Courage to Explore, Knowledge to Exceed, Technology to Excel

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Courage to Explore, Knowledge to Exceed,
Technology to Excel
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ONGC Song
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Courage to Explore, Knowledge to Exceed,
Technology to Excel
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Investor Analyst Meet Mumbai June 27, 2006
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Presentation overview

• Highlights
• Performance
• ONGC
• OVL
• MRPL
• Group
• Initiatives
• Strategic pursuits

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Highlights
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A New Mission

• I would suggest ONGC to give world leadership in
  management of energy source, exploration of
  energy sources, diversification of energy
  sources, technology in underground Coal
  Gasification and above all finding new ways of
  tapping energy where ever it is, to meet the ever
  growing demand of the country.
• Dr. APJ Abdul Kalam
• President of India
• 14th August 2005

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ONGCs attractive position
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Navratna PSE with 50 years of industry experience
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Dominant position in Indian Oil Gas operations
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Highly attractive international portfolio
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Very low financial leverage and financially sound
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Strong partnerships with Global Oil Gas majors
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Strong government support
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Capable Management team
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Mission vision
Cornerstone of success
Oil gas company of global standards
Commitment towards excellence
Dynamic and progressive
Good corporate governance
Consolidate dominant position in the EP
and integration into refining marketing
activities
Professionally managed company, competitive
mission to build a global integrated oil gas
major
Provide added value to all stakeholders
support national economic growth
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Highlights ONGC

• Highest ever profit
• PAT Rs 14,431 Crore up 11
• Gross Income 50,556 Crore up 4
• EPS 101.20 up 11
• Dividend 450

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Highlights OVL
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Highlights MRPL
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Highlights ONGC Group
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ONGC Moodys Credit Rating

• Indicative Foreign Currency debt rating Baa1
• (Two notches higher than Sovereign Rating)
• Local Currency issuer rating A2
• (Six notches higher than Sovereign Rating)
• Outlook Stable

Highest ever credit ratings assigned by Moodys
to any Indian Corporate.
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ONGC CRISIL ICRA Rating

• Highest applicable ratings for
• domestic companies by CRISIL and ICRA
• CRISIL AAA
• ICRA LAAA

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Shareholding Pattern
(As on 23rd June 2006)
FIIs shareholding increases to 9.52
Percentage
FIIs holding in
IPO
Paid-up Share Capital Rs.1,425.93 Crore
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ONGC share price vs NIFTY
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New Finds/ Reserve Accretion
10 New oil gas finds in 2005-06
Reserve Accretion 51.53 MTOE
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OVL

• 9 acquisitions in 05-06 against 6 in 2004-05
• Sakhalin-1 goes on stream in October 2005,
• the 3rd Producing Asset for OVL
• Syria, the 4th producing Asset
• Maiden venture in Latin America (Brazil)
• OMELs maiden venture in an international bidding
  round, gets two blocks in Nigeria

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MRPL First in India to produce Euro III quality
MS HSD Ready to commence production of Euro-IV
HSD
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Awards Accolades
256th in Forbes Global 2000 list (Mar, 2006),
Topper from India
454th in FortuneGlobal 500 95th in
FortuneGlobal 100 (July, 2005)
PFC Energy 50 18th among top 50 publicly traded
Global Oil Gas Companies (Jan, 2006)
Financial Times Global 500 158th among the
worlds largest companies (June, 2006), topper
from India
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Awards Accolades
Moitlal Oswal CNBC Biggest Wealth Creator among
Indian Companies (Nov, 2005)
BT Most Valuable Company in India (Nov, 2005)
ET 500 No.1 by Market Cap Net Profit (Feb,
2006)
No.1 in Business Indias Super 100 list (Nov,
2005)
Businessworld-IMRB survey (June, 2006) Most
respected PSU
Best PSU Peoples Award for Excellence in
Business Economy 2006, by Planman Media (June
2006)
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Awards Accolades
Golden Peacock Award 2005 for Corporate Governance
Golden Peacock Global Award 2005 for Corporate
Governance (May, 2006)
Amity Corporate Excellence Award (Feb, 2006)
TERI Award for Corporate Social Responsibility
(May, 2005)
National Award for Excellence in Cost Management
(Dec 2005)
Enterprise Excellence Award by Indian Institution
of Industrial Engineers (May, 2006)
All India Public Sector Sports Promotion Board
the best sports promoter among all PSUs
(24.06.2006).
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Performance 2005-06
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ONGC 2005-06
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Reserve Accretion

• Oil Oil-equivalent Gas
• Production 46.97 MTOE
• Reserve Accretion 51.53 MTOE

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NELP-V

• ONGC awarded
• 8 out of 20 Blocks
• Deepwater 2 Blocks (out of 6)
• Shallow water 2 Blocks (out of 2)
• Onland 4 Blocks (out of 12)
• 59 out of 108 Blocks (50) awarded in Five NELP
  rounds

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ONGC Oil production (MMT)(excluding PSC JVs)
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ONGC Gas Production (BCM) (excluding PSC JVs)
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ONGC OOEG Production (MMT) (excluding PSC JVs)
48.74
50.25
49.64
49.45
46.97
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ONGC Gas Sales (BCM) (excluding PSC JVs)
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ONGC VAP Production (MMT)
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PSC JVs Production (MTOE)
2.97
3.25
4.32
3.78
4.14
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ONGC Financials 2005-06
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Gross Income (Rs Crore)

• Highest ever Gross Income
• Up 4

CAGR 20.6
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Net Profit (Rs Crore)

• Highest ever Net Profit
• Up 11

CAGR 23.5
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Capital Investment

• Again highest ever by any Indian Corporate

CAGR 30
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Capex analysis
99.7 on EP
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How each Rupee was earned
2004-05
2005-06
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Return on Capital Employed
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Current Ratio
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Debt-Equity Ratio
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Earning per Share
Highest ever Earning per Share
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Book Value
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Contribution to Exchequer (Rs Crore)
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Dividend

• Highest ever by any Indian Corporate
• Dividend to Govt. of India 4,757 Crore

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ONGC Videsh Ltd. 2005-06
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ONGC Videsh Ltd.
21 Projects (31 Blocks) in 13 Countries
2006-07 OVL in Brazil OMEL in Nigeria
Includes Sudan Pipeline project
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OVL

• 9 acquisitions in 05-06 against 6 in 2004-05
• Sole Operator in 8 Assets
• Joint operator in 2 Assets

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OVL

• October 2005 Sakhlin-1 goes on stream
• 3rd Producing Asset
• Full oil production by 1st Qtr. 2007
• OVLs share 50,000 bpd (oil only)

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OVL

• Syria the 4th Producing Asset
• Transactions completed on 31st Jan 2006
• Purchase retrospective to 1st July 2005
• JV with CNPC

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OVL

• OVLs share of Production
• Greater Nile Project 3.413 MMT of oil
• Vietnam 1.672 BCM of gas
• Syria 0.957 MMT of crude oil
• Sakhalin Limited oil and Gas production

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OVL

• OVLs Reserve Replacement Ratio 2.3
• Holds 1.519 billion barrels of proven oil and
  gas reserves
• Added 107.5 million barrels OOEG reserves in
  05-06
• 22.8 million barrels OOEG 4 PSCs in Syria
• 83.68 million barrels OOEG commercial
  discoveries

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OVL
OOEG Production up 25
0.25
3.87
5.06
6.34
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OVL

• Turnover up 36

Rs Crore
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OVL

• Net profit up 18

Rs Crore
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OVL in Brazil

• OVLs maiden entry in Latin America
• 15 stake in BC-10 deep water block, Brazil
• Potential production 100,000 bbls/day

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OVL in Sudan

• 741 Km (12 dia) Product pipelineKhartoum
  Refinery to Port Sudan
• Project contract price USD 194 MillionCompleted
  2 months ahead of schedule
• in August 2005

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OMEL in Nigeria

• OMEL won two prospective oil gas blocks in
  Nigeria 2006 Mini Bid Round
• Maiden venture in an international bidding round

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MRPL 2005-06
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• MRPL
• Best in Energy Management
• Remarkable Turnaround Management
• Exports doubled
• Direct sales go up
• Distillate yield improves

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MRPL

• Highest capacity utilization 125

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MRPL

• Turnover up 36

CAGR 49
Rs Crore
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MRPL

• Net profit down 58

Rs Crore
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MRPL
Highest-ever Export Sales Export sales increased
by 94 2006 Rs 11,917 Crore FY 2005 Rs 6,191
Crore
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MRPL Debt/Equity ratio
Debt/Equity ratio reduced 31st March 2003
9.71 31st March 2006 0.821
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MRPL
MRPL Board recommended dividend of 7 (Rs 140
Crore) for 2005-06
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MRPL Refinery upgradation expansion 9.69 MMTPA
to 15 MMTPA Investment Rs 8,000 Crore
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• MRPL
• At 15 MMTPA Capacity
• 84 distillate yield out of crude run
• Improved yield pattern/ product range
• Increased capability to use cheap, heavy, sour
  high TAN crude oil

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• MRPL
• At 15 MMTPA Capacity
• integrated Aromatic Complex 0.9 MMTPa Px
• _at_ Rs 5000 Crore
• Integrated Olefin Complex _at_ Rs 12,000 Crore
• (under feasibility study)

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• MRPL received
• Jawaharlal Centenary Gold Medal for Energy
  Management, 2nd consecutive year, from CHT,
  MOPNG
• Golden Peacock Award for best Environment
  Management
• Best safety managed refinery, 5 Star Rating from
  British Safety Council

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ONGC Group 2005-06
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ONGC Group

• Oil production down 3.6

26.30
27.76
31.14
31.86
30.69
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ONGC Group

• Gas production up 1.2

25.42
25.99
26.16
26.43
26.75
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ONGC Group

• OOEG production down 1.5

51.72
53.75
57.29
58.30
57.45
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ONGC Group

• Turnover up 19

Rs Crore
CAGR 33
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ONGC Group
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ONGC Group

• Net Profit up 7

Rs Crore
CAGR 25
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ONGC Group

• Net worth up 17

Rs Crore
CAGR 19
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Concerns
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Concerns

• Subsidy payout
• Gas pricing

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Subsidy payout

• Sharing subsidy on price sensitive petroleum
  products with downstream oil companies

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Gas pricing

• ONGC gets USD 1.75/mmbtu
• (USD 1.05/mmbtu in NE)
• whereas PMT JV gets USD 4.75/ mmbtu

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Initiatives
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• MUT Gas Trunk Pipeline
• Commissioned on 15th July 2005

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• Shallow gas exploration
• Cambay KG basins
• Cambay Confirmed presence of commercially
  exploitable gas in Ankleshwar field
• KG Data acquisition in progress

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• Sea-bed Logging
• Contract awarded to M/s EMGS, Norway
• API on all 12 SBL prospects completed
• 2 additional prospect identified and survey in
  progress

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• Integrity Pact
• implemented from 1st July 2005
• - First in India

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• Collaboration with
• Ente Nazionale Idrocarburi (ENI), Italy
• deepwater EP in India
• third country opportunities
• technical cooperation

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• Collaboration with
• Norsk Hydro, Norway
• deepwater EP in India
• third country opportunities
• technical cooperation for thin oil recovery

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• M/s Cameron
• Service facility of Central Workshop, Vadodara

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• Domain Experts for
• Seismic interpretation process validation,
• Basin modeling, Petroleum system analysis,
  advance reservoir characterization,
• sequence stratigraphy

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Corporate Commitment
Quality, Health, Safety Environment

• 100 accreditation of all operational
  installations and facilities obtained and
  maintained

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Strategic Pursuits
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Strategic Pursuits
Monetizing Assets
Assetizing Money

• Stabilizing output from producing fields
• Bringing New Marginal fields into production

• New facilities
• Facility renewal
• Value addition
• New business
• Acquisitions

Chasing Molecule
Clean Coal opportunities

• Power OTPC, Wind Power
• Refinery MRPL Expansion, KRPL, RRL
• SEZ- Dahej, Mangalore, Hazira
• Retail marketing

• CBM production from 2007
• UCG production from 2008
• SCG Collaboration with Shell

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Monetizing Assets
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Stabilizing output

• Mumbai High oil production

had peaked _at_ 470,000 bopd in 1985 had
progressively dropped to 210,000 bopd in
2000-01 was restored to 270,000 bopd in
2005-06 HIGHEST IN EIGHT YEARS Current level
252,000 bopd
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Stabilizing output

• Mehsana Asset

producing _at_ 47,450 bopd Highest in 11 years
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Stabilizing output

• Ahmedabad Asset

producing _at_ 35,000 bopd Highest in 39 years
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Stabilizing output

• Ankleshwar Asset

producing _at_ 43,000 bopd Highest in 3 years
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New fields

• Western Offshore D-1 field

went into production in Dec05 currently _at_ 14,000
bopd
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New fields
Vasai East, Western offshore Recoverable
reserveOil 6.19 MMT, Gas 3.2 BCMProduction
to begin 2008
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Marginal fields

• Bringing Marginal fields into production
• Service contracts awarded for
• 8 onshore and 3 offshore fields
• 28 offshore fields to be developed departmentally
• 18 onshore marginal fields on offer
• Investment Rs. 12,700 Crore

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Assam Renewal Plan

• Rs 3,300 Crore proposed to be invested
• over 2005 thru 2008
• to restore oil production to 3 MMTPA
• effective 2009-10

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Assetizing Money
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• 12 Mega Construction Projects
• worth USD 2.054 Billion
• awarded in 2005-06

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Major Projects EP
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Major Projects EP
IOR/ EOR Projects under implementation (Rs 12,054
Crore)
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Project SCADA

• Estimated investment Rs 281 Crore
• to operate every well as Profit Centre
• through real-time monitoring optimization
• Keystone to efficient production

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Technology Induction

• Seismic Acquisition, Processing Interpretation
• Drilling related services
• Logging, Well Stimulation, Well Control
• Info-com applications
• Facilities Logistics

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Seismic API Technology induction

• Q-Marine, GXT,
• Seismic Vessel - MV Sagar Samiksha
• Multi-component Seismic survey
• EM Pulse source, Virtual Drilling
• RTOC, Air Borne Electromagnetic survey
• 4C-4D Project
• Digital oil field monitoring
• Digital Geophone
• Accelerated Weight Drop

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Drilling Field Services Technology

• Drilling Hi-Tech, Multilateral, ERD Side Track
  wells
• Non-damaging fluid
• Low Toxicity Synthetic Oil Based Mud (LTSOBM)
• Hydraulic Stage Collars
• Riser-less drilling
• Expandable casing
• Medium Radius Drain Hole (MRDH)

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Production Technology

• FPSO
• Intelligent well completions, segmented
  completion
• Onshore control room for offshore operations
• Dispersible smart plug
• New generation PWC-CFU
• Produced water re-injection
• Custody transfer meter
• Jack-up facility for B-173
• H2S scavenging for B-173
• Intelligent platform

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New Business Power

• 1,110 MW power
• generation transmission in Tripura
• 250 MW power merchant sale ex Western offshore
• 2 x 50 MW Wind Farm in Gujarat Karnataka

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• Mangalore SEZ Ltd.
• incorporated on 24th Feb 2006
• ONGC Equity 26
• Petrochemical complex, LNG, C2-C3, Power Plant,
  Services etc.

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• Aromatic Complex, Mangalore SEZ
• Project cost Rs. 4,900 Crore
• To produce 0.95 MMTPA Paraxylene
• 0.15 MMTPA Benzene

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• Retail Market
• More OVaL by Christmas 2006 Ahmedabad next
• HiQ launch by Diwali 2006
• Mangalore centers by New Year 2007

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Clean Coal Opportunities
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Clean Coal Opportunity

• Coal Bed Methane (CBM)
• Commercial production
• targeted 2007

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Clean Coal opportunities

• Underground Coal Gasification (UCG)
• Collaboration with
• Skochinsky Institute of Mining (SIM), Russia
• MOUs with
• CIL, GSPC, GMDC, NLC

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Clean Coal Opportunities

• Surface Coal Gasification (SCG)
• Collaboration with Shell
• MOU with SCCI on 15th April 2006
• followed by CIL and others

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Thank you
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Courage to Explore, Knowledge to Exceed,
Technology to Excel