ONGC::Takeaways Motilal Oswal Annual Global Investor Conferences

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Key Takeaways
Core essence
 Positive on government policy changes, which will be favorable to the sector and
the company, primarily due to increased awareness of negative impact of ad-hoc
subsidy burden.
 Expects the government to limit upstream subsidy sharing at 33%.
 Current global economic uncertainty could weaken oil price, which would be good
from the under-recovery perspective.
Industry insights
 Global oil demand growth of 2.4% in 2010 was the second highest in the last 30
years, primarily led by emerging markets.
 Domestic oil production increase in FY11 limited the increase in oil imports.
Nevertheless, import dependency remains high at ~77%.
Company vision and strategy
 Increasing E&P expenditure in its large domestic acreage.
 Continued IOR/EOR activities to sustain current production. ONGC has a commendable
record of maintaining production as against 9% decline witnessed in mature non-
OPEC fields.
 Looking at increase in oil and gas production through marginal field development,
which will become economically feasible at higher oil and gas prices.
Key triggers/milestones/challenges
 Likely subsidy rationalization by government.
 Expect one-time gain post resolution of royalty issue with Cairn India.
 APM gas price hike in the medium to long term.


Mr Ajit Kumar Hazarika,
Chairman and Managing Director of
Oil and Natural Gas Corporation
(ONGC), has over three-and-a-half
decades' experience in the upstream
oil and gas business. A Mechanical
Engineer, he joined ONGC in 1976
and joined the ONGC Board as
Director (Onshore) in September
2004. He assumed his current office
on 1 February 2011 in addition to
the responsibilities of Director
(Onshore).
He is also Chairman of ONGC Videsh
Limited (OVL), Mangalore Refinery
& Petrochemicals Limited (MRPL) and
six other ONGC Group companies
(OPaL, OMPL, MSEZ, OTPC, OMEL
and OTBL).
Mr Hazarika, Chairman of Petrotech
Society, is also a member of the
Governing Council of Petrofed. He is
Chairman of the Working Group for
UCG (Underground Coal
Gasification) constituted by the
office of Principal Scientific Advisor,
Government of India and Indian
representative of the Oil & Gas Subcommittee
of International M2M
(Methane to Market) partnership
under the United States
Environment Protection Agency,
nominated by the Ministry of
Petroleum & Natural Gas.