CHAPTER - I

OIL AND NATURAL GAS COMMISSION (ONGC) ORGANIZATION AND WORKING

CHAPTER - I

OIL AND NATURAL GAS COMMISSION (ONGC) -ORGANISATION AND WORKING

INTRODUCTION:

The Oil and Natural Gas Commission (ONGC) is the

premier state owned oil enterprise which is mainly responsible

for exploration development and production of hydrocarbon

resources in India. ONGC was found in 1956 as a Directorate in

the Ministry of Natural Resources & Scientific Research and was

upgraded to Oil & Natural Gas Commission - statutory body - by

an act of time, the commission has assimilated world's finest

petroleum expertise and operates along the lines of renowned

international petroleum companies in the world. It is one of

the few oil companies of the world engaged in every aspect of

oil exploration and exploitation in the most diverse geographi­

cal conditions. Recently, the ONGC has become a limited company

under the Companies Act 1958. In view of its vast potential,

this chapter is devoted to analyse the structure working and

role of ONGC in the production and distribution of oil.

STRUCTURE AND ROLE:

ONGC has complet in-house capability, high degree of

expertise, professional experience and necessary ini'ra-

structure to undertake exploration ventures, job contracts and

consultancy services, singly or jointly in India as well as

abroad..ONGC has the unique distinction amongst the developing

nations to diversify its activities and assist other friendly

countries in their programmes of hydrocarbon exploration and

exploitation. In f act,. ONGC has successfully undertaken various

types of consultancy services for National oil companies of

Iran, Iraq, Abu Dhabi, Sri Lanka, Tanzania etc. In addition

ONGC has well equipped institutes for conducting advanced level

research & development in the field of hydrocarbons and also

for imparting training to Indian as well as foreign nationals.

ONGC, for better managerial accountability & profitability, has

grouped its entire activities into two major subdivisions, viz.

functional & supporting. The functional group has been further

studies into exploration, drilling operations & technical

supporting groups are personnel and finance.

ONGC's multi dimentional and multi environmental

experience has led to the development of distructive capabi­

lities and skills. ONGC undertakes geological, geophysical and

geochemical surveys, wild cat drilling, prospect analysis

formation evaluation, biostratigraphir analysis, geochemical

studies, basin evaluation, estimation of geological and

recoverable reserves, reservior modelling, application of

secondary recovery & EOR techniques to increase the recoverable

1. ONGC Videsh Limited, Exploratidn & Exploitation of Hydt-ocarbons, 1989, New Delhi.

reserves & production preparation and monitoring of development

schemes, repairing of sick wells stimulation techniques, long

distance transportation of oil & gas (both onshore and

offshore) production of L.P.G. from natural gas, erection and

maintenance of sweeting plant for treating sour gas and

training of manpower, application of computer in petroleum

industry. Today equipments of considerable value are owned and

operated by ONGC including seismic vessels, drilling ships,

jackup rigs, multipurpose support vessels, helicopters and

L.R.G. plant among others. It has also encouraged indigenous

enterprises to manufacture the equipments needed for its

operation like well platforms, process platforms, onshore

drilling rigs, pumps and compressors etc.

ONGC operates its own 85 onshore drilling rigs, nine

offshore drilling vessels, a number of conventional analog and

digital open hole logging units, workover rigs, drill stem

testing (DST) and mud logging units. ONGC's exploratory and

production wells are drilled under the close supervision of its

petroleum engineers, geologists and drilling engineers in a

cost effective manner. ONGC has got varied experience of

drilling under different geological/geographical domains like

highly dipping areas, high temperature and high pressure zone,

structurally complicated areas, hilly terrain, deserts sand

dunes,'marshy land and shallow to deep waters (upto 400 mts.

water depth) and shallow to super deep depths upto 6 kms.

ONGC has developed techniques for the formulation of

completion fluids for any formation, selection of packer

fluids, perforation techniques and for whole and surface well

completion equipment design. It has developed expertise in

assessment of fracture pressures and in establishing appro­

priate pressure control. Also ONGC has extensive experience in

directional drilling (including horizontal drilling) and drill

stem testing. ONGC has to its credit the discovery and

production of hydrocarbons from a wide range of conventional

and unconventional reservoirs right from the antidines, fault

closers to stratigraphic traps to fractured besement. It

produces hydrocarbons from shallow depths to deeper depths.

ONGC has put some of its fields on dual completion i.e.

producing hydrocarbon simultaneously from two different pay

zones. ONGC had developed capabilities and accumulated rich

experience in conventional as well as complex facets of

production, reservoir and chemical engineering, including oil

and gas field gathering systems, oil, water and gas processing,

workovers, completion procedures, artificial lift and all

primary, secondary and tertiary recovery techniques.

OBJECTIVES OF OIL & NATURAL GAS COMMISSION (ONGC):

1. To promote self-sufficiency in crude oil and

natural gas.

2. To promote self-reliance in technology.

3. To assist in conservation of oil more efficient

use of Energy and Development of alternate sources

of Energy.

4. To make regular efforts for new exploration areas.

5. Promoting, indigenous efforts in oil related

equipment and services.

6. To make long term planning for oil sufficiency.

7. Obtaining its share in the world oil market.

8. To achieve maximization of the rate of return on

investment.

9. To build up relevant technology and techniques,

in oil exploration practices.

10. Generation and maximisation of internal financial

resources, for its own growth and development.

11. Environment protection.

ORGANIZATION:

An individual is unable to fulfill his needs and

desires alone because he has limited strength, ability, time

and potentials. So he seeks the cooperation of other persons

who have certain common interests. This gives birth to an

organization.

1. Singh, B.P. & Chabbra, T.N., Fundamental of Business Organization, 1981, p.112.

Generally, the term 'organization' means an organi­

zation structure which consists of the (1) division of labour

and division of activities, (2) determination of responsi­

bilities, (3) delegation of authorty, (4) coordination of

different activities, (5) effective communication and

flexibility.

Yodder has mentioned that from ancient to modern times,

rulers, owners and managers have always organized their

resources. In the process they have created organizational

structures, some small and simple, other large and complex.

In industrial societies, work takes place largely in complex

working organizations which combine the contribution of dozens,

hundreds or thousands or workers.

Organization is the process of identifying and grouping

the work to be performed defining and delgating responsibility

and authority and establishing relationships for the purpose of

enabling people to work most efficiently together in accomp-2

lishing objectives. Organization generally, means a form of

human association for the achievement' of common goals.

Organization structure has been playing a very Important role

in every walk of life. Good management, tlierefore, alw.ivs

1. Dale Yodder, Theories of Organization, Personnel Management and Industrial Relations, Prentice Hall of India, New Delhi, 1972, p. 94.

2. Allen, Louis, A. Management and Organization, New York, McGraw Hill, 1958, p. 57.

concentrates on organization and directing the cooperative

efforts- of human beings so as to achieve the best possible

results .

Organization is a basic function of management. By

performing this function, the management brings together the

human and non-human resources to form a manageable unit. Such a

unit taken as a whole is identified as an organisation.

Organisation helps in planning, stuffing, directing and

controlling. Organisation may be described as the backbone of

management. Without efficient organization no management can

perform its functions smoothly.

Organization as a function of management involves

identification and grouping the activities to be performed and

dividing them among the individuals and creating authority and

responsibility relationships among them.

Organization has been defined in many ways. Some

authors have defined organization in a general and wider sense.

According to Henri Fayal , "To organise a business is to provide

it with evpry thing useful to its functioning raw materials,

tools, capital and personnel." According to Barnard, "An

organisation comes into existence when there are a number of

persons in communication and relationship to each other and are

willing to contribute towards a common endeavour."

1. Singh, B.P., Fundamentals of Business Organisation, p.112.

2. Singh, B.P. & Chhabra, T.N., Ibid., 1981, pp.111-12.

8

ORGANIZATIONAL STRUCTURE:

The word 'organisation' is also used in the sense of a

structure of relationship. These relationships are among

various positions and jobs in the organization. The concept of

organisation structure is somewhat abstract and illusive. In a

simple sense, organisation structure means the predetermined

patter of relationship among various components or parts of the

organisation structure prescribes the relationship between

various positions, activities, authority and the responsibility

compared on each organisation structure is the basis of the

enterprise. Structure in modern organisation is designed even

before people are appointed to fill various positions in it.

Organisation structure is a pictorial representation of

the physical constitution of the business. This consists of

structure of relationships, responsibilities and authorities

through which a business can achieve its objectives. to

achieve the objectives of the enterprises it is necessary to

assign duties and responsibilities to every individuals or

group of men comprising the organisation and control and

coordinate the various activities. A pattern of relationship

amongst these groups and individuals in the group has to be

established for integrating and coordinating their activities

in perfect harmony. Organisation can be defined as a process of

establishing the pattern of relationship by assigning duties

and responsibilities to each department, section, group and

individual of an enterprises, clearly demarcating, the

authority, responsibility and duties of each and providing the

channel of communication and coordination to achieve the

objective of the concern.

Strauss and Sayles have defined organisational

structure as more than a series of inter-connected boxes and

2 lines on a chart. The organisation structure also comprises

the formal communication network of the business through which

decision and instructions flow downwards and reports flow

upwards as feedback for managerial control. There are so many

types of organisational structure viz. functional types, line

types, line and staff types and matrix structure.

We talk of the organisation structure of a certain

business as though it were something which exist of its own

right but in fact what we really mean is no more than a certain

pattern of responsibilities, in other words, a framework within

which, and by means of which, the process of management can be

carried out. Organisation structure is therefore the purpose of

helping along a certain process and thus is, in its essence, a

secondary thing. The structure of organisation of an enter­

prises is the framework for carrying out the responsibilities

1. Dalta & Basu, Works Organisation & Management, Oxford IBH Publishing Co., New Delhi, p.

2. Strauss and Sayles, Personnel: The Human Problems of Management, Prentice Hall, New Delhi, 1968, p.365.

10

of management, for the delegation of such responsibilities, for

the. coordination of activities or operations, and for the

motivation of members.

Organisation structure has been playing a very

important role in every walk of life. Good management,

therefore, always concentrates on organisation and directing

the cooperation efforts of human beings so as to achieve the

best possible results. Organisation, in simple sense, means, a

form of human association for the achievement of common goals,

organisation is the mechanism through which management

functions and controls the enterprises. It is the backbone of

the management and without its proper care at higher, middle

and lower levels of administration, it would be very difficult

for management. It is the foundation of management. Development

of human resources determination and grouping of activities,

allocation of responsibilities and delegation of authority and

division of labour are possible through organisation which is

very important for the smooth running of enterprise as well as

society. Organisation lays the basis for other managerial

functions such as planning, coordinating, direction and

control.

1. Brech. Organisation. Hazell Watson and Vlney Ltd., 1957, p.10.

11

ONGC ORGANIZATIONAL STRUCTURE:

The Oil and Natural Gas Commission (ONGC) was formed on

October 15, 1959 under an act of Parliament to take over the

activities of the Oil & Natural Gas Directorate set up by the

Government of India of 1956.

In 1955, the Government of India decided to undertake

exploration and development of Oil and Natural Gas resources in

the various regions of the country in the public sector. An Oil

& Natural Gas Directorate was, therefore, set up towards the

end of 1955, as a subordinate office under the then Ministry of 2

Natural Resources and Scientific Research.

Soon after the formation of Oil & Natural Gas

Directorate, it became apparent that it would not be possible

for the Directorate, with the limited financial and adminis­

trative powers, as a subordinate office of the Government to

function efficiently in its task of oil exploration and

production. To overcome this difficulty in August 1956, the

Directorate was reconstituted as the 'Oil & Natural Gas

Commission' with enhanced powers, although it continued to be a

subordinate office of the Government. In October 1959, the

ONGC Hand Book, Institute of Management Development, Dehradun, p.. 1.1

Personnel Policy Hand Book, Dehradun, 1989, p.5.

12

Oil & Natural Gas Commission was converted, into a statutory

body, by an Act of Parliament, which enhanced the powers of the

commission still further.

It's corporate structure consists of a chairman and not

less than two and not more than eight other members appointed

by the Central Government. One of the Members is a whole time

Finance Member incharge of its financial matters.

The commission is at present constituted of the

following:

(a) Chairman

(b) Vice-chairman & Member (Exploration)

(c) Member Drilling

(d) Member Technical

(e) Member Finance

(f) Member Personnel

(g) Member Natural Gas

(h) Two part-time Members representing 2

the Government of India.

ONGC began as a subordinate office of the Government of

India. It was headed by a part-time Chairman who was a Central

Government Minister. There were two members, Member (Technical)

1. Ibid., p.5.

2. ONGC Hand Book, Institute of Management Development, Dehradun, p. 1.1

13

and Member (Finance), two Directors, one for Geology and

another fo.r Geophysics, and an officers on special duty for

drilling and engineering service. As the activities of the

organisation expanded, a full time Chairman was appointed in

1965 that was when exploration was taking place on large areas

onshore and exploration extended into the shallow waters of the

Gulf of Camaby. The major organisational change took place in

2 1975 as suggested in the Malviya Committees Report. A major

change under this set up was the appointment of two exclusive

members for operation onshore and offshore. Overseas operation

was placed under the charge of a General Manager.

ONGC has been able to achieve such a great success in

making the country self-reliant, in fulfilling the petroleum

requirements of the country to a great extent in such a short

period of its operation. This success is partly a result of

ambitious men who are engaged in ONGC and their tireless

efforts, zeal in the production, and partly to sound

organization and administrative structure, which ensures quick

decision making and efficient planning ONGC is a public

corporation which is governed and managed by Parliament through

its executive and. related ministry by giving autonomus powers

in the hands of executive. The main source of planning is the

Twenty Five Years of ONGC, Publication Dehradun, 1956-1981, pp. 5-6.

Ibid.

14

Ministry of Petroleum and Chemicals which is headed by a

cabinet rank minister. He is assisted by a Deputy and a State

Minister each with his respective secretaries and Finance

Ministry. They take decisions and formulate the different

aspects of oil policy. Project the future requirements of

petroleum products in the country, formulate the budget as to

production'and plant about procurement of crude oil etc.

The position and roles of important organisation

members and the persons concerned are summarised below:

The Chairman is the chief decision making person for

all important matters like expansion, production, acquisition

of new platforms, personnel, finance, materials and

exploration. Member of Exploration dealing with all the

exploration activities through Director (KDMIPE), Director

(IRS) and General Manager (Exploration). There is a separate

personnel department to deal with employees of the organi­

zation on personnel matters. The Members n£ Personnel is

assisted by Director (Administration; Director (CR) , Junior

Director, Delhi Office. The member of onshore performs all the

onshore activities like drilling, production etc. Under him

work Director (Operation Review), Director (Operation) Chief

Engineer (Civil). All the offshore activities are performed

under the supervision of member of offshore. Member offshore

is assisted by six persons. General Manager (Operation),

Director (Finance), General Manager (Production) Director

15

(Transport), General Manager (Engineering and Cc-.st ruction) ,

Director (Stores and Purchase).

Member Finance is the head of the Fin-i'-'cp '• •partment .

Three separate departments function under the sapc/vision of

Member Finance i.e. perspective planning cell, Director Finance

and Director (Offshore Accounts and Audits). The member of

materials deal with all important matters about the materials

like purchase and stores and so on. Inspection and Adminis­

tration Director (TPT and Shipping), and Director (Stores and

Purchase) has functional relation to Member of Materials.

The whole project is divided into divisions and

departments. This include the area of Exploration, Drilling,

Engineering, Production, Finance, Stores and Personnel. Each of

these operating divisions and departments is headed by Special

Manager who is responsible for its performance. Ne« jnits ari

defined and functional designations created which are more

consistent with the responsibilities being assigned to the

staff. The basic organisation structure of the ONGC is

presented in the Fig. 1 and Fig. 2.

After having discuss the organisation chart of ONGC, we

have now to discuss the working of ONGC. Rapid industriali­

zation and fast economic development of the country have make

it essential to explore indigenous resources before

independence oil was a myth in India. After the independence

in 1947, the growing need for petroleum products for

•r T/i-

c /J 1-..

i> . J

u

6 •

P. fa

•O " 1/1

0 01 iJ H VI U (U .-3 01 I. C u o u

- 1 l-> U

>

01 C 'H C. = 41

u s p

u O i

u

O J

c. •

t , O - O i .

o u ^ — c

L .

o k J

u O J

^

a> o« L. U

o o ^ ~ b l b l

v ^

. 1 • J

U

u • ;

* j

-( 1

J

c

J j : ^

_ L ,.1 O -.)

H OS

< X

o

z o M

H < CO M

z < o QfS

O

c

« P - f f l

(J

u u Oj O n L:

- r; n •

I. U o o JJ C . u o o c. U T

••-4 M

U -3 'J O O «J « .-J o Cl i : t l W. U U O k. - 1 'J 3 Q VI w

h \

o o . u n -• a u •«

T'

^ b"

01 '£ c T «» c

O -3

u c o o

O 1'

r: u

«| -£ C t o> c

O -5

3 C o o o —

— o

T O - i

c r .1

u

• 41

C - - nj to o ^< u c

f O t , . < <J -1 l ' . I 3 C U -1

0 ;

- O

n b

-

U

o r. t o

F 'J

u u - 4 U

a p. o ^

V , . « 01 k. - 4

• H • £ >

x: ;: H u .Ju

^

tJ o »•> J * j a C(

u u —* 01 0 / >

U p. Oi

? 2 ^ U U o j

a. u • •

v . - - ^

& ^ u o

- a <U

a :5 N , ^

'--

I H

. ]

"

c o

• i - * • N

- a a I . L. O IJ

^ 4 J

u-': X - ' ;d

a

u u o c ^ 01 O -H (J o

n • '

* - > • 3 u

^ H

n u

5 .A

ni U, C 0 1

L I

00 • l - l

d n. I l l

u i

u, 1 ^

n) 1 0

UJ

in

•

r H U > , UJ oj M U 1 0 : i o> IT]

o. c c b 01 (^

C I O ; ;

<o C u o tJ -1

C ' * 0> 01

u j ;

x: u

u--^ « 1 .

Jl 0 ; i ! U 0/ - ^

P * H

u > 3 t T I J

O o U U1

— 1

- - j 1

u O ' ^

t-1 •

u n o • V- : :

- H — '

Q

P O O

c. c c t> Cl r j

o C I : • :

T )

r ra

5 > —

u c f 3

r ~ |

• ^ <

^; •^ »

c o

t ' r j

o p.

'_)

^1 n o »J U OJ

u ^ o> u

l / l O I / l

— 1

1 -U r H O 01

" c o r: o o u w

• ^ «

Q o

~^ 'A

r-l • • •

Xi n 3 . H

u. o •-1

• j j

u C - N

+J .

u n O -4

u II - 1 T ) Q -t

l >

o . ••»

rA O

•o o X ) " • t . 1

Cl

1 - • I . )

* c ^^ o i : - 4

—« • * - ^ r j

#-H

u

^ ( W. ^ 01

;. r>o — 0) (^

z c

I. o <u .< — M -.g

i/l 11 nj . -

I I

r-i

n) ^ !•> C. (IJ

u

u o r: u l

•«: I ,

o . c

C 1 O Oi

* 4 t-i • V" C > O - 4 --«

3 n) a t. S t J Oi l/I U U

c c c o in (D

o c i?

I I I I 4J i J

ot c

• r - (

V-

o

--X

j _ i

QJ

(/) a. 3 E X

1—1

,—1

o

c •r-{

F

3 f — I

o V-u a;

Q-

J

_c L - i

' »-nj

O

in

c o 4-1

cu c

• l - ( X 0)

J

I/)

o

c 3

o "O CJ

N » - i

o X I •rA

U ra

CO

c • r - l

^ <J-T - ^

p

^ 0 0

1 — i

^ a o o

. — 1

o > 0)

4-J

c o u o

U - Q [ -

Oi

u o o

o

o CO < (J3

o<3

O

o

<

o

o l\.

o

00 0^

C

TO

0) Q

x;

o

01 o 1-

o CO

18

industrialization and economic development was felt by Late

Pt. Jawahar Lai Nehru, the first Prime Minister of India and

Late K.D. Malviya ex-Petroleum Minister who developed a plan

for the search of oil in an organised manner.

At the time of independence the country produced only

0.2") million tonnes of oil per year from its field at Digboi in

Assam. More than 907„ of petroleum products requirements were

2 imported.

It was only in August 14, 1956 that the Oil and Natural

Gas Directorate under the Geological Survey of India was raised

to the status of a Commission which was made a statutory

organisation on 15th October 1959. Thus ONGC was formed to

accomplish the task of exploring, drilling, and producing Oil

and Natural Gas. At present the Headquarter of ONGC is located

in Dehradun. In addition, ONGC has regional offices in Bombay,

Baroda, Calcutta, Jammu, Madras, Nazira and some other work

cent'.tes in various other cities of India.

EXPLORATION:

The continuing increase in demand for oil as a major

source of energy for industry, transportation as well as other

1. The Economic Times, New Delhi, Nov. 14, 1989, p.6

2. Ibid.

3. Twenty Five Years of ONGC, op. cit., p.4.

19

sectors in India warrants the need to find and produce more oil

and gas.

"The total area of the sedimentary rocks in India is

17,20,000 square km. of which an offshore area upto a depth of

200 metres amounts to 3,20,000 square km. The >.ot.iy area has

been divided into 26 sedimentary basins of which 12 are of

immediate interest. These 13 basins have been placed in three

categories according to their individual potential. Some other

basins not so prospective are in the fourth category."

An Indo Soviet team of experts put the geological

reserves of oil at 12,700 million tonnes, of which 8,700

million tonnes (697o) are offshore and 400 million tonnes (317o) 2

are onshore.

So far as ONGC alone is concerned, the recent estimates

indicate 18.23 billion tonnes of resources of oil and gas exist

in areas under category I to III basins out of this 5.04

billion tonnes (27.66%) have been proved as geological reserves

Fig. 3 present progonstication anticipates 2/3 of jil and

remaining will be gas. However keeping in pace wi'h discoveries

in global context, this ratio of oil and gas may turn out 3

ultimately to 1:1.

1. The Hindu, Madras, September 1986, p.8.

2. The Geographer, The Department of Geography, Aligarh Muslim University, Aligarh, January 1985, p.47.

3. ONGC, Hand Book, Dehradun, 1991, p. 5.1.

20

CO UJ

£ 2 c c

CO UJ DC >-

So ~ 1X1

i * UJ

a:

^

^ ^ • ^

u^ N

i:t i V .

\ s \ S S S \ S • V s " vvvv * / / • s \ \ \

^

?f7

to a 0) O ^ D O) O 01 1,1

3(1]

/ / / f f / / / / / / / /

X. ( i C.i. C ( C i ( ( ( <. I

'd

3:

»;

SJNNOl NOl'niU

en

O

a.

ON

C D

T3 cc U

(1) Q

•r-l U

O

O o PQ

c CO

X

o

cu u V -3 o

CO

21

The total geological survey involves the use of 367

party years of field work during 25 years. ONGC has conducted a

total reconnaissance geological making of 24,000 sq. kms. of area.The

earth's surface has been examined by traversing 26.6 thousand

line kms and semi detailed and detailed mapping of 1.56 lakh

sq. kms and 41.5 thousand sq. kms respectively. ONGC has

established geological reserves of 3771 MMt of oil and 1271 MMt

of oil equivalent of gas as on 1.1.90. Trends of establishment

of recoverable reserves and balance recoverable :eserve.^- from

1981 onwards are presented in Fig.4. It is evident that within

last 8 years recoverable reserves have almost doubled due to

intensive and extensive exploration activities in all the

basins.

In the year 1986-87 - Fourteen Geological Survey

parties were deployed in onland areas for semi detailed mapping

covering 10,000 square kilometers against 7,830 square kms last

year. In 1987-88 14 geological survey were deployed in onland

areas for semi detailed mapping cover 11955 sq. kms against

10,000 sq. km last year. In the year 1988-89, 14 geological

survey parties were deployed in onland areas for semi d '-tailed

mapping and covered 14313 sq. km. (11955 sq. km InSt year).

In 1989-90 14 geological survey parties were deployed on

onland for semi detailed mapping in different sedimentary

basins covers 14,870 sq. km.

22

tM

(/I LU > az UJ (/) UJ cr X S .. s u. * o s UJ O

O o 2 ^ < s <* > CQ 3 - cr •fl UJ

UJ = - i O

m «• < s 0:9. UJ >

O o

01

2 >% * 8

(S!

r » - . to 4 ^ ^

\

rS

o en

CO

U3

U4 U.

ha

<3 o CO s

o o

»—1 ' o o

— 1 — ^ o o o

s o o m

o

04

in

en

c

w

Q

O O CQ

T) C 03 X

o o o

mvi

23

During the year 1990-91, 51 seismic field parties

carried out siesmic data acquisition work in different onland

basins. These include 7 field parties on contract- Out of 44

onland departmental field parties, 37 parties were deployed for

2 D seismic data acquisition and 7 for 3 D seismic work. These

onland departmental seismic field parties covered 44783 SLK of

2 D seismic data and 631 standard sq. kms. of 3 D data. Area-

wise details of seismic data are given below in table No.l.

TABLE No.l

AREA WISE DETAILS OF SEISMIC DATA

Basin

Cambay

Rajasthan

Uppar Assam

Assam Arakan

Fold belt

Krishna Godavari

Cauvery

Bengal

Himachal Foot Hills Ganga Valley & other Areas Total

Number of Parties Deployed

2D

10

2

-

-

11

4

1

3

6

37

3D

2

-

3 -

2 -

-

7

Achievement

2D 3D (SLK) (S.Sq.Kms)

14598 393

6089

7447 83

7790

1666 166

1538

5655

44783 631

Source: Annual Report of ONGC, 1990-91, Dehradun, p.6

24

In addition to Geological Surveys, Geophysical sur/eys have

also been carried out. The Geophysical surveys invclved used of

181 field party years of gravity-magnetic, 530 party years of

seismic parties on-land and offshore. Geophysical parties have

measured gravity-cum-magnetic data of 2.44 lakh stations in

order to bring out differences in the gravity and magnetic

values at different points of the earth surface to be able to

mark out definite regional structure patterns and the thickness

of the sediments in the area as part of planning for seismic

surveys.

The 7 contracted field parties included 4 Soviet parties

under the intensive integrated exploration programme which

carried out seismic operation in Cambay, Cauvery and Bengal

basins. The party deployed in Bengal Basin acquired data on 3D

mode and the other parties in Cambay and Cauvery acquired data

on 2D mode. The Soviet field parties have already acquired the

seismic data as per contract except for 3D data in West Bengal

and have since been demobilised. In addition, two pole service

parties of Poland continued their work in Cambay and Krishna

Godavari basins. ONGC has already attained self-sufficiency in

processing seismic data subsequent to the installation of 4

regional computer centres at Bombay, Madras, Calcutta and

Baroda and IBM-3083 main frame computer at Dehradun.

25

Apart from this, the projected increase in seismic

surveys which are the same for both variants will be as in

Table No.2.

TABLE NO. 2

PROJECTED NUMBER OF SEISMIC SURVEYS

(in thousands of lime kilometers)

Year

1980-81

1981-82

1982-83

1983-84

1984-85

1985-86

1986-87

1987-88

1988-89

1989-90

West Coast

19.7

15.4

10.0

12.5

15.0

15.0

15.0

15.0

15.0

15.0

East Coast

4.8

4.7

10.3

12.5

15.0

15.0

15.0

15.0

15.0

15.0

Source: The Hindu Survey of Indian Industry, Madras, 1982, p.101.

26

Table No. 3 shows that there were 34 tctaj p.inber of

rigs onland during the year 1981. The total num^e: o' onshore

rigs increased from 34 to 38 at the close of the year 1982 and

38 to 40 in the year 1983. During the year 1984 and 1985 the

total number of onland rigs were 43 and 53 respectively. In the

year 1986 the total rigs were 64 as compared to 43 in the

previous year 1985. The total number of onland rigs increased

from 64 to 82 at the close of the year 1987. Out of these 78

were owned rigs and 4 on contract. During the year 1988 the

total number of offshore rigs increased from 82 to 92 at the

close of the year. Of these, 83 were owned by ONGC and the rest

charter hired. The total number of onland rigs increased from

92 to 104 at the close of the year 1989. Of these, ^1 were

owned by the commission and the rest were supplied by the

contractors on charter hired basis. Of these 104 rigs, 64 were

deployed for exploratory drilling and 40 for development

drilling. During the year 1990 the total number of rigs

increased from 104 to 115. Of these 115 rigs, 75 were deployed

for exploratory drilling and 40 for development drilling. In

the year 1991 the total number of rigs were 106. Number of

rigs both offshore and onland is shown in Fig. 5.

27

CO o Q:

O I l l « » » i i 4 I— \-ma

o DC O

n

a: U-O

o

:- I

o

-I o,

)•; S -I

^ i

\ 1"

-J

O I . I I I I : . . I

o o o o o o o TT CM O CU <D ^ t C\J

O)

o O)

CO

CO CO

CO

CD CO a :

<

m CO ' ^

CO

CO

CO

c\j 00

CO

<

O

Q

<

cr O

c/) ll_

o

00

»—I

i n

a

c P

1-

o Q

Z in O .

CJ

• •r-l U

o

o o CQ

X5 C 03

J)

c

o

o CO

O

28

TABLE NO. 3

EXPLORATORY & DEVELOPMENT DRILLING ONLAND AND OFFSHORE PERFORMANCE OF ONGC FROM 1981 TO 1991

Year

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

Onland

34

38

40

43

53

64

82

92

104

115

106

Offshore

7

7

13

14

13

15

20

26

33

33

35

Total

41

45

53

57

66

7Q

102

118

137

148

141

Source: Compiled and computed by the Research Scholar

from Annual Reports of ONGC (Various issues)

29

MARINE SURVEYS:

In 1963 ONGC started its offshore seismic surveys in

the Gulf of Cambay with the help of vessel "S.S. Mahindra" on

the basis of these surveys, the first offshore structure

Aliabet was discovered at the mouth of Narmada River. Another

offshore structure, Tapti was also delineated. During 1964-67,

regional reconnaissance, with local semi-detailed surveys was

undertaken by the Russian seismic ship,'Akademic Arknangelskey'

in the Gulf of Kutch in parts of the Gulf of Cambay and in

Arabian Sea, in the area off the coasts of Kerala, Gulf of

Mannar, Palk Strait and the Bay of Bengal. This survey revealed

a number of promising structures including Bombay High.

The discovery of oil in the basement of Bombay High has

given a new dimension to the explorating effort with the

possibility of extending the life of the field. All the old

oil fields are being reassessed with the help of new

technologies - To find new oil from the old fields. The possi­

bility of increasing the recovery from the old fields parti­

cularly from Bombay High, is being examined. This would

considerably increase the recoverable reserves from the

existing fields.

OVERSEAS OPERATIONS:

ONGC is providing assistance and cooperation tc* many

countries abroad. It has finalised on exploration and service

3 0

agreement with Iraq. National Oil Company for drilling in

South Western Iraq. Iraq was the first foreign country where

ONGC bagged a contract to explore, develop and exploit hydro­

carbon on land. Seismic field work was started on March 19th

1974. ONGC entered into contract with the Government of

Tanzania for drilling a well at the Songo Songo island. ONGC

has been playing continuously a net worthy role in the

discovery of gas in Tanzania ONGC started drilling at Songo

2 Songo on 18th June 1976. A consultancy contract was signed

with Abu Dhabi National Oil Company on 29th January 1981 for

undertaking a geological study of Jurassices field.'

The overseas group continued to make headway in its

efforts for business abroad with the signing of a contract in

February 1987, for geological consultancy services with Abu

Dhabi National Oil Company for a value of US$1.43 million.

Business development overseas has been engaging the attention

of the commission as well as the Government of India at the

highest level and proposals on a variety of services are under

consideration with several countries such as Iraq, Libya,

Moracco, Vietnam and Tanzania.

1. Twenty Five Years of ONGC, Dehradun, 1981, p.19.

2. Ibid., p. 20.

3. Ibid. , p. 21.

4. Annual Report of ONGC 1986-87, Dehrahun, o. 14.

31

As hydrocarbon reserves of the country are limited and

demands are increasing ONGC has formulated a policy of entering

into exploration contracts with other Governments on profit

sharing basis to supplement indigenous production. Besides, it

would not only expose its geoscientists and engineers to the

international standards but also help them bring an increased

element of quality. Cost and time consciousness Hydrccarbons

India Ltd., a subsidiary of ONGC signed an exploration contract

on profit sharing basis with Petro Vietnam, negotiations with

the Tanzania Government for exploration work are in progress.

ONGC has built up a unique reputation amongst the

developing nations to diversify its activities and assist them

in their programme of hydrocarbon exploration and exploitation.

It has been able to sell its technical capabilities to many

countries and obtain contracts in the face to stiff competition

in Abu Dhabi. Negotiations are also being conducted with

several other countries such as Angola, Iraq, Libya, Qatar,

Sri Lanka, Uganda and Malaysia on services to be offered to

these countries.

ONGC has not only set higher and higher targets in the

successive years for indigenous production it has also gone

abroad for exploration in prospective basins in the developing

countries on production sharing basis and as a partner with

established oil companies to supplement indigenous production.

ONGC Videsh Ltd., a wholly owned subsidiary is handling these

32

foreign contracts. Seismic survey under production sharing

contracts in Vietnam waters was carried out by ves. -el Sagar

Samdhani. ONGC has recently executed consultancy Exploration

and Development Offshore.

EXPLORATION AND DEVELOPMENT OFFSHORE:

Exploration activities are being continuously

increased. Drilling of the first offshore well was started in

1970's at the H" outh of Narmada river in the Gulf of Cambay. In

1974 drilling of the Bombay High was taken up. Discovery of

oil basement of Bombay High augers well for the future. Efforts

were made to develop technology for locating and extraction of

oil from the basement. It also proposed to work out a detailed

plan for exploration in deeper waters.

Table No.3 shows that the offshore drilling performance

from 1981 to 1991. In 1981 the total number of offsho-e rigs

were 7. In 1982 there was again 7 rigs. The total nurber of

offshore rigs increased from 7 Lo 13 at tlie close of the year

1983. In 1984 the total number of offshore rigs were 14.

In 1985 the total number of offshore rigs decreased from 14 to

13. It again increased from 13 to 15 at the close of the year

in 1986. In 1987 on offshore operations, the rigs deployed

increased from 15 to 29 at the close of the year. Of these 20

rigs, 8 were owned rigs and 12 were on charter line. In 1988

the rigs deployed increased from 20 to 26 (including 1 owned

33

rig under repair at the close of the year. The fif-i" indige­

nously fabricated drill ship 'Sagar Bhushan' ...r.s ;•. t into

operation during the year 1988. Drilling operdt:ions were

extended to Kerala - Konkan offshore within the spudding of the

first well on Cochin High Structure. In 1989 the offshore rigs

increased from 26 to 33. Of these 10 were owned by the

commission and the rest were on charter line. Of these 33

rigs, 25 were deployed for exploratory and the remaining for

development drilling. In 1990 the offshore rigs remained 33

throughout the year. Of these 33 rigs, 19 were deployed for

exploratory and remaining 14 for development drilling. In 1991

the total number of offshore rigs were 35. Thus it is observed

from the table that the exploratory and development drilling of

offshore rigs is satisfactory.

ONSHORE DRILLING:

The first exploratory well was started at Jawalamukhi

in 1957. Drilling in the beginning stage was undertaken on

Himalayan foothills, Punjab Plains, Ganga Valley, desert of

Jaisalmer, Assam, Arkan areas and Cambay basin. After this,

interesting structure including Krishna, Godavari and Cauvery

basins, Tripura Cachar etc. were taken for drilling. During the

year 1987-88, ONGC completed drilling of its deepest well at

madhubani in Bihar (5,957 metres). A well with a target depth

of 7000 metres was also stupped during the year near Jammu,

with owned rig.

34

DRILLING:

The drilling performance in terms of metreage drilled,

both exploratory and development, has improved several folds

during 1981 to 1991. Table No.4 indicates that the total

metreage drilled in 1981 was 212 thousand metres, of these 117

thousand exploratory and 94 thousand development. Total

metreage drilled in 1982, 1983, 1984 were 321 thousand, 385

thousand and 468 thousand. Of these, 151 thousand, 176 thousand

and 192 thousand exploratory and 170 thousand, 208 thousand the

275 thousand development. It rose to 441 thousand in 1985, 590

in 1986 and 732 in 1987 respectively. 192 thousand, 209

thousand and 293 exploratory and 275 thousand, 232 thousand and

296 development. Total metreage drilled in 1988 increased from

732 to 842 in 1988 of these 373 thousand exploratory and 469

thousand development. The total meterage drilled during the

year 1989 was 1031 thousand against 842 thousand in the

previous year 1988. Of these 494 exploratory and 537 develop­

ment. During the year 1990 and 1991, the total metreage

drilled was 132.3 thousand metres and 1053.26 thousand metres

off these 605 thousand metres and 470.81 thousand metres

exploratory and the remaining 718 thousand and 582.^5 thousand

metres development. The drilling efficiency in terms of metre/

rig months (cycle speed) registered an improvement of 22.5 per

cent in 1990 over the last year. The actual cycle speed

35

increased from 679 in 1989 to 832 in 1990. The drilling

performance in terms of metreage drilled, both exploratory and

development, is also shown in Fig. 6.

TABLE NO. 4

THE DRILLING METREAGE PERFORMANCE OF

ONGCC FROM 1981 TO 1991

(in 000)

Year

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

Exploratory

117

151

197

192

209

293

333

373

494

605

470.81

Development

94

170

208

275

232

296

399

469

537

718

582.45

Total

212

321

385

468

441

590

732

842

1031

1323

1053.26

Source Compiled and computed by the ReseaTh Scholar

from Annual Reports of ONGC (Various issues)

CO o c - t o ru

O o o X tt> 3 CL

DO O O ?r

o

n

rr

T3

tS5

O

m X Tl

o

o 3D • <

o m • < o m

r-O •V

m

H

O

4; O O

CD O O

CO

00 0 )

CO 4x

CO 01

m OT ^ O) 3]

03

03 00

CD CO

CO

^w^. 01

. . . . . I ''2 -J

\\m\\v\l....!'_, ^

:i CD

fs)

o

WWWWXWl / '

r . I T I W . H I 'O

\\\\\\\\\\\M...^.

\\\\\m\\\m\\\^vl....?;..

in M

00 a o

O a o

- 1 -

o o

O O

-J to M

PI N M

o CO

:m\\\\\\mi\\ ^^^ • 0 -

01 "1 o tJ M

O P

CO

CO

D

r"

0 o z m <

m m z H

37

PRODUCTION:

At the time when ONGC was born, about 34 years

ago oil production was a rtiyth in India. Today, within three

decades of its existence it has assimilated the technology of

over 100 years to emerge as the premier oil company in India

and is now being looked upon as a symbol of model enterprise in

the country.

In 1970s the ONGC ventured into offshore

prospecting for oil. In February 1974, oil was struck at Bombay

High and commercial production began from May 1976. 1y«Os have

witnessed several new promissing discoveries, both onland and

offshore as a result of a very pragmatic and deliberate

exploration strategy followed by ONGC to intensify the efforts

in the producing basins of Bombay High, Cambay and Upper Assam

and extending efforts in other basins. Significant discoveries

are Gardhar, Saleg and Manda in Gujrat, Neelam in Bombay

offshore GS-16 in Godavari offshoreand a series of new

discoveries in cauvery Basin like Navi-Manain, Kovil Kalappal,

Bhuranagivi and Blamrilam, the discoveries at Sanari,Khovaghat,

Namti and Cochar fields in Assam have added new dimension to

the future production potential from the Indian sedimentary

basins all these discoveries have ultimately contributed to the

build up in the reserves that has taken place siiice the

beginning of the 6th plan which stand today at 5042 million

tonnes of oil and oil equivalent gas. The impressive success

38

ratio and exploratory discovery under which has been achieved

is a result of a very bold and deliberate exploration manage­

ment philosophy which give ONGC further confidence uo meet the

growing petroleum needs in the coming years.

During the sixth plan (1981-85) period 41 hydro­

carbon strikes/discoveries have been made. The total accretion

to the existing geological reserves in 1980-85 has been 894

million tonnes of oil and gas. ONGC expects to establish for

the future additional reserves of 1,400 million tonnes of

hydrocarbon through new exploration. Of the new 1,400 million

tonnes to be established within the next five years (1985-90).

810 million tonnes will be established in category 1 basins

(Assam, Bombay Offshore and Gujrat) 545 million tonnes in

Category II basins (Rajasthan, Cauvery, Krishna Godawari,

Andaman, West Bengal, Himalayan foothills, Ganga valley,

Tripura, Nagaland), and the remaining in category III basins

(Kutch, Saurashtra, Kerala, Kankan and Mahanadi) Recoverable

reserves also increased from 328.42 million tonnes in 1980-81

to 450.90 million tonnes in 1984-85 but the last four years

have registered a sharp shortfall in reserves. A more revealing

comparison would be to begin with the year 1983 when reserves

were 482.81 million tonnes. This figure fell to 465.10 million

tonnes in 1984.-'- This clearly shows that in 1984 and 1985

Indian oil reserves were occurring faster than ever before.

1. Indian Today, New Delhi, September 30, 1986, pp. 103-105.

39

WORLD OIL DEMAND AND SUPPLY:

Table - 5 reveals that the global crude oil demand is

expected to increase slowly. The probable future require­

ment of each sector are projected, based upon his historical

patterns, GDP assumption and technology evolution including

inter-fuel substitution. From the consumption of 61 MMBD in

1987, it will increase to 69-70 MMBD in 2000 A.D. and to 78

MMBD in the year 2010 A.D.

TABLE - 5

OIL DEMAND (MMBD) (MILLION BARRELS PER DAY)

Country

Free World

CPE

Total World

1987

47.49

13.75

61 .24

Year

2000

54.62

15.45

70.07

2010

61.14

17.56

78.70

. ' K t i i i i ' f : ONCt l l . n i d n.M,!. . I ) . - I n . I . h i l l . I ' l ' l l , | ) . l . ( ) .

40

Table - 6 reveals that in late 90's increasing oil

demand of free world can be met only from OPEC supplies

creating opportunity for OPEC to influence the world oil

market.

TABLE No.6

OIL SUPPLY (MMBD) (MILLION BARRELS PER DAY)

Country

Non-OPEC

OPEC

CPE

Total World

1987

25.29

19.03

15.88

60.20

Year

2000

24.17

30.64

15.25

70.06

2010

25.74

35.00

17.96

78.70

Source: ONCC Hand liouk, Dchradun, p. 3.6

41

The Eighties have witnessed dramatic developments z,\ the oil

front with the discovery of large reserves of r.r.d? oil and

natural gas in the onshore and offshore areas. The spurt in

crude output to 28.99 million tonnes in 1984-85 from 11.77

million tonnes in 1979-80 was mainly on account of the

valuable contribution of Bombay High. The natural gas pro­

duction also improved to 7.24 billion cubic metres from 2.36

billion cubic metres in the same period.

In the seve'nth plan, however, the activities of the

Oil and Natural Gas Commission operating in designated blocks

in the offshore and onshore areas related mainly to explora­

tory drilling and the additions to proved reserved did not

result in any significant increase in output iinmediately. The

large reserves will, of course, becoming in handy in Llie Eight

plan. The output of crude will thus be rising to 34.5 million

tonnes in the terminal year of the seventh plan from 28.94

million tonnes in 1984-85. The production of gas,on the other

hand, could have risen more impressively but for the delays in

creating that the necessary infrastructure facilities and

completing fertilizer and petrochemical projects based on

Leo, Interesting Phase in Oil, The Hindu Survey of Indian Industry, Madras, 1989, p.33.

42

natural gas. The estimated production of gas will th^s be 14

billion cubic metres (bum) against 7.24 billion cubic metres at

the end of the sixth plan.

The pTQ<^feSj) in the Eight Plan may be more comforting

as it is targeted that crude output should rise by 16.5 million

tonnes to 51 million tonnes by 1994-95 and natural gas to 100

million cubic metres daily from 40 million cubic metres in

1989-90. Thus the total production should be 215.09 million

tonnes and natural gas 138.61 bcm (in 1990-95) as compared to

157.38 million tonnes and 56.13 bcm in the seventh plan or 2

increase of 36.7 per cent and 146.9 per cent respectively.

In the Seventh Plan, the increase in crude ou .put was

more pronounced by 53 per cent on a lower base and gas

production by 130.5 per cent. A new breakthrough is likely to

be established in respect of crude output in 1990-95 and the

growth rate will depend on expeditions exploitation of proved

reserves. The availability of natural gas will be increasing

with larger yield of associated gas with rising crude output.

The additions to crude output by 16.5 million tonnes will come

from Bombay High, the Gandhar and Krishna Godavri and Cauvery 3

basins. The share of oil wells - old and new in the offshore

1. Leo, Interesting Phase in Oil, p.33

2. Ibid.

3. Ibid.

43

and onshore areas on the west coast in incremental production

will be ten million tonnes that of Krishna-Godavri and Cauvey

basins six million tonnes and other five lakh tonnes.

During 1988-89 there were 18 new finds of oil and gas,

the significant ones being Nada in Gujrat, Sonari, Uriamghat,

Adamtilla and Banas Kandi in Assam, Mandapeta and Bantumilli

in Andhra Pradesh. The discovery of oil at Nada registered

the highest well productivity in onland areas ^o far and will

significantly contribute to increasing the production

potential from Gujrat during the VIII Plan. The crude pro­

duction during the year was 29.64 million tonnes, gas supplies

6.98 billion M and LPG production 6.74 lakh tonnes.

Table No.7 shows that ONGC's aggregate crude oil

production during the Seventh Plan will be 143.64 million

tonnes. The onshore's share and offshore's share will be 41.33

million tonnes and 102.31 million tonnes respectively. The

total crude oil production during the plan is 159.14 million

tonnes in which 15.50 million tonnes will be produced by Oil

India Ltd. Company basin will produce 25 million tonnes.

ONGC's onshore production has been showing an increasing trend

1. Annual Report of ONGC Dehradun 1988-89, p.8.

44

TABLE NO. 7

ONGC'S CRUDE OIL PRODUCTION IN THE SEVENTH PLAN

(in million tonnes)

A - ONCX:

Combay basin

Upper Assam and Nagaland

Sub Total

2 Offshore

Total 1+2

B - Oil

Total (A+B)

1985-86

4.10

2.84

6.99

20.17

27.11

3.03

1986-87

4.50

3.03

7.53

20.52

28.05

3.03

1987-88

4.90

3.03

7.93

20.52

28.45

31.48

1988-89

5.50

3.03

8.83

20.35

28.88

31.91

1989-90

6.00

4.40

10.40

20.75

31.15

34.53

Total

25.00

16.33

41.33

102.31

143.64

159.14

Source Seventh Five Year Plan, Government of India, Planning Commission, New Delhi, 1985-90, Vol. II, p.156.

45

during the plan contrinuously from 6.94 million tonnes in

1985-86 to 10.40 million tonnes by 1989-90. Offshore pro­

duction in the whole plan has constantly been about 20.52

million tonnes. The growth rate of crude oil production

during the plan is 14.90 per cent (1985-86 to 1989-90). The

increase in ONGC's production during the plan would come from

the cambay basin upper Assam and Nagaland areas the increase

in Cambay basin would come from development of Kolar field and

the development of the heavy oil fields in North Gujrat

areas.

The year 1990-91 has been an eventful year for ONGC.

A large number of initiatives were taken in formulating

specific schemes for increasing oil and gas production

improving the utilisation of natural gas, stream living

systems and procedures, adding new dimentions to monitoring

systems of key activities with particular reference to

development schemes, managing the reservoir based on scienti­

fically established practices, human resources management etc.

These initiative are intended to bring long term benefits to

ONGC.

During the year 1990-91 oil and gas deposits have been

discovered in 19 new structures. Most of the oil deposits have

been found in Bombay offshore and gas has been found in

different new structures in Krishna, Godawari, Rajasthan and

Bombay offshore.

m

m

46

Table No.8 reveals ONGC's production of crude oil and

natural gas from 1980 to 1991. In 1980 the crude oil and

natural gas production were 9.20 million tonnes and 1013.99

million cubic metres. In 1981 the crude production was 9.21

million tonnes and natural gas 972.15 million cubic metres

respectively. It rose to 13.18 million tonnes and 1230.41

illion cubic metres in 1982. It went up from 23.15 million

tonnes and 1230.41 million cubic metres in 1982 to 18.23

illion tonnes of crude oil and 1856.72 million cuDic metres of

natural gas in 1983. It was 23.15 million tonnes of crude oil

and 2222.51 million cubic metres of natural gas in 1984. Again

it rose to 26.26 million tonnes, and 2789.94 million cubic

metres in 1985 and 27.51 million tonnes and 3308.37 in 1986.

Production of crude oil and gas sales registered an increase in

1987, i.e. 27.86 million tonnes and 5042 million cubic metres

of gas as compared to previous year. In 1988 crude oil

production increased from 27.86 million tonnes to 27.9 million

tonnes, gas supplies from 5042.47 million cubic metres to 5874

million cubic metres. It again rose to 29.64 million tonnes and

32 million tonnes and 6931.84 million cubic metres and 8610.03

million cubic metres in 1989 and 1990. The crude oil production

during the year 1991 was 30.345 million tonnt-s and gas

production 9865.71 million cubic metres. The gas production

during the year 1991 suffered a serious set back on account of

certain technological and environment constraints. The crude

47

TABLE No. 8

PRODUCTION

Year

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

Crude Oil (Million tonnes)

9.20

9.21

13.18

18.23

23.15

26.26

27.51

27.86

27.91

29.64

32.00

30.345

Natural Gas (Million cubic metres)

1013.99

972.15

1230.41

1856.72

2222.51

2789.94

3 308.3/

5042.47

5873.01

6931.84

8610.03

9865.71

Source Compiled and computed by the Research Scholar from Annual Report of ONGC (various issues).

48

oil production from 1985 to 1989 increased at a -/ery slow rate

but it rose rapidly from 1985 to 1987.

It is concluded that the production of crude oil has

been increasing but at a slow rate of growth. Natural gas

production was better than crude oil production. This also

shows in Fig. 5.

Table No. 9 reveals the number of wells drilled in

both onshore and offshore from 1981 to 1991. The total number

of wells drilled in 1981, 1982 and 1983 were 104,144 and 179.

The offshore wells were 53, 58 and 74 while onshore wells were

51, 86 and 105. In 1984, 1985 and 1986 total number of wells

drilled were 203, 201 and 266 respectively. The offshore

wells were 71, 79 and 117 and onshore wells were 132, 122 and

149. In 1987 the total number of wells rose to 302 out of

which offshore wells were 115 and onshore were 194. In 1988,

1989 and 1990 the total number of wells increased to 363 to

465 and 625. The offshore wells were 133, 182 and 253 and

onshore wells 230, 283 and 372. During the year 1991, 508

wells were completed. The offshore well were 240 and onshore

wells were 268. The offshore drilling was not satisfactory

in 1984, 1987 and 1991 because the growth rate was 4.05 per

cent 1.70 per cent and 5.14 per cent. The offshore growth

rate of wells was declining through out the period under

49

TABLE No,

DRILLING ACHIEVEMENT NUMBER OF WELLS DRILLED

Year

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

Offshore

53

58

74

71

79

117

115

133

182

253

240

Growth rate in (7o) of offshore

9.43

27.59

-4.05

11.27

48.10

-1.70

15.65

36.84

39.01

-5.14

Onshore

51

86

105

132

122

149

194

230

283

372

268

Growth rate of onshore (in %)

68.63

22.09

25.71

-7.58

22.13

30.20

18.56

23.04

31.45

-27.96

Total

104

144

179

203

201

266

309

363

465

625

508

Growth rate total in

1

38.46

24.30

13.40

-0.99

32.34

16.17

17.48

28.09

34.41

-18.72

Source: Compiled and computed by the Research Scholar from Annual Reports of ONGC (Various Issues).

50

study. The highest growth rate was in 1986 i.e. 48.10 per

cent. The onshore growth rate during the year 1985 and 1991

was not satisfactory because the growth rate was 7.58 in 1985

and -27.96 in 1991. The growth rate of onshore is declining

during the period under study. The total growth rate of both

offshore and onshore was declining during the period under

study from 1981 to 1991. During the year 1985 and 1991 the

total growth rate of both offshore and onshore was very low,

it was -0.99 in 1985 and -18.72 very low, it was -0.99 in

1985 and -18.72 in 1991. It rose to 32.34 in per cent in

1986. It came down into 16.17 per cent in 1987. In 1988 the

growth rate was 17.48 per cent. It again rose to 28.09 per

cent in 1989 and 34.01 per cent in 1990. It came down to

18.72 per cent in 1991. The table reveals that the drilling

performance was not satisfactory which was responsible for

slow growth rate of wells during 1981 to 1991, the drilling

achievement is also given in Fig. 7.

51

on o c

n

O Z o o X Q]

a D3 o o ?r

o T5

O

rt

O nr - (

a c 3

o

m X {-

O DO

o DO -<

t D m < m r-O "0 m z - I

if-

H O 5;

CO o o

I

o o

I

•;K-

en

Ol o O

CD O O

(D f j K

; -

o o

O O

m f -f -

D

n

Z

> o fn <

m m z

Ol Cll

' o 01

52

TABLE NO. 10

PRODUCTION OF LPG IN ONGC

(in 'ooo tonne

Years

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

Production

_

-

.73

1.61

1.96

2.42

3.20

4.51

5.10

6.74

7.18

8.76

Growth (Rats in %)

_

-

-

120.55

21.74

23.47

32.23

40.94

13.08

32.15

6.33

22.00

Source Compiled and computed by the Research Scholar from Annual Reports of ONGC (Various issues).

53

Table No. 10 shows the ONGC Liquified Petroleum Gas

(LPG) production from 1980 to 1991. In 1980 and 1981 the

L.P.G. production was nil in 1982 th<2 L.P.G. production was

only 0.73 lakh tonnes. It rose to 1,61 lakh tonnes, 196 lakh

tonnes and 242 lakh tonnes in 1983, 1984 and 1985. In 1986 it

went up to 320 lakh tonnes production of LPG during 1987

registered on increase of 451 lakh tonnes as compared to 320

lakh tonnes in previous year 1986. It was 510 lakh tonnes and

674 lakh tonnes in 1988 and 1989. It went up from 674 lakh

tonnes in 1989 to 718 lakh tonnes in 1990. Highest ever LPG

production of 876.8 thousand tonnes was recorded during the

year 1991. This represent an increase of 22 per cent over the

previous year 1990. The growth rate of L.P.G. during the year

1981 was 120.55 per cent. It declined in 1983, from 120.55 per

cent to 21.74 per cent. Again it rose in 1985, 1986 and 1987

respectively. It was 23.47 per cent, 32.23 per cent and 40.94

per cent. It came down to 13.08 per cent in 1988. In 1989 it

was 32.15 per cent, 1990 it was 6.53 per cent and in 1991 it

was 22.00 per cent. It is observed from the table that the

growth rate of L.P.G. is fluctuating throughout the period

under review.

CORPORATE PLAN:

The inherent high risk character of petroleum

industry,the predictable price fluctuation of oil in the world

54

market and the geo political situation in the middle east

countries and its bearing on national economy warrants

preparation of long term plan (1990-2015) covering all the

major activities of oil business and periodic relook. ONGC

prepared its first Corporate Plan for the period 1985-2000

considering the external environment viz. demand, foreign

exchange reserves etc. necessity has been felt to review the

previous corproate plan and extend the same upto 2015 covering

the period upto XII plan keeping in view the national and

global trends. The production of hydrocarbon in the country

has increased considerably with quantum jump of 50 MMT in

successive plan periods and is likely to increase further in

the coming years. The demand is soaring so rapidly that the

percentage level of self sufficiency is showing declining

trends. The oil demand projections indicate a trend of widening

gap between the indigenous production and demand. The present

corporate plan adequately highlights the demand management and

inter-fuel substitution, anticipating more prolific gas

discoveries in future.

The terminal year oil production of VIII plan is

expected to increase to 46 MMT from 31.5 MMT in the beginning

of the plan primarily from existing fields as well as

delineation and development of the recently discovered fields.

The terminal year oil production of IX plan in base case would

be around 54 MMT. Beyond IX plan, the increase in the

55

te:rminal year till production in the successive plan would not

be very high because the production from the ageing fields as

likely to decline and some of these fields may be teritiary

recovery.

The terminal year oil production of X, Xi, XII plans it

base case would be around 59, 63 and 62 MMT respectively. If

significant hydrocarbon discoveries are made in the forth­

coming plan the production scenario may altogether change. In

high case the terminal year oil production of IX, X, XI and XII

plans may be around 58, 67, 73 and 75 MMT respectively. The

total anticipated production of hydrocarbons in the terminal

year of VIII, IX, X and XII plans in the base case would be

around 81, 96, 110, 120 and 121 MMT respectively and in high

case 81, 101, 120, 134 and 1^0 MMT respectively.''- It is

evident from these profiles that growth of oil and gas

production may be very good upto X plan but in the successive

plans it may just maintain the level of production unless a

break through is made in exploration in category III and IV

basins. More "easy to locate" hydrocarbon traps have been

founds. Now the stress would be on locating stratigraphic and

subtle traps on the known oil and gas provinces and to upgrade

II and III basin on the basis of aggressive exploration policy.

1. ONGC Hand Book, Dehradun, 1991, p.4.1.

56

Geoscientfic surveys will be further intentified 3D seismic

surveys in onshore areas would be increase to 7450s. sq. km.

in XII plan from 2745 S. sq. km in VIII plan (270% growth). The

2D surveys in onshore and total 2D + 3D surveys in offshore may

be maintained upto the present of VIII Plan. The growth in

reserve accretion during VIII, IX, X, XI and XII plans may be

around 1232, 1410, 1430, 1460 and 1500 MMT respectively by the

end of XII plan the countries reserve establishmen*: of hydro­

carbon may be of the order of 12.23 billion tonnes against the

present level of 5.04 billion tonnes. During the same period

the hydrocarbon resource position is also likely to improve to

33.7 billion tonnes from 18.3 billion tonnes as on 1st January

1990. It is expected that the reserve base so established

would be helpful in sustaining the anticipated oil and gas

production profiles of various plans. Sansitinity analysis has

been attempted to assess the effect of adverse variation of

reserve accretion on production profiles. It is observed that

base case profile of 100% reserve accretion and high case

profile of 807o reserve accretion show very good match. Explo­

ratory drilling is likely to increase to 47.3 lakh metres in

the XII plan compared to 29.77 lakh meters in VIII plan. The

major increase will be in the onshore areas. There is not much

variation in the number of exploratory wells in VIII to X Plan.

It will increase to 1424 wells in XII plan compared to 1102 in

VIII plan. The exploratory drilling may lead to discovery of

57

some important fields which may compensate the fall in produc­

tion from the ageingfields .

The development drilling would be intt.-iSi c'ied in the

knonw and delineated fields. Infill drilling v>7iil also be

carried out. All efforts will be made to reduce the number of

sick wells. Production will be enhanced by better reservoir

management. The development drilling metreage will increase to

5992 lakh meters in XII Plan compared to 3877 lakh meters in

VII Plan in base case against 6424 lakh meters in XII Plan in

high case. The number of development wells to be drilled will

also increase order of 1922 in base case and 2059 in high case

compared to 1693 in the VIII Plan, The plan outlays will be

gradually decreased from fe. 26,078 crores in VIII Plan to

fe. 20,207 crores in XII Plan. The major reduction will be in

the capital acquisition Rs.500 crores each have been kept for

R & D work in all the plans from IX to VII. Internal resources

may be 180 per cent of the plan outlay in XII Plan.

Because of the several unknown variables there are some

difficulties inherent in planning for petroleum exploration.

Therefore, the numerical figures given in this thesis should be

considered more as fair estimates rather than rigid

quantities.

Suniinary (Base Case)

> i i r d c r a U r «

• « l * m i e l u n r r y a Oruhor* 2D

BD CXtiOor* hD • BD

I l » » n M ( 0 < OUl)

Dr&Ual 1 O a ^ ar« L i p l o r t t o r j Ufe'J-*!^ V t U i PycJt Bpwx^

Ihrt «J 0 ptji ui I UklrtA^o Wkllj Cyol* BpeaJ

T o U l Ooihor* ( t t p . 4 D n . ) UhU-^iKf,* WkLU Cycla B(4><xl IUS>

I>rUUiMl 1 Onmht>rm K j p l o r k l o r j UHU'^A^II

W*1U Cycl* Bpeul

J>«Tttl&pm«al U a i U M ^ B

VTklU

Cyul* U;«>uO

T e l U Orrshco-* (Xxp. * D « T . ) U a u - M ^ Walls C j d * Bp<<od lUffi

T D U I O B O C

&xplor» lo i7 U<>u-«&^ WKUJI

Of ci« Sptxad

&«T*Jopm«nt

Uoirt»A<> Wulln Cycju (l(.««l

ToUJ ( t i p . . jymt.) UliUlAIJU

w<,!:« ('ycJto fi('4M»:

IW^ Mo of n i ^

?-ro<lJcUon Tu-inloxl Yku-', ( C u s i u U U f * )

D OU Orvshore Ort»hore TCIAJ

U) O u Or\£hor« OfCihore

rULxndAl

1) riiin OutUyi U) IniarnAl RdBourooa

TJnll '

•000 8LK 8 a<] km. 'OOO LK

U U l

'000 U o i r w Sumburi U o u i r / a i j U o m h

'000 UmrM VuinUna Usuir/IUj Uonih

'000 Ui«.ru« Muiiit.<!ri UuUi[7Ill£ Uunih Rl^ y««r-i

'OOO UiurM Humburi Uftur/I l i j Uon;h

'(XK) u«Lr*« WMliit.<il a

UbUii/ni^i uoi i i i i

"000 Uoiro« Kumbara Uiiuir /nij Uonlh 111 yo^.»

'0(X) U.llr-ua I/UIHIMJIB

UuUir/nii Uonlh

'0<X) Ui«.n»i W i i n i N i l - n

U r.'lll^ UoMlli

•(XX) U i i l H x i

U i l i l . K i : n

u /in^; Uuiiili Mi/J Yiwin NuMll-lIt)

UUl.

DCU

lU. Cmita lU Croroa

V n i P l»r \

130 BT«6

l e u

1932

• 1 0 6 0

eoe 4 0 6

aGoe 1 1 3 0

BIG

4GHr. * IBJli

0 3 0 OOO

0 6 8 « 0 3 831

i u n \ Bli r

104;!

2 2 6 9 8 6 0

1 1 5 3 164

8 0 7 7 U 0 2

S71

3H77 1 0 0 3

0 7 0

(mi,-i ;;7i)i;

7 4» 701 lO-l

IS ( 0 4 ) 31 ( 1 2 B ) 4 6 ( l O O )

10 (3G) 2 5 ( lOO) 3S ( I 3 r n

3 6 0 7 8 s i c i a

tXPV«.o

l e a 4 0 1 0

1 6 0

1 4 1 0

B 7 3 e 787 4 7 6

8 6 0 2 1347

6 3 0

8 0 3 1 C134

637 6 6 0

1147 B62 661

UHll 3715

107 4

2 3 0 2 7 2 6

1 1 6 8 1 6 0

30(16 1 1 3 0

5 4 9

D04 7 1 7 2 0

0 4 7

Oil 3 3 ;!tlM)

7;;o 103 4

zm

10 (t)0) 3 6 ( 1 6 8 ) 64 (2B7)

IB (631 2 7 ( 1 3 0 ) 4 2 ( l O j )

3 4 0 2 3 2 7 2 1 7

X P U L D

136 7 0 6 0

IBO

1 4 3 0

8 8 5 3 e 2 « B03

40B1 1 3 4 3

624

6 0 0 4 2 1 6 7

0 6 2 6A3

1144 3 6 2 0 6 2

1 4 1 0 4^0

1772

2 5 8 2 7 7 2

1 2 8 0 167

3 0 0 7 1 1 7 6

OOl

C4UU 1 7 0 3

0 6 0

04110 UDJi)

71,1 1 0 6 0

21 1

22 ( 1 0 3 ) 37 ( l e n B9 ( 2 6 4 )

21 ( 9 0 ) 30 ( 1 4 3 ) Bl ( 2 3 3 )

aioao 3 3 6 0 3

XJ r u a

ISS T460

160

1460

28 IB 1048

BJ4

4 2 3 3 1400

t22

77«B 2«4S

6 « 0 070

I I 8 7 3E2

1024

U V 3 43t>

1022

2 6 6 0 787

1332 103

4(532 1 4 0 0

6 0 6

67:;o 1635

060

1^4 0« : _ ; . ! 'j

TOO 1142

Z23

2 3 ( 1 1 3 ) 4 0 ( 1 0 2 ) 63 ( 3 0 6 )

24 ( 1 1 3 ) 1 3 ( 1 6 7 ) 67 ( 2 7 0 )

2O034 75567

xiiruB 1

ISO T 4 6 0

1 6 0

leoo

S 6 i : 1 0 5 8

B47

4 4 2 0 1 4 7 6

6 7 6

7 0 3 3 EB33

6 0 2 0 6 6

1 2 1 7 3 « e

10«6 1

16711 4 4 7

1 8 7 7

£ 7 8 0 8 1 3

1 3 6 2 I M

4 / 3 0 1 4 2 4

6 2 7

6 0 0 2 1 0 2 2 101 6

107 2 2 3 3 16

T0\) 1 1 1 0

Z26

24 ( 1 1 7 ) 38 ( 1 0 4 ) 6 2 ( 3 1 1 )

2E ( 1 2 3 > M ( 1 6 7 ) 60 ( 2 0 3 )

2 0 2 0 7 3647G

* Doe* not inclutla 25000 mu oo »oooum of NnUonal Biunpla DnUltig ' &k&iK! on U\« Cocutnuni aubnuiuid on 30 4 00.

S o o r c o : ONCC Hand f^ook on c i L- . , l ) chr ; idun 1991 , p . 4 . 5

TARLI-: NO. 12

Summary (High Case)

>aTtleuIu'i

ftdLii&ic txirwtji Oiubor* BD

OfTihor* SO • 8t)

M ( 0 « O H )

W . J U

Tbt*J OtLaliur* ( X i p . « l ivv.)

W k l U O / i j k b ( a » / l

l>^nr ••'••pniiMl

C7cJ» BpAMj

T o U l O i r o c kxplormtMy

Cycle SpMtd

&VT « l 0 p B^«CLi U w r f a k ^ b

C > d » Spcxxj

»«>t»J C l i p . ••

VeUc C y d * Speed

Ka of lUg*

I>«T.)

( O u a u l a U v * )

Ollihan, Ttn*J

11) B u Oixalior* On»hor«

Unit

' 0 0 0 HUE B.Bq tm. ' 0 0 0 LK

U l i i

'OOO U>«.rM

Uuu.r/lu<i Uonll i

' 0 0 0 U « C r M WuniUil'a i i « U . i / l ( | ^ Ml,Mil.

' 0 0 0 U u l r u o

tJumUiri UuUir/IU^ UonUi

' 0 0 0 U«(.i-M Uuliil<«ra U u U i i / l l l ^ Ui ir . l l .

' 0 0 0 UaCTM R U E b e n Ue ier /Ulg Uonih

' 0 0 0 Uixrea S u a bars U e t a r m i a Uonih

'OOO Uecrea Butnbara

' 0 0 0 UaLTM Numbera

"000 Umroe Nucbora U e u i r / m ^ UoE'.h Rl« Y»»r» Numbni*

U U l

bCM

n X - L D d A j

I) I l i j , OulUyt U) UiUjJTuJ }UoCAJI«j«

' vmyua pyuii xriM

IBS fi746

IBO

1 8 3 :

4UC

UIIKfl 11 ntl

m i l

4LttC 1 6 3 6

C36 0 0 0

DHH • li.-l 0.11

I S B ]

l b 4 2

& 2 6 e

eao 1 ) 6 3

164

8 8 7 7

1102 B71

8 8 7 7

1 6 0 3 D70

6 8 6 4 2 7 0 6

7 4 8 7ft4 104

I B ( 0 4 ) 31 ( 1 2 0 ) 4(1 ( l O O )

10 f3G) BD ( 1 0 0 ) 36 ( 1 3 b )

C1B12

XI FiAA x n p U i )

wio 1 6 0

1S6 T0«0

IBO

ise rise

) B 0

l i l O

IBS T4B0

IBO 1 4 3 0 1 4 6 0 lEOO

UTSU TOT 47B

BnbU 1D47

D4C)

won?

ft03

l«UU Bile

» « 3 1

8 1 3 4 0 3 7 0 6 8

1 147 PIIU n t i i

18B3 4 1 6

leae

n 4 3 0 T67

1 1 7 8 172

8 8 8 6

1 1 3 8 B4e

B17B 1 7 6 2

0 6 0

ooei 2 0 0 1

7 2 8 • 1 0 4 0 coe

10 ( 0 7 ) 30 ( 1 0 1 ) CO ( 2 0 0 )

IR ( 0 3 ) 28 ( 1 3 2 ) 4 3 ( lOB)

8 6 4 1 4

20 ( \O7

7 1 3 6

8 2 4 8 ObS

0O4

I 1 4 4 Piiu U l U

l E l B 4 6 0

1774

8 6 6 0 B02

1804 171

9 0 0 7 1176

B61

6 7 0 8 1872

062

0 7 0 6 304B

760 1076

8 1 7

2 1 ( l O D ) 4:^ (2c>r.) 07 ( 3 1 0 )

81 (BO) :w ( 1 6 0 ) E3 ( 2 4 0 )

8 3 7 7 0 3(U;6P

• Do .* r^l Ir^lurfB 2 6 0 0 0 ml^ or, a .« .un i of K»uor.»l B»inpl« I„.ui.,u!

BO IB 1046

B34

BOIB 1080

B47

• tISb 1B07

B4t)

PO80 8 8 6 6

873 008

1 1P7

11U4

1 6 0 0 4 70

1821

4 7 1 T I o n

8 7 7

8 2 3 0 B&Z9

083

lUlT OPO

lOoe

1707 4 8 8

1 8 7 0

8 7 8 7 6 2 2

1871 108

8 0 2 4 664

1 4 3 8 180

4 6 8 2 14O0 soe

8 1 3 6 1077

082

4 7 3 0 1424

&37

e-C34

SO50 1 0 2 2

10817 5377

774 1184

833

26 (123 ) 47 (22()j 73 (34 B)

BO (117 ) 5G (168) 81 (SB5)

82 4 05 3004B

11164 M 8 3

6 0 7 J 152

8 3 1

26 ( 1 3 1 ) 40 ( 2 4 0 ) 76 ( 3 7 1 )

21 ( 1 3 2 ) >Je ( 1 8 3 ) 66 ( 3 1 6 )

8 2 3 7 7 4 1 0 3 6

S o u r c e : . ONGC Hand Book, op. cit., Dehradun 1991,p.4.6

60

CONCLUSION:

In conclusion, it may be observed that the Oil and

Natural Gas Commission (ONGC) which has recently been converted

into a public limited company has a vital role to play in the

oil scenario of the country. In the new setting it will shed

its three decade old nomenclature and will be vested with

structural, organisational and financial autonomy to compete

better in keeping with liberalisation of the econci '. In the

Chapter that follows, a conceptual framework of the tnesis has

been presented to highlight the plan of the stuuy, iL.- design

and objectives.