Bumper Performance

Maharatna ONGC, India’s largest crude oil and natural gas company contributing around 70 per cent to India’s domestic production, is ranked fourth in the BW Real 500 companies list for the fiscal year 2021-22. The year under review turned out to be the best for ONGC, with the company clocking its highest revenue and net profit. Last year, the company was placed third in the same rankings. 

Record Numbers

ONGC’s record profitability in FY22 was mainly on account of the best-ever price that the company realised on the crude oil it produced. On a standalone basis, it saw a 258 per cent jump in profits to Rs 40,305.74 crore from Rs 11,246.44 crore in the previous financial year. On a consolidated basis, after including the earnings of its subsidiaries like HPCL, MRPL and ONGC Videsh, the net profit soared to Rs 49,294.06 crore in 2021-22 as compared to Rs 21,360.25 crore in 2020-21. For FY22, ONGC clocked the second-highest net profit both on a standalone and consolidated basis. 

In FY22, ONGC earned an average of $76.62 for every barrel of crude oil it produced and sold in the fiscal as against $42.78 per barrel net realisation in the previous year. This was the best ever price that ONGC commanded as international oil prices surged from late 2021 and spiked to a near 14-year high of $139 per barrel after Russia invaded Ukraine. 

"Our resilience helped us adapt to the challenges and register outstanding performance despite all the difficulties, which is a testament of the character and resolve of our people to ensure uninterrupted supply of energy,” Alka Mittal, Chairman & Managing Director (Addl. Charge) said. During the period under review, Mittal was the CMD. Her tenure was extended till end-August 2022. 

In December, the central government appointed Arun Kumar Singh, ex-CMD of BPCL, as the full-time CMD of ONGC for a three-year period. 

Year of Achievements

ONGC said its reserve replacement ratio (2P) from domestic fields (excluding joint venture fields) was 1.01. This is the 16th consecutive year when ONGC achieved an RRR (2P) of more than one. What does this mean? The reserve-replacement ratio (RRR) is the amount of oil added to a company's reserves divided by the amount extracted for production and is a metric used by investors to judge an oil company's operating performance. 2P reserves are the total of proven and probable reserves. Proven reserves are likely to be recovered, whereas probable reserves are less likely to be recovered than proven reserves. The sum of proven and probable reserves is represented by 2P.

Under seven Open Acreage Licensing Policy (OALP) bid rounds, ONGC netted 45 out of 134 exploration blocks awarded to various E&P operators. "We have initiated the process of acquiring 70,000 LKM 2D seismic data in eastern and western offshore areas under central government funding. Also, in order to bring Andaman Basin under accelerated exploration, activities on the National Island Exploration Project have been initiated by ONGC," Mittal said. 

Subsidiaries Perform Well Too

ONGC's overseas arm ONGC Videsh (OVL), a wholly-owned subsidiary, performed very well despite various global constraints. Production from overseas assets in FY22 was 12.330 MMTOE compared to 13.039 MMTOE achieved during FY21. The decline was mainly due to production cuts announced by OPEC+ countries which restricted production from some of its major projects.

HPCL, another subsidiary, achieved combined refining throughput of 13.97 MMT. With highest-ever LPG sales of 7.7 MMT in FY22, HPCL continued to be India’s second-largest LPG marketer. HPCL recorded a revenue of Rs 8,73,896 crore and profit after tax (PAT) of Rs 6,382.6 crore. HPCL also crossed a key milestone of 20,000 retail outlets with 1,391 retail outlets commissioned during FY22.

Alka Mittal, Chairperson & MD (Addl. Charge), Oil & Natural Gas Corporation 

Total Assets: Rs 5,85,449 crore

Total Income: Rs 5,39,199 crore

Operating Profit: Rs 54,091 crore

Net Profit: Rs 49,294 crore