624 million and net profit wasर 229 million. This is a maiden profit
for OMPL. Presently, MRPL holds 51% in the share capital of OMPL and ONGC holds 48.99% and
thus OMPL is a subsidiary of MRPL. 4,000 shares (.0002%) are held by 13 individuals.
c) Hindustan Petroleum Corporation Limited (HPCL)
Your Company acquired 51.11% shareholding held by the President of
India in HPCL on 31.01.2018, for a total cash consideration of र 369,150 million.
HPCL has recorded excellent physical and financial performance during
the financial year 2018-HPCL achieved EBITDA of र 130,772 million in FY'19 as
compared to EBITDA of र 125,214 million in FY 2017-18. In spite of volatile crude
prices, lower cracks and depreciation of rupee, HPCL was able to achieve higher EBITDA due
to increased thru'put at refinery, higher marketing sales volume, and better
operational efficiency and inventory gains. During FY'19, PAT has been र 60,287
million on standalone basis, as compared to PAT of र 63,571 million during
FY'18. Gross Sales during FY'19 increased to र 29,57,126 million as
against र 24,32,267 million during the previous financial year.
During FY'19, HPCL refineries at Mumbai and Visakhapatnam have
maximized crude processing and achieved the highest ever combined refining throughput of
18.44 Million Metric Tonnes (MMT) with capacity utilization of 117%, compared to
throughput of 18.28 MMT achieved during FY'18. Both refineries recorded the best ever
throughput performance on individual basis as well.
Maximization of crude processing at refineries helped HPCL achieve the
highest ever production of LPG (896 TMT), Lube Oil Base Stock (474 TMT) and Bitumen (1,267
TMT). HPCL refineries also achieved excellent performance in the area of energy efficiency
and recorded the lowest combined specific energy consumption during the year. HPCL
achieved combined Gross Refining Margin (GRM) of USD 5.01 per barrel during the year as
compared to USD 7.40 per barrel during FY'18. GRMs were lower in comparison to
previous year mainly on account of reduced cracks in all products except HSD and FO,
higher fuel and loss cost due to increased crude price and exchange rate variation loss
due to rupee depreciation.
During FY'19, HPCL achieved the highest ever sales volume of 38.7
MMT with a domestic sales growth of 4.7% over historical. Domestic sales of Motor Spirit
(Petrol) increased by 6.8%, High Speed Diesel (HSD) by 2.1%, LPG by 7.1%, Aviation Turbine
Fuel (ATF) by 20%, Bitumen by 26.4% and Lubes by 8%, compared to FY'18.
HPCL continues to be India's largest lube marketer for the sixth
consecutive year with overall lubricant sales volume of 650 TMT during the year. HPCL
recorded market share gain of 0.17% in Motor Fuel sales amongst PSU OMCs during 2018-19.
HPCL continues to be India's second largest LPG marketer. In Industrial &
Consumer (I&C) business, HPCL exceeded 5 MMT sales volume for the third consecutive
year.
HPCL reported consolidated PAT of र 66,906 million during 2018-19
as against र 72,183 million during previous financial year. The consolidated PAT is
lower due to reduction in profits of HMEL and MRPL, resulting in reduction of HPCL's
share of profits. Further share of profit from MRPL for FY 2018-19 was र 588 million
as against र 3,389 million during 2017-18.
For the year 2018-19, HPCL has proposed a final dividend of र
9.40 per share, in addition to the interim dividend of र 6.50 per share aggregating
र 15.90 per share for FY'19.
Capital Projects of HPCL
During 2018-19, a number of capital projects were completed by HPCL
with highest ever overall capital expenditure of र 116,890 million. Pipeline project
for capacity expansion of Ramanmandi-Bahadurgarh Pipeline (RBPL) from 4.71 to 7.11 MMTPA
was completed within the scheduled time and cost. POL supply network was strengthened with
commissioning of new railway tank wagon gantry at Visakh black oil terminal, revamp of the
existing tank wagon facility at Jabalpur depot and commissioning of new aviation fuel
stations at Amritsar, Bhubaneshwar, Raipur and Kolhapur airports. LPG supply
infrastructure was augmented with commissioning of a new LPG bottling plant at Warangal
(Telangana) with bottling capacity of 60 TMPTA and additional bottling capacity
augmentation of 330 TMTPA at existing LPG plants.
478 new retail outlets and 1,018 new LPG distributorships were
commissioned during 2018-19 taking the number of total retail outlets to 15,440 and number
of total LPG distributors to 5,866 as of 31.03.2019.
HPCL has expanded its global footprints and is supplying HP Lubricants
to 11 countries.
HPCL's Visakh Refinery Modernization Project and Mumbai Refinery
expansion Project are progressing well. Major contracts have been awarded and site
construction activities are in progress for both the projects. Licensor selection for all
the process units has been completed for 9 MMTPA Greenfield refinery cum petrochemical
complex project of HPCL Rajasthan Refinery Limited (HRRL) and site construction activities
are in progress at Pachpadra in Barmer. Financial closure is achieved for
Rajasthan Refinery project.
HPCL's major ongoing pipeline projects
Mundra Delhi Pipeline (MDPL) capacity expansion,
Extension line from Palanpur to Vadodara including new greenfield
terminal at Vadodara, Visakh Vijayawada Secunderabad pipeline(VVSPL) capacity expansion
and
Extension of Visakh Vijayawada Secunderabad pipeline (VVSPL) from
Vijayawada to Dharmapuri & construction of marketing terminal at Dharmapuri are on
track.
In addition, Uran Chakan LPG pipeline project is in advanced stage of
completion. HPCL has been authorized to set up CGD networks in 9 states.
With this HPCL on its own and through its JV companies has
authorization for CGD network in 20 geographical areas in 9 states. Environmental
clearance is received for LNG, regasification terminal being set up in Joint Venture at
Chhara Gujarat.
Subsidiaries of HPCL i) Prize Petroleum Company Limited (PPCL)
Prize Petroleum Company Ltd (PPCL) is a wholly owned subsidiary of
HPCL. PPCL is the upstream arm of HPCL and is in the business of Exploration and
Production (E&P) of Hydrocarbons as well as providing services for management of
E&P blocks.
ii) HPCL Bio Fuel Limited
HPCL Biofuels Ltd (HBL) is a wholly owned subsidiary of HPCL. The
company was incorporated on 16.10.2009 as a backward integration initiative to foray into
manufacture of ethanol. HPCL Biofuels Ltd. (HBL) is a wholly owned subsidiary company of
HPCL. HBL was promoted as a backward integration initiative to enable HPCL's foray
into manufacturing of Ethanol for blending in Petrol. HBL presently has two integrated
Sugar-Ethanol-Cogeneration plants at Sugauli and Lauriya in the state of Bihar. iii)
HPCL Rajasthan Refinery Limited
HPCL Rajasthan Refinery Ltd. (HRRL) is a joint venture of HPCL and
Government of Rajasthan with 74% equity participation by HPCL and balance 26% by
Government of Rajasthan. HRRL is setting up a 9 MMTPA capacity Greenfield refinery cum
petrochemical complex in the state of Rajasthan. HPCL and the Government of Rajasthan
entered into a revised Memorandum of Understanding on 18.04.2017 for the construction of
the said Refinery with revised parameters. The revised Joint Venture Agreement was signed
on 17.08.2017.
iv) HPCL Middle East FZCO
HPCL Middle East FZCO, a 100% Subsidiary of HPCL was incorporated
on 11.02.2018 as a free zone company under Dubai Airport Free Zone and Establishment Card
was issued on 22.03.2018 for the company. HPCL Middle East FZCO was established for
trading of lubricants & greases, petrochemicals and refined petroleum products. The
company has also commenced its operations. HPCL has expanded its global footprints and is
supplying HP Lubricants to 11 Countries. Newly formed wholly owned subsidiary "HPCL
Middle East FZCO" in Dubai has also commenced its operations.
d) Petronet MHB Limited (PMHBL)
Upon acquisition of controlling interest in the capital of HPCL on
31.01.2018, PMHBL has become a direct subsidiary of your Company. Both the Company and
HPCL hold 65.44% (each 32.72%) in the capital of PMHBL. Balance 34.56% of equity being
held by banks/ Financial Institutions. PMHBL owns and operates a multiproduct
pipeline to transport MRPL's products to the hinterland of Karnataka.
In FY'19 PMHBL pipeline has achieved a throughput of 3.36 MMT
against total throughput of 3.50 MMT last year.
PMHBL has recorded total Revenue of र 2,030 million as compared
to र 1,711 million in the previous year. Further, Profit After Tax of PMHBL was
र 1,118 million in FY'19 as compared to र 835 million in FY'18.
Associates and Joint Ventures e) Pawan Hans Limited (PHL)
PHL, an Associate of the Company (49%) was formed with the Government
of India (51%), acting through Ministry of Civil Aviation inter-alia for catering to the
logistic requirements of oil fields located at remote/far-flung areas. PHL is Mini Ratna-I
Category PSU, having 43 helicopters including medi-chopper. The Government of India is
taking action for identifying a strategic acquirer for its entire holding and hence, your
Company has also decided to exit PHL along with the Government.
f) Petronet LNG Limited (PLL)
PLL, a JV of the Company, which was incorporated on 02.04.1998 with
12.50% equity holding along with identical stakes held by other Oil PSU co- promoters
viz., IOCL, GAIL and BPCL, is a listed Company. PLL, one of the fastest growing
world-class companies in the Indian energy sector, has set up the country's first LNG
receiving and regasification terminal at Dahej, Gujarat, and another terminal at Kochi,
Kerala. While the Dahej terminal has a nominal capacity of 15 MMTPA, the Kochi terminal
has a capacity of 5 MMTPA.
During FY'19, the Company's Dahej Terminal operated at 107%
of its name plate capacity and processed highest ever LNG quantities of 820 TBTU, as
against the 816 TBTU of LNG quantities processed in FY 2017-18. The overall quantities
processed by the Company in FY'19 was 844 TBTU as compared to 848 TBTU processed in
FY'18.
The Company registered highest ever Profit before Tax of र 32,336
million in FY'19, which stood at र 30,551 million in the corresponding period,
witnessing a growth of 6%. PAT for FY'19 was र 21,554 million, which stood at
र 20,779 million in FY'18, registering a growth of 4%.
The increase in profit over the corresponding FY 2017-18, is due to
higher volumes processed at the Dahej Terminal and better efficiency in operations.
The Board of Directors have recommended a dividend of र 4.50 per
equity share of र 10 each (45%) for the FY 2018-19.
g) Dahej SEZ Limited (DSL)
DSL, a 50:50 JV of the Company along with Gujarat Industrial
Development Corporation, was formed a for establishing a multi-product SEZ at Dahej. Your
Company has set up C2-C3 Extraction Plant as a valuechainintegration project, which serve
as feeder unit toONGC Petro- additions Limited.
Revenue from Operations of DSL during FY'19 was र 578
million, ProfitAfter Tax was र 328 million.
h) ONGC Tripura Power Company Limited(OTPC)
OTPC was incorporated on 27.09.2004 as a joint venture of your Company
(50%) along with the Government of Tripura (0.5%) and IL&FS Energy Development Co.
Ltd. (IEDCL - an IL&FS subsidiary) (26%); the balance 23.5% has been tied up with
India Infrastructure Fund II acting through IDFC alternatives Limited.
OTPC has set up a 726.6 MW gas based Combined Cycle Power Plant at
Palatana, Tripura at a project costof र 40,470 million. The basic objective of the
projectis to monetize idle gas assets of the Company in landlocked Tripura State and to
boost exploratory efforts inthe region. Power evacuation for both the units is done
through 663 KM long 400 KV double circuit transmission network by NorthEast Transmission
Company Limited (NETC), a joint venture of Power Grid Corporation, OTPC and Governments of
the North-Eastern states. OTPC's both power units of 363.3 MW each are fully
operational in two phases. Average Plant load factor (PLF) for the year FY'19 was
75%.
Total Income of OTPC during FY'19 was र 14,558 million and
Profit After Tax (PAT) was र 2,139 million. OTPC paid an interim dividend of @8% and
declared final dividend @6% also.
i) Mangalore SEZ Limited (MSEZL)
MSEZ is a Special Economic Zone promoted by the Company with an equity
stake of 26% along with KIADB (23%), IL&FS (50%), OMPL (0.96%) and KCCI (0.04%). MSEZ,
was set up as zone for development of necessary infrastructure to facilitate and locate
industrial establishment including OMPL. MSEZ is operational since 01.04.2015. With
investments exceeding USD 2 billion and exports of over USD 400 million worth of goods
from its units, MSEZ has emerged as one of the most vibrant operational multi-product SEZs
in India.
Revenue from operations for FY'19 was र 2,068 million and
PAT was र 24.10 million.
j) ONGC Petro additions Limited (OPaL)
OPaL is a mega petrochemical project established in Dahej SEZ for
utilizing in-house production of C2-C3 and Naphtha from the nearby unit of the Company.
The project cost of OPaL at completion was र 308,260 million.
OPaL has started its production in 2016-17 and has been ramping up its
production in phases. OPaL has established itself in domestic/export market with sale of
prime grade products. OPaL operated at average 70% capacity in FY'19; and aggregated
more than One Million Tonne of polymer sales. Total Income of OPaL during the year
FY'19 has been र 97,854 million. Polymers produced by OPaL has been adjudged as
the Best Polymer Brand of 2019 by Economic Times.
k) ONGC TERI Biotech Limited (OTBL)
OTBL is a JV formed by the Company (49.98%) along with The Energy
Research Institute (48.02%) and the balance 2% shares are held by individuals.
OTBL has developed various Biotechnical Solutions to oil and gas
Industries through collaborative researches involving the Company and TERI.
These technology include Bioremediation, Paraffin Degrading Bacteria
(PDB), Wax Deposition Prevention (WDP) and Microbial Enhanced Oil Recovery (MeOR) which
are being provided to oil and gas industries both in India and abroad.
Revenue from Operations of OTBL during FY'19 was र 216
million and Profit After Ta x was र 67 million.
l) Rohini Heliport Limited (RHL):
Your Company has subscribed 49% equity capital in Rohini Heliport
Limited, a mirror company of Pawan Hans Limited incorporated on 07.01.2019 for the purpose
of operating Rohini Heliport independently.
m) Indradhanush Gas Grid Limited (IGGL)
Your Company has subscribed 20% equity capital in IGGL, a JV company of
ONGC, IOCL, GAIL, OIL and NRL. The company has been incorporated in Guwahati, Assam for
the purpose of laying 1656 KM pipeline covering north east states with a Capex of र
92,650 Million. The company got incorporated on 10.08.2018 and has initiated the project
related activities.
25. Companies Which Have Become/ Ceased To Be Company's
Subsidiaries, Joint Ventures And Associates Companies During The Year
a) Companies which has become subsidiaries during the financial year
2018-19: Nil. b) Companies which has ceased to be subsidiaries during the financial year
2018-19: Nil. c) Companies which has become a joint venture or associate during the
financial year 2018-19: i) Rohini Heliport Limited. ii) Indradhanush Gas Grid Limited. d)
Companies which has ceased to be a joint venture or associate during the financial year
2018-19: Nil
26. ONGC's Start-up Initiative
ONGC announced र 1,000 million Start-up fund on its 60th
foundation day, i.e. on 14.08.2016 to foster, nurture and incubate new ideas related to
energy sector. The initiative, christened as ONGC Start-up Fund', is in line
with the Start-up India' initiative launched by the Hon'ble Prime Minister
of India on 16.01.2016.
The initiative is intended to promote entrepreneurship among young
Indians by creating an ecosystem that is conducive for growth of Start-ups in the energy
sector, which has a huge potential for technology-enabled ideas. The energy sector is
contributing enormously to the growth of economy. Currently, the sector faces various
critical challenges and new ideas are required to mitigate these challenges.
On 07.12.2016 a dedicated website startup.ongc. co.in was launched by
Honorable, Union Minister of State (I/C) Petroleum and Natural Gas for registration of
proposals. The website also contains an application form to capture proposals for Funding
support for Start-Ups.
In order to provide the entire support chain including seed capital,
hand-holding, mentoring, market linkage and follow-ups, MoUs with SINE of IIT Bombay and
L-Incubator of IIM-Lucknow (Incubators) were entered to support evaluation, selection,
mentoring, monitoring and to construe an ecosystem to incubate new ideas related to energy
sector and nurture them to become commercial ventures.
The associated institutes assist ONGC in evaluation, due-diligence,
construction of documents and associated negotiations. The initiative has received very
good response in four rounds held so far and one O&G 20 round held during Petrotech,
2019. ONGC has completed evaluation of two rounds and have provided support to five
startups from energy sector. Evaluation of 3rd round is in progress. Pitching
session for 4th and O&G 20 round is planned.
In addition to existing ongoing process, it has been decided that Oil
&Gas CPSEs will create a common platform/ process through IITs/IIMs/ other educational
Institutions for receiving and shortlisting proposals. ONGC is also a participant in the
process, which shall provide access to increased number of Start-ups.
27. ONGC's Solar Chulha Initiative
Hon'ble Prime Minister, while dedicating Deendayal Urja Bhavan to
the nation, had exhorted ONGC to take up a challenge of developing an energy efficient
electric cooking stove under ONGC Start-Up scheme, which would enable cooking through the
use of solar energy.
ONGC launched a nationwide Solar Chulha Challenge inviting
Entrepreneurs/ Scientists/ Researchers to participate in the Indigenous Development effort
of Solar Chulha (Electric and Thermal), suitable for indoor cooking of Indian food
(including frying, baking and chapati making). A panel of eminent scientists drawn from
various national institutions/ bodies was constituted under Dr. Anil Kakodkar, former
Chairman, Atomic Energy Commission for evaluation of applications. After two rounds of
evaluation by the Expert Panel and prototype demonstration held in ONGC premises on
23-24.04.2018, top three teams were awarded with cash prizes of र 10, र 5 and
र 3 Lakhs respectively. The other two teams were given appreciation awards of
र 1 lakh each. Teams from IIT Bombay and NIT Kurukshetra have installed 86 solar
electric chulhas and 5 solar thermal chulhas respectively in Betul, MP, under pilot
project. BMS College's proposal is under consideration against ONGC Start-up
Initiative.
28. Health, Safety and Environment (HSE)
Being a high risk industry, safety of its employees is the top-most
priority of your Company. Hydrocarbon exploration & production (E&P) operations
are being carried out in varied climate and environment areas ranging from deserts to
coastal areas, hilly terrains to forests, shallow to deep water and also in ultra-deep
water areas. E&P activities often interact with the ecosystems and may have
physico-chemical & bio-geochemical impact on the surrounding environment. Your
Company, being a responsible Corporate makes all efforts for protection and preservation
of environment.
The Company has recently revised its Environment Policy and e-Waste
Policy in line with the existing rules, regulations and guidelines. Your Company has a
dedicated Institute, viz. Institute of Petroleum Safety and Health Management (IPSHEM) at
Goa for research and development in the field of Health,Safety and Environment Management
apart from conducting training programs.
Your Company takes all the requisite measures to minimize the impact of
E&P activities on the environment by adoption of clean technologies for gaseous
emissions, liquid effluent and solid waste generated out of its operations. Your Company
has implemented globally recognized QHSE Management System conforming to requirements of
QHSE Certifications ISO 9001, ISO 14001 and ISO 18001 (OHSAS) and certified by reputed
agencies at all its operational units. Corporate guidelines on online incident reporting,
investigation and compliance of audit observations have been developed and implemented for
maintaining uniformity throughout the organization in line with international practice.
HSE Highlights during 2018-19
Internal Safety Audits (ISA) and External Safety Audits (ESA)
To check the conformity of activities and processes to HSE management
systems as well as to prevalent rules, regulations, guidelines and standards, regular
audits are being conducted internally by multi-disciplinary teams of ONGC and external
audits/ inspections by different agencies, namely Oil Industry Safety Directorate (OISD)
and Directorate General of Mines Safety (DGMS). During the year 268 internal safety audits
were conducted.
External Safety Audits
OISD conducts Safety Audits on regular basis. In the year 2018-19,
56 Safety Audit/Surprise Safety Audits and 2 Pre-Commissioning Audits were conducted by
OISD. Compliance status as on 31.03.2019 was 91.48%. DGMS is a Regulatory Agency
under the Ministry of Labour and Employment, Government of India in matters pertaining to
occupational safety, health and welfare of persons employed in mines (Coal, Metalliferous
and oil-mines). It carries out periodic inspections of ONGC onshore facilities. Compliance
status as on 31.03.2019 was 97.51%.
All efforts are being made to liquidate Safety Audit Recommendations
within the stipulated timelines. Expected Date of Completion (EDC) for compliance of audit
observation(s) is firmed up based on the criticality and volume of work involved. Suitable
compensatory safety measures are put in place till the audit observations are complied
with.
Waste Water Management: ONGC monitors the usage of waste water
and quality of effluent discharged by meeting statutory requirements for discharge of
treated effluent at surface/ subsurface through Effluent Treatment Plants (ETPs).
ONGC has 32 number of ETPs across onshore work centres to treat approx. 92,710 m3/day
of waste water produced during E&P operations.
For Offshore effluent treatment, Produced Water Conditioners (PWCs)
have been installed at process platforms. For treatment of sewage water generated in
offshore facilities, Sewage Treatment Plants (STPs) are in place.
Solid Waste Management: For environmentally safe disposal of
oily waste, ONGC has a Joint Venture Company ONGC-TERI Biotech Limited (OTBL) which has
developed specialized patented technology for bioremediation of oily sludge/oil
contaminated soil. The technology uses a consortium of Hydrocarbon degrading bacteria
which reduces the TPH (Total Petroleum Hydrocarbons) levels in waste/ soil to less than
1%. During 2018-19, 23,681 MT of oily sludge/ oil contaminated waste has been
bio-remediated.
Environmental Clearances: During the year 2018-19, 7 Nos. of
environment clearances (ECs) comprising 24 exploratory and 354 development wells in 30
fields/ML/PEL/ blocks in onshore areas,
GCS at Silchar and 4 Early Production Systems (EPS) at Raniganj block
of CBM Asset were granted by MoEF&CC for carrying out exploration, development and
production activities in acreages held by ONGC.
Other Initiatives during 2018-19:
Under Ten Safety Rules Awareness Programme, around 13,214 personnel
(both ONGC and contractual personnel) during 2018-19 and 41,711 personnel since inception
of the programme (i.e February, 2017) have been apprised. It continues to be a permanent
feature of the Safety Campaign.
HSE Index, introduced for benchmarking installations on various
parameters like detection and suppression system, environment parameters, evacuation
systems, equipment integrity etc., has been implemented at all work centres.
Regular Mock drills are being conducted at installations/ rigs to check
the efficacy of preparedness against defined emergency scenarios. During 2018-19, 12,132
Emergency Response Plan (ERP), 5 Offsite Disaster Management Plan (DMP), 15 Onsite DMP and
1 RCP (Regional Contingency Plan) drills have been conducted.
Mines Vocational Training (MVT) is being imparted to both ONGC
employees and contract personnel through 10 in house training centres.
Efficient implementation of HSE Management and no accident leading to
insurance claim resulted in appreciable decrease in Insurance premium for Offshore
Installation (USD 16.6 million for the year 2018-19 for Asset Value of USD 40.0 billion
against USD 18.6 million for Asset Value of USD 36.0 billion for the year 2017-18).
A unique initiative of Online Safety Pledge was launched through
in-house portal of "ONGC Reports" to further reinforce the commitment of ONGC
employees towards safety. The pledge is followed by automatic generation of Certificate
with signatures of Director- I/c HSE.
During 2018-19, Annual Preparedness Review (APR) was carried out to
understand roles and responsibilities of ONGC (participant member) and Oil Spill Response
Ltd. (OSRL), United Kingdom to meet the exigencies during oil spill which included
Walk-through Exercise and Mock Drill onboard ONGC MSV for the first time.
India was chosen to host World Environment Day (WED) 2018 by United
Nations Environment Program (UNEP) with theme "Beat Plastic Pollution". CMD
along-with MD-ONGC Videsh and Board of Directors led the WED celebrations on 05.06.2018
and made a strong appeal to motivated ONGC employees to adopt eco-friendly lifestyles with
sustainable alternatives to single use plastics. Additionally, ONGC was selected by
Ministry of Environment, Forests and Climate Change (MoEF&CC) as Knowledge Partner in
WED celebrations.
Corporate-HSE along with Corporate-CSR collaborated with International
Union for Conservation of Nature (IUCN) for Plastic Waste clean-up at Okhla Bird Sanctuary
and Okhla Barrage on 07.06.2018 followed by a workshop on "Beat Plastic Pollution:
From Rivers to the Oceans" on 20.06.2018 at ONGC Auditorium, Vasant Kunj, New Delhi.
Safety Alert is a brief guidance material that highlights an
incident or unsafe practice and outlines the required action to prevent their occurrence.
The information is disseminated to stakeholders for evaluation and taking appropriate
action. Corporate HSE has made it a practice to upload Safety Alerts on ONGC's
internal portal ongcreports.net for wider circulation and awareness. Safety Advisories
were also issued on ongcreports.net for generic audit observations and their compliances
to help in improving the performance during audits by external agencies.
For the first time, comprehensive Waste Management Audits were carried
out at select installations of Ahmedabad and Ankleshwar Assets during March 2019 to check
compliance of applicable provisions of waste management rules, which include Solid Waste
Management Rules, 2016; e-Waste (Management) Rules, 2016; Plastic Waste Management Rules,
2016;
Hazardous & Other Waste (Management & Trans-boundary Movement)
Rules, 2016 and Construction & Demolition Waste Management Rules, 2016.
ONGC has been accredited by Quality Council of India (QCI)
National Accreditation Board for Education & Training (NABET), since 2013, as an
Environment Impact Assessment (EIA) Consultant Organization which is mandatory for
preparing EIA reports required for Environmental Clearances. ONGC has completed two full
cycles of accreditation scheme. For further accreditation, assessment was done by QCI
NABET assessors at Deendayal Urja Bhawan during 20-22.02.2019 and which recommended
continuance of ONGC's QCI-NABET accreditation.
29. Carbon Management and Sustainable
Development
Sustainable Development is the overarching working template in the
Company and this finds expression in our commitment to continually enhance the triple
bottom line benchmarks of economic, environmental and social performance. Your Company has
a dedicated set up called Carbon Management and Sustainability Group (CM&SG) at the
corporate level to plan, implement and monitor sustainable development activities in
association with Sustainable Development Officers (SDOs) located at work centres.
The major endeavors towards this initiative are as under:
Clean Development Mechanism (CDM): Renewal of credit period of 51
MW wind power project at Surajbari, Gujarat. The final validation report was submitted to
UNFCC for revalidation and renewal of the project on 18.02.2019. This request and related
documents are available on the UNFCCC CDM website.
Development of CBM Asset - Bokaro as a new CDM project.
The baseline methodology applicable to the project was proposed to
UNFCCC. UNFCCC has sought clarification on the proposed methodology for which responses
are being submitted.
Verification of Five existing CDM projects
The verification of following five existing CDM projects has been taken
up for the issuance of CERs:
51 MW Wind Power Project, Surajbad GFR Neelam & Heera, GT-1 &
GT-2 at Hazira, GFR Uran, Amine Circulation Pumps, Hazira For verification of 102 MW Wind
Power Plant CDM project at Jaisalmer, RajasthanDesignated Operational Entity (DOE) has
been hired to carry out the verification work.
Global Methane Initiative
In 2018-19, CM&SG carried out gas leak survey to detect fugitive
emission of methane at 10 production installations of Ankleshwar Asset, and C2-C3, Dahej
plant. The Gas Leak Survey Reports were submitted to Ankleshwar Asset and C2 C3
Plant for remedial measures.
ONGC Group Sustainability Report
The Company launched its independently assured sustainability Report in
the year 2009-10 and from then onwards the Company has incrementally enhanced the boundary
of reporting to include subsidiaries ONGC Videsh and MRPL and from FY'17 onwards the
Group Corporate Sustainability Report also includes Joint Venture companies OTPC, OPaL and
OMPL. The GRI based externally assured reports are now a major enabler to the Company
towards creating triple bottom line value creation and parity to all forms of capital.
ONGC Group Sustainability report FY'17 was published in June, 2018.
Sustainable Water Management Projects: The following projects were
taken up during the year
Water footprint study of CBM Asset, Bokaro.
Feasibility study for setting up of desalination plant at
Rajahmundry Asset.
Feasibility study for setting up of desalination plant at MRPL.
Sea Water Desalination Plant, Uran.
30. Business Responsibility Report 2018-19
Clause (f) of sub-regulation (2) of regulation 34 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, stipulates that the annual
report shall contain a Business Responsibility Report describing the initiatives taken by
the listed entity from an environmental, social and governance perspective in the format
specified.Accordingly, the Business Responsibility
Report for 2018-19 has been appended to this Annual Report.
31. Internal Control System
Your Company has put in place adequate Internal
Financial Controls by laying down policies and procedures to ensure the
efficient conduct of its business; safeguarding of its assets; prevention and detection of
frauds and errors; accuracy and completeness of the accounting records; and timely
preparation of reliable financial information, commensurate with the operations of the
Company. Effectiveness of Internal Financial Controls is ensured through management
reviews, control self-assessment and independent testing by the Internal Audit Team
indicating that your Company has adequate Internal Financial Controls over Financial
Reporting in compliance with the provisions of the Companies Act, 2013 and such Internal
Financial Controls are operating effectively. The Audit Committee reviews the Internal
Financial Controls to ensure their effectiveness for achieving the intended purpose.
Independent Auditors Report on the Internal Financial Controls of the Company in terms of
Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 by the Statutory
Auditors is attached along with the Financial Statements.
32. Human Resource Development
ONGC's operations are in challenging terrains deserts,
jungles, border areas, remote fields and offshore. Your Company truly value our Human
Resource who commit themselves towards pursuit of exploration and production of
hydrocarbons to ensure India's Energy security. To keep their morale high, your
Company extends welfare benefits to employees and their dependants by way of comprehensive
medical care, education, housing, and social security.
There were 31,065 employees on rolls as on 31.03.2019. These ONGCians
dedicated themselves for securing excellent performance of your Company during the year.
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, rapid technological advances, physically challenging
work environment, fluctuating product prices and growing competition. Your Company has
drawn up a scientific manpower induction, retention and succession plan aligned to the
business plans as well factoring the manpower profile of the Company.
During the year, your Company carried out Employee Engagement &
Brand Perception Survey "Anubandhan" to understand the drivers of employee
engagement and to know the attributes which are valued by the existing and prospective
employees. More than 13,600 employees of your Company along with approx. 2,100 students
from top B Schools and Engineering Colleges of India responded to the survey. Survey
results indicated 85% engagement level.
Your Company emerged as the most preferred Corporate in the Oil and Gas
Sector amongst engineering students.
During the year 2018-19, a total of 14,486 executives and 4,622
non-executives were imparted appropriate training, spanning 1,74,455 executive and 14,889
non-executive mandays'.
During 2018-19, 705 Graduate Trainees (in four batches) were exposed to
various E&P activities as part of Induction Training'. 19 training
programmes were conducted through foreign faculty which were attended by 394 participants.
Your Company also pursued structured initiatives for maintaining a vibrant academia
industry interface through Chairs, participation in various academia-industry level
forums, viz workshops, seminars, conferences, etc.
Your Company also initiated a program for identification of
competencies and development of leadership for its identified Mid Level executives through
online development centres, with detailed Individual Development Plans for their
development based on the assessments.
To keep the workplace lively and the workforce engaged and vibrant,
your Company also conducted Business Games' to hone the business acumen of its
executives through business quizzes, business simulations and case-study presentations.
During the year 2018-19, a total of 248 teams and 961 executives participated in the
event.
Similarly, Fun Team Games' (FTG) were organized for E0 and
below level employees to inculcate MDT (Multi-disciplinary Team) concept and spirit of
camaraderie and belongingness to the organization, which was very well received by the
participants. A total of 178 Teams and 712 employees participated in FTG during the year
2018-19. The winners of Business Games and Fun Team Games were felicitated by the CMD
during Republic Day Celebrations - 2019.
Employee Welfare Trusts
Your Company has established following Trusts for welfare / social
security of employees:-
Employees Contributory Provident Fund (ECPF) Trust, manages
Provident Fund accounts of employees of your Company.
The Post Retirement Benefit Scheme (PRBS)
Trust of your Company manages the pension fund of employees of your
company. The Scheme was converted into a Defined Contribution Scheme in accordance with
DPE guidelines in Nov'2013. The Composite Social Security Scheme (CSSS) formulated
by your company provides an assured ex-gratia payment in the event of unfortunate death or
permanent disability of an employee while in service. In case of separation other than
Death/Permanent total disability, employee's own contribution alongwith interest is
refunded.
Gratuity Fund Trust exists for payment of gratuity as per the
provisions of the Gratuity Act.
Your Company has a Sahyog Trust for its Sahyog Yojana to provide
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 workforce and their kin, who do not have adequate means of
support. The beneficiaries under this scheme include casual, contingent, daily rated, part
time, adhoc, contract appointees, tenure based employees, apprentices and trainees
employed by your Company besides regular and past employees. Under the scheme, an amount
of र 43.7 million was disbursed by the Trust during 2018-19 to 1178 beneficiaries.
Your Company has Asha Kiran Scheme to meet the emergency needs
of the ex-employees retired prior to 01.01.2007. The scheme was launched as per DPE
guidelines by creating a corpus of 1.5% PBT.
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 15.5 percent and 10.4 percent respectively as on 31.03.2019.
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
up-liftment in and around its operational areas:-
Annual Component Plan
Under Annual Component Plan for SC/ST, every year allocation of र
200 million is made. Out of this, र 60 million is distributed amongst all the
work-centres of ONGC for taking up activities for welfare of SC/ST Communities in and
around areas of the Company's operations. In addition, र 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 utilised
for taking up various measures for the welfare and up-liftment 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 meritorious students belonging to SC/ST community
Your Company provides 1000 scholarship for meritorious SC & ST
students for pursuing higher professional courses at different Institutes and Universities
across the country in Graduate Engineering, MBBS, PG courses of MBA and Geo-Sciences. The
major feature of the scheme is that the scholarships have been equally divided for both
Boys and Girls students and the amount of scholarship has been made @ र 4,000/- per
month amounting to र 48,000/- per annum per student subject to conditions of the
scheme.
Women Empowerment
Women employees constituted over seven percent (as on 31.03.2019) 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 reputed agencies. All E4/E5 level women executives underwent an
Online Development Centre (ODC) program for identification, assessment and development of
leadership competencies
Disclosure under the Sexual Harassment of women at workplace policy
(prevention, prohibition and redressal) Act, 2013
Your Company has complied with the provisions under the Sexual
Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013
including constitution of Internal Complaints Committee (ICC) for dealing with complaints
on sexual harassment of women at workplace. Two complaints of sexual harassment were
received in the year 2018-19.
Work-Life Balance
Your Company believes in providing work-life balance to its employees.
The townships at many work-centers have developed facilities like gymnasiums, music rooms,
etc. Facilities for gym, yoga, etc. were also provided in Offshore Living Quarters.
Outbound programmes with families were also organized at various work-centers. In
addition, cultural programmes involving employees and their families were also conducted.
ONGC Officers' Mahila Samiti (OOMS) and Resident Welfare Associations (RWAs) were
involved in organizing these cultural programs. Your Company has an adventure wing named
ONGC Himalayan Association which organizes adventure programmes like mountaineering,
trekking, water rafting, snow skiing, desert safari, Aero sports etc. which adds towards
employee morale, engagement, team spirit, camaraderie, stress management and spirit to
explore the unknown. 10 members of ONGC's Team successfully scaled the third highest
peak in the world, Mount Kanchenjunga, on 20-21 May, 2018.The Team comprised a woman
employee and a female scholarship mountaineer.
Grievance Management System
Your Company has put in place an effective online response mechanism
(https://grievance.ongc.co.in) since 2015 to enable all stake-holders viz. citizens/
vendors, employees, former employees, to register and get online redressal to their
grievances related to any operational wing of ONGC.
Your Company has also put in place a Grievance Management System for
redressing employee grievance, which provides for three-tier channel for grievance
redressal with an Independent Appeals Committee, at Corporate Level, which is chaired by
an external professional to ensure transparency and justice. Each level of reporting at
Controlling Officer (Channel-I), Sectional Head (Channel-II) and
Asset/Basin/Institute/Plant/Office Head (Channel-III) has been mapped to provide access
for settling individual grievances. An individual employee can enhance the level to the
next Channel in case his grievance is not settled at the first, second or third Channels.
The Appeals Committee situated at HQ can also be accessed for settlement of grievances in
case the location Channels are not effective in resolving the grievance. Further,
provision for representation through Chief Liaison Officers of SC/ST/OBC in the Appeals
Committee is also built in to protect the interest of reserved category employees.
For external stakeholders, the Company has a well laid down grievance
redressal system in place with adequate provisions to escalate the matters up to the Board
(Stakeholders Relationship Committee a Board level Committee headed by an
Independent Director).
The Company voluntarily facilitates grievances through Independent
External Monitors (IEMs) and through Outside Expert Committee (OEC).
33. Industrial Relations
During the year your Company maintained harmonious Industrial Relations
throughout the Corporation. Man-days loss due to internal industrial action was reported
as NIL' for the year 2018-19.
34. Implementation under the Right to Information Act, 2005
Your Company has a well-defined mechanism in place to deal with the RTI
applications received under the RTI Act 2005. Your Company has a designated General
Manager level officer as a Nodal Officer to oversee its implementation. The
requests received are processed by the 22 senior personnel designated as Central
Public Information Officers' (CPIOs) in various workcentres across the country, in
compliance of Sections 5(1) and 5(2) of the Act. The particulars of all the quasi-judicial
authorities under the ambit of RTI Act, 2005 have been uploaded on the company website
(www.ongcindia.com) for information of the general public. Further in compliance of
Government directives, your Company is successfully processing the applications under the
Act, online.
Your Company received 1,963 applications (including 138 transferred by
other Public Authorities to ONGC) during the period from April 2018 to March 2019, and 183
RTI applications were carried forward from the year 2017-18. A total of 1,843 applications
were responded to, out of a total of 2,146 applications. Further, 43 applications were
rejected and 57 applications were transferred to other public authorities, in accordance
with the provisions of the RTI Act 2005. There were 357 first appeals, which were
disposed-off during the period. Additionally, 66 Second Appeals which were listed for
hearing at the CIC during FY 2018-19 were also processed.
35. Implementation of Official Language Policy
Your Company makes concerted efforts for promotion and implementation
of Official Language. In this regard, some of the steps taken during the year were:
Unicode Hindi software installed in all offices.
Hindi workshops conducted at regular intervals in all work
centres.
Hindi Technical seminars, Kavi Gosthies' and Hindi
plays organized at various work centres.
Various programmes for promotion of Rajbhasha' were
organised at all work centres of ONGC during Rajbhasha Fortnight' (14-28 Sep.,
2018) and Vishwa Hindi Diwas' (10.01.2019).
Hindi Teaching Scheme of Govt. of India was implemented
effectively at all regional work centres of ONGC.
E-Roster of Employees regarding working knowledge of Hindi was
put in place.
Hindi e-magazines were published at various work centres.
Paperless office (DISHA) has been made bilingual for effective
implementation of Official Language policy in the office works. Besides this installation
of Unicode in SAP platform has been taken-up to enable bilingual work in SAP also.
In recognition of the initiatives taken for promotion of
Rajbhasha, your Company bagged eight Town
Official Language Implementation Committee (TOLIC) awards under
various categories during the year.
36. Sports
ONGC sportspersons earned laurels for the Company and the country by
securing 15 medals including 3 Gold, 7 silver and 5 Bronze at Asian Games 2018 held at
Jakarta & Palembang, Indonesia. 38 ONGCians represented the Indian contingent while
participating in this mega Event.
In Commonwealth Games 2018 at Gold Coast,Australia, ONGC sportspersons
bagged 13 medals including 5 Gold, 3 Silver and 5 Bronze contributing to the overall tally
of 66 medals of Team India. 21 ONGCians represented India in various game disciplines in
this event.
Your Company continued its large scale support for development of
sports in the country in the form of employment to 171 sportspersons and scholarships to
289 budding talents in 25 game disciplines. Your Company also sponsored various sports
associations / federations / sports bodies for organising sports events as well as to
develop sporting infrastructure. The support has enabled many sportspersons to achieve and
bring home laurels for the nation and the organisation.
Three ONGCian's were conferred the prestigious "Arjuna
Award" for the year 2018 namely Ms. Hima Das (Scholarship Athlete), Shri Ankur Mittal
(Shooting) and Shri G Sathiyan (Table Tennis).
Shri Pankaj Advani, was conferred the third highest civilian award
"Padma Bhushan" in the year 2018. He also won his 21st World title in
cue sports by winning two World Titles in 2018 IBSF World Billiards Championship in time
and point format at Myanmar in November 2018.
Shri Virat Kohli (Cricket) was conferred the prestigious "Rajiv
Gandhi Khel Ratna" for the year 2018. The total number of National Awardees in the
organization stand at 44 ( Padma Bhushan 1, Khel Ratna 2, Padma Shri
3 & Arjuna Award 37 and Dhyanchand Award 1).
ONGC Scholarship Athlete Shri Suraj Panwar created history by winning
Silver medal in 5000 m walk at Buenos Aires in Youth Olympic Games 2018.
ONGCian Shri Sourav Kothari won WBL World Billiards' Title
in Leeds, UK in October 2018.
ONGCian Shri Sourabh Verma won the Dutch Super Open 100'
International Badminton Tournament at Almere, Netherland in October 2018.
ONGC's Women Shooting Team comprising
ONGCian Ms. Apurvi Chandela, and scholarship players Ms. Sriyanka
Sadangi and Ms. Gayatri Pawaskar won Gold medal in the 62nd National Shooting
Championship (Rifle Pistol event) Trivandrum in November, 2018.
Your Company organised the 2nd edition of the Para Games in
March, 2019 in which 148 PWDs from different work-centres of ONGC participated.
37. Corporate Social Responsibility (CSR)
A report on CSR has been placed at Annexure B to the Report.
38. Accolades
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. Detail of such accolades is placed at Annexure- C'.
39. Regulators or Courts order
During the Financial year 2018-19, there is no order ordirection of any
court or tribunal or regulator which either affects Company's status as a going
concern or which significantly affects Company's business operations.
40. Director's Responsibility Statement
Pursuant to the requirement under Section 134(3)
(c) of the Companies Act, 2013, with respect to Directors'
Responsibility Statement, it is hereby confirmed that: a) In the preparation of the annual
accounts, the applicable accounting standards have been followed and there is no material
departures from the same; b) The Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are reasonable and
prudent, so asto give a true and fair view of the state of affairs of the Company as at
31.03.2019 and of the profit of the Company for the year ended on that date; c) The
Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013, for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities; d)
The Directors have prepared the annual accounts of the Company on a going
concern' basis; e) The Directors have laid down internal financial controls which are
being followed by the
Company and that such internal financial controls are adequate and are
operating effectively; and f) The Directors have devised proper systems to ensure
compliance with the provisions of all applicable laws and that such systems are adequate
and operating.
41. Corporate Governance
A detailed report on Corporate Governance as stipulated under
Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations,
2015 is appended and forms part of the Board's Report.
42. Statutory Disclosures
Your Directors have made necessary disclosures, as required under
various enactments including the Companies Act, 2013 and the SEBI (Listing Obligations
& Disclosure Requirements)Regulations, 2015.
43. Extract of Annual Return
As per requirement of Section 92(3) of the Companies Act, 2013, the
extract of the annual return in form MGT-9 is placed at Annexure-D.
44. Particulars of Employees
Your Company being a Government Company, the provisions of Section
197(12) of the Companies Act, 2013 and relevant Rules issued thereunder do not apply in
view of the Gazette notification dated 05.06.2015 issued by Government of India, Ministry
of Corporate Affairs.
The terms and conditions of the appointment of Functional Directors are
subject to the applicable guidelines issued by the Department of Public Enterprises,
Government of India. The salary and terms and conditions of the appointment of Company
Secretary, a Key Managerial Person (KMP) of the Company, is in line with the parameters
prescribed by the Government of India.
45. Energy Conservation
The information required under section 134(3)(m) of the Companies Act,
2013, read with the Companies (Accounts) Rules, 2014, is annexed as Annexure
E'. 46. Audit Committee
In compliance with Section 177(8) of the Companies Act, 2013, the
details regarding Audit Committee is provided under Corporate Governance report which
forms part of this Annual Report. There is no instance during FY'19, where the Board
had not accepted any recommendation of the Audit Committee.
47. Auditors
The Statutory Auditors of your Company are appointed by the Comptroller
& Auditor General of India (C&AG).There were 6 chartered accountants firms namely
M/s. PKF Sridhar & Santhanam LLP, M/s. Dass Gupta & Associates, M/s. K. C. Mehta
& Co., M/s. MKPS & Associates, M/s. G M Kapadia & Co., M/s. R Gopal &
Associates who were appointed as Joint Statutory Auditors of the Company for the financial
year 2018-19.
The Statutory Auditors have been paid a total remuneration of र
40.52 million towards audit fees, certification and other services. The above fees are
inclusive of applicable service tax/ GST but exclusive of re-imbursement of travelling and
out of pocket expenses actually incurred.
48. Auditors' Report on the Accounts
The comments of Comptroller & Auditor General of India (C&AG)
form part of this Report and is attached Annexure F'. There is no
qualification in the AuditorsReport on the Financial Statements of the Company.
During the year 2018-19, there has not been any fraud reported by the
Statutory Auditors of the Company.
49. Cost Audit
There were 6 cost accountants firms namely M/s. M. Krishnaswamy &
Associates, M/s. Musib & Co., M/s. Chandra Wadhwa & Co., M/s. Bandopadhyaya
Bhaumik & Co., M/s. N. D. Birla & Co., M/s. Joshi Apte & Associates who were
appointed as Joint Cost Auditors of the Company for the financial year2018-19.
Appointments were made by the Board of Directors. The Cost Audit Report for the year
2017-18 has been filed under XBRL mode on 29.08.2018 which was well within the due date of
filing.
Further, the required cost records as specified under the Companies
Act, 2013 are prepared and maintained by the Company.
50. Secretarial Audit
In terms of Section 204(1) of the Companies Act, 2013, the Company has
engaged M/s. Ashu Gupta & Co., Company Secretaries in whole-time practice, as
Secretarial Auditors for conducting Secretarial Compliance Audit for the financial year
ended 31.03.2019. Their report has been annexed and forms part of the Annual Report.
The Secretarial Auditor has made observations regarding performance
evaluation of Independent Directors by the entire Board of Directors under Regulation
17(10) and evaluation of non-independent directors and the Board of directors as a whole
by Independent Directors under Regulation 25(4)of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
In this regard, it is mentioned that the Ministry of Corporate Affairs
(MCA) vide notification dated 05.06.2015 notified exemptions to government companies from
provisions of Section 178(2), (3) and (4) regarding appointment, performance evaluation
and remuneration to directors of government companies. Further, the MCA vide notification
dated 05.07.2017 notified amendment to schedule IV of the Companies Act, 2013 provided
exemption to government companies with respect to evaluation of performance of
Non-Independent Directors, Chairperson and Board. It is learnt that Department of Public
Enterprises has requested to SEBI through Department of Economic Affairs, Ministry of
Finance for exemption to government companies regarding performance evaluation of
directors as Government of India has independent mechanism for appointment and as well for
assessment of performance of whole-time directors, government nominee directors and
independent directors.
In respect of observation regarding prior approval of the Audit
Committee for all Related Party Transactions (RPTs), it is mentioned that in line with
provisions of the Companies Act, 2013 and SEBI Regulations, a policy on RPT has been
framed, which can be accessed at https://www.
ongcindia.com/wps/wcm/connect/en/investors/ policies/ In terms of RPT Policy, all the
contracts/ arrangements/ transactions entered by the Company during FY'19 with
related parties were in the ordinary course of business and on an arm's length basis.
Transactions with related parties have been disclosed as Annexure A' and forms
part of this report. SEBI Regulations provide for prior approval of related party
transactions except with government companies and with wholly-owned subsidiaries. In this
regard, necessary system is being put-in place to ensure compliances.
51. Directors
a) Policy for Selection and appointment of Directors' and their
remuneration.
Your Company being a Government Company, the provisions of Section
134(3)(e) of the Companies Act, 2013 do not apply in view of the Gazette notification
dated 05.06.2015 issued by Government of India, Ministry of Corporate Affairs.
b) Performance Evaluation
The provisions of Section 134(3)(p) of the Companies Act, 2013 relating
to evaluation of Board/ Directors do not apply to your Company since necessary exemptions
are provided to all government companies. The Company being a Government Company, the
provisions relating to Performance Evaluation of Directors stand exempted. The Department
of Public Enterprises has taken up with SEBI through the Department of Economic Affairs,
Ministry of Finance to make suitable amendments in the LODR regulations in line the
Companies Act, 2013.
c) Appointments/ Cessation etc.
Since the 25th Annual General Meeting held on 28.09.2018,
change in composition of Board is as under- i) Shri N. C. Pandey, appointed as Director
(Technical and Field Services) of the Company w.e.f. 29.10.2018. ii) Dr. Alka Mittal,
appointed as Director (Human Resources) of the Company w.e.f. 27.11.2018. iii) Dr.
Sambit Patra, ceased to be an Independent Director of the Company on 23.03.2019 as he
resigned due to personal reasons. The Board places on record its appreciation for his
contribution during his tenure.
The strength of the Board of Directors of the Company as on 31.03.2019
was 17 comprising 7 Executive Directors (Functional Directors including CMD) and 10
Non-Executive Directors including two Government nominees and 8 Independent Directors.
There is vacancy for an Independent Director to meet the requirement under the provisions
of Companies Act, 2013 as well as under the Listing Regulations, 2015.
52. Acknowledgement
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 Auditors and Comptroller & Auditor General
of India and are grateful for their continued support and cooperation.
Your Directors thank all share-owners, business partners and all
members of the ONGC Family for their faith, trust and confidence reposed in the Board.
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 and excel.
|
On behalf of the Board of Directors |
|
Sd/- |
New Delhi |
Shashi Shanker |
20.06.2019 |
Chairman and Managing Director |