ONGC is the largest crude oil and natural gas Company in India, contributing around 71 % to Indian domestic production and the most profitable PSU in India. With 60+ years of oil exploration, ONGC has discovered 8 out of 9 producing basins of India: 1958 at Gujarat, 1963 at Assam, 1967 at Rajasthan, 1974 at Mumbai, 1980 at Krishna Godavari, 1985 at Cauvery, 2019 at Bengal & 2022 at Vindhyan.

ONGC group includes various companies through Subsidiaries, JV and association which helps it expand its footprints in energy business and it reported a consolidated turnover of 643037 crore in FY24. Company’s subsidiaries are ONGC Videsh (100%) which undertakes its Overseas E&P business. HPCL (54.9%) and ONGC MRPL (71.63%) undertakes Refinery business, Petronet MHB Limited (49.9%) undertakes Pipeline business, ONGC green undertakes Renewables business. Company’s JVs includes OTPC (50%) for Power business, OTBL (49.98%) for Services business, OPAL a JV with GAIL and GSPC for petrochemicals business, MSEZ (26%) and DSL (50%) for SEZ business and IGGL (20%) for pipeline business. Company has also entered association with Petronet LNG limited (12.5%) for LNG business, Pawan Hans Helicopters Limited (49%) and Rohini Heliport (49%) for Logistics business.  

In FY24 company explored 11 new discoveries, 2 in Mahanadi Basin and monetized 7 new discoveries and bagged 84% of blocks in OALP round VIII. It drilled 544 wells marking it the highest ever so far. Company also marked 41.787 MMTOE production of O+OEG and VAP production of 2.519 MMT. Company has also completed 3 major projects at capex of Rs. 3899 crores with an envisaged gain of 9.41MMTOE. Company has also incorporated a new wholly owned subsidiary ONGC Green to explore low carbon and Green Amonnia Plant opportunities.

In last 5 years company has tuned in capex of Rs. 1,51,000 crore and it has planned a capex of Rs. 35850 crores in FY25.

Company has several projects under implementation which includes 24 major projects worth Rs. 64k Cr. with an envisaged gain of 80.52 MMTOE, 14 projects under tendering worth Rs. 27k Cr, with 46MMTOE potential and 16 projects under conceptualization worth more than Rs. 50k Cr. with 86 MMTOE potential.

Company also has crafted a robust roadmap to scale up its low-carbon energy portfolio significantly and it has already aligned itself with India's ambitious goals and is wholeheartedly contributing to the nation's aim to curtail carbon emissions by 1 billion tons and simultaneously reduce carbon intensity by 45% by 2030. ONGC plans to significantly increase its spending on green initiatives to reduce its carbon footprint as a broader effort to achieve Net-Zero for Scope-1 and Scope-2 emissions by 2038. ONGC is in advanced stage of crafting collaborations with leading players in the energy space on various low-carbon energy opportunities including renewables, green hydrogen, green ammonia, and other derivatives of green hydrogen.  It is also planning to set up two green-field O2C plants in India. ONGC is charting a roadmap for opportunities in renewable energy and low-carbon sectors.

Under Green Energy business company has installed capacaity of 193MW which includes 153 MW Wind energy and 40 MW of Solar Energy. It also has a small scale GH2 plant in operating Assets for captive use under feasibility study. Company plans to have 1GW installed capacity by Fy25 through renewable asset acquisition along with capex allocation of Rs. 1000 Cr and 10GW capacity by Fy30 through 60-70% of Solar, 30-40% onshore wind, 25CBG plant, 2GW PHP, 1MMTPA Green Ammonia and 180KT Green Hydrogen by capex allocation of Rs. 1,00.000 cr. over the years.

Company has presence in 19 countries across 5 continents through its wholly owned subsidiary ONGC Videsh. ONGC Videsh owns Participating Interests in 35 oil and gas assets in 15 countries and produced about 30.3% of oil and 23.7% of oil and natural gas of India’s domestic production. It also has 32 projects in 15 countries which includes 14 Production projects, 4 Discovered/Development projects, 11 Exploration projects and 3 Pipelines in Columbia, Venezuela, Brazil, Azerbaijan, UAE, South Sudan, Mozambique, Russia Vietnam, Myanmar, and Bangladesh respectively. It also operated 4.8MMT Operated Flowing Barrels from 7 projects in 4 countries.

Fundamentals (FY23-24):

Financial Results:

Company has reported Net Sales of Rs 34,636.69 crore in March 2024 down by 4.56% from Rs. 36,292.55 crore in March 2023. Its Quarterly Net Profit was at Rs. 9,869.37 crore in March 2024 up 4084.4% from Rs. 247.70 crore in March 2023. Company’s EBITDA stands at Rs. 19,570.70 crore in March 2024 up 41.82% from Rs. 13,799.53 crore in March 2023. ONGC EPS has increased to Rs. 7.85 in March 2024 from Rs. 0.20 in March 2023.

Key Updates:

1. ONGC has signed a definitive Sale Purchase Agreement (SPA) for directly acquiring 0.615% Participating Interest (PI) in Offshore Azeri Chirag Gunashli (ACG) oil field in Azerbaijan from Equinor. The agreement also includes acquiring 0.737% shares of the Baku Tbilisi Ceyhan (BTC) pipeline company through its wholly-owned subsidiary ONGC BTC Limited. Total investment for these acquisitions would be up to USD 60 million. These acquisitions are in addition to ONGC Videsh’s existing 2.31% PI in the ACG field and 2.36% shareholding in the BTC pipeline.
2. ONGC and IndianOil Corporation Limited (IOCL) signed a memorandum of understanding (MoU) to establish a small-scale Liquefied Natural Gas (LNG) plant near the Hatta Gas Field in the Vindhyan Basin. The establishment of the Hatta LNG plant will significantly enhance the Vindhyan Basin's status, upgrading it from a Category II to a Category I Basin.
3. Marking a historic achievement in India’s energy sector, Hon’ble Prime Minister Shri Narendra Modi recently flagged off the ‘First Crude Oil’ tanker ‘Swarna Sindhu’ from ONGC’s Krishna Godavari deepwater block. At its peak production, this project will add 7 percent each to India’s oil and gas production. Developed with an investment of over 41,000 crore rupees, the KG-DWN 98/2 Deepwater Oil Field M in Krishna Godavari Basin is one of the most technologically complex projects. Total envisaged peak gas production and oil production from the Project is about 10 MMSCMD (Million Standard Cubic Meters per Day) 45,000 BOPD (Barrels of Oil per day).
4. ONGC and NTPC Green Energy Limited (NGEL) signed a Joint Venture Agreement (JVA) to develop renewable energy projects focusing on offshore wind.
5. ONGC signed a Cooperation Agreement with Total Energies to carry out methane emissions detection and measurement campaigns using Total Energies’ pioneer AUSEA (Airborne Ultralight Spectrometer for Environmental Applications) technology.
6. ONGC Videsh Ltd. (OVL) has incorporated a wholly owned subsidiary OVL Overseas IFSC Ltd. (OOIL) in GIFT City, Gujarat. This GIFT city entity will function as the Global Treasury Centre to cater to the treasury activities of OVL and its 25 subsidiaries (including step-down subsidiaries) spread across 15 countries. Given the business-friendly regulatory environment in GIFT City, OOIL expects to efficiently consolidate funds available with the group in various countries and raise additional funds needed to achieve the ambitious target of producing 40 million Metric Tones Oil & Oil equivalents (MMToe) by 2040 from overseas assets.
7. Company has recently launched a significant business process initiative today with the inauguration of the ONGC Shared Finance Services in collaboration with IBM Consulting. This will centralize and standardize all vendor payments of ONGC, accelerating the processes for an enhanced 360-degree vendor experience.
8. Company has also inked Memorandum of Understanding (MoU) with NTPC Green Energy Limited (NGEL) to realize its Renewable energy objectives towards energy transition. The MoU will primarily explore the feasibility and setting up of Renewable Energy Projects in various domains.
9. Oil and Natural Gas Corporation Limited (ONGC) has also entered into a term contract with Bharat Petroleum Corporation Limited (BPCL) for the sale of crude oil from the Mumbai region, cementing the strong partnership between the two esteemed companies.
10. Oil and Natural Gas Corporation Limited (ONGC) has made discoveries of Oil and Gas in MBS171HAA-1 (MBS171HAA-A)-“AMRIT” in OALP (Open Acreage Licensing Policy) block MB-OSHP-2017/1 in Mumbai Offshore (SW) on the Arabian Sea. There is another remarkable discovery in MBS182HDA-1(MBS182HDA-A) named “Moonga” in OALP exploration Block in Mumbai Offshore.
11. ONGC Videsh Limited has also signed a Memorandum of Understanding (MoU) with Yacimientos Petroliferos Fiscales, Sociedad Anonima (YPF SA), Argentina to enhance cooperation between the two companies in the energy sector.
12. ONGC has also held discussions with the American oil and gas giant ExxonMobil, the Norwegian energy multinational Equinor, the American oil services conglomerate Baker Hughes, the French research organization Institut Français du Pétrole on various issues like Technology, and Deepwaters.
13. ONGC Tripura Power Company Limited (OTPC) signed a Memorandum of Understanding (MoU) with Assam Power Distribution Company Limited (APDCL) in Guwahati to develop the Battery Energy Storage System Project of capacity up to 250 MW / 500 MWh in a phased manner in Assam. An investment of Rs 2,000 crores will be made in the state for developing the project.

In last 3 Years the stock gave a return of 178.93% as compared to the rise of Sensex and Nifty in the same period.

ONGC group has a well-diversified portfolio in Oil, Gas and other renewable energy businesses. Company’s overseas presence and partnerships with international companies helps it to stay ahead of the curve. Considering company’s proven growth over the years, dividend paying company, its global presence, MOUs signed by the companies, various Association, JVs and Subsidiaries for various businesses and ambitious plans of greener portfolio in upcoming years, investors can invest in this company with buy in dips strategy.

HET ZAVERI

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