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In this interview, ONGC’s Chairman and Managing Director, Shashi Shanker explains how the former monopoly player is holding its own in the era of deregulation, and on the challenges ahead. Excerpts:
How is ONGC thriving even in a market economy?
ONGC is an integrated oil and gas company which has developed in-house capabilities in all aspects of exploration and production (E&P) business, related oil-field services, and the downstream sector.
ONGC’s home-grown talent is reflected in all fields of its operations and R&D is its strength. Our strategic planning, efficient business processes, international presence and effective induction of latest technology to explore challenging acreages have helped us stay on the growth trajectory. These factors have helped us consistently maintain rolling average of the finding cost which is better than most major international upstream operators and has enabled us to stay competitive even in the open economy.
What are the challenges and transformations that the company has undergone?
The uncertainty in the E&P business itself is a challenge. From being a monopoly to competing with a number of private and foreign players has been a challenge for ONGC. However, with its vast talent pool and expertise across the E&P business chain, the company has made steady progress in the new turf as well.
In 2003, ONGC integrated its downstream refining business by taking over MRPL and later HPCL in 2018. This helped ONGC manage cyclical risks of the E&P business. Our foray into gas-based power sector in Tripura by setting up OTPC helped us monetise our stranded resources strategically. Similar transformations took place in other verticals too. Inducting state-of the-art technologies, digital automation to monitor and control field performances and digitising business operations have helped ONGC stay ahead. ONGC is one of the most profit-making PSUs and has contributed over ₹10-lakh crore to the exchequer since inception.
What’s next?
ONGC has drawn up an ambitious Energy Strategy 2040, which will help the group to double production in upstream across domestic and international market; treble revenue distributed across its other businesses; increase PAT by four times with 10 per cent contribution from non-Oil & Gas business and increase market cap by 5-6 times.
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