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OIL AND NATURAL GAS CORPORATION LTD.

22 May 2024 | 03:59

Industry >> Oil Drilling And Exploration

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ISIN No INE213A01029 BSE Code / NSE Code 500312 / ONGC Book Value (Rs.) 241.37 Face Value 5.00
Bookclosure 17/02/2024 52Week High 293 EPS 38.35 P/E 7.25
Market Cap. 356763.94 Cr. 52Week Low 150 P/BV / Div Yield (%) 1.15 / 0.00 Market Lot 1.00
Security Type Other

DIRECTOR'S REPORT

You can view full text of the latest Director's Report for the company.
Year End :2023-03 

On behalf of the Board of Directors of your Company, it is my pleasure to present the 30th Annual Report of Oil And Natural Gas Corporation Limited (ONGC/ the Company) and its Audited Financial Statements for the year ended 31 March 2023 (FY’23), together with the Auditors’ Report and Comments on the Financial Statements by the Comptroller and Auditor General (CAG) of India.

After three tumultuous years, the pandemic’s and geopolitical disruptions’ extensive effects are finally showing tapering signs coupled with slow recovery in the world economy. Strong economic growth has been apparent and inflation appears to have decreased in a number of nations, largely as a result of the implementation of strict monetary policies. On the other hand, the evolving energy challenges are complex and include not only natural gas but also oil, coal, electricity, food security, and climate change. It appears that constant unpredictability and potential volatility continue to characterize the oil and gas industry.

Your Company has been working to improve the value proposition for all stakeholders while maintaining the pace of capital spending and project execution, sustaining production, and cost-optimizing operations. The country’s expanding energy needs can be met while also generating value for all our stakeholders if we consolidate from here and continue to grow sustainably.

Your Company, along with its group companies, has registered yet another year of robust performance and made substantial progress on most of the priority areas.

Your Company’s standalone production during FY’23 was 40.212 Million Metric Tonnes of oil and oil equivalent gas (MMTOE) (against FY’22 production of 40.453 MMTOE).

Highlights of production during FY’23 are as under:

•    Crude oil production, including share of JV production, was 21.485 Million Metric Tonnes (MMT) during FY’23 against 21.707 MMT during FY’22.

•    Natural gas production, including share of JV production, was at 21.351 Billion Cubic Metres (BCM) during FY’23 against 21.680 BCM during FY’22.

 

• Value Added Products (VAPs) production during FY’23 was 2.598 MMT against 3.089 MMT during FY’22.

Backed by an intensive and continuous exploration programme, your Company declared eight oil and gas discoveries (five on-land and three offshore) during FY’23.

During FY’23, accreted 40.62 MMTOE of 2P reserves from ONGC operated areas in India. Reserve Replacement Ratio (RRR) from domestic fields was 1.01 with respect to 2P reserves. Your Company has maintained Reserve Replacement Ratio (2P) of more than 1 for the 17th consecutive year.

Your Company has four direct subsidiaries, namely ONGC Videsh Limited (OVL), Mangalore Refinery and Petrochemicals Limited (MRPL), Hindustan Petroleum Corporation Limited (HPCL) and Petronet MHB Limited (PMHBL).

Your Company also has nine Associates/ Joint Ventures, namely ONGC Petro additions Limited (OPaL), ONGC Tripura Power Company Limited (OTPC), ONGC TERI Biotech Limited (OTBL), Dahej SEZ Limited (DSL), Mangalore SEZ Limited (MSEZL), Indradhanush Gas Grid Limited (IGGL), Pawan Hans Limited (PHL), Petronet LNG Limited (PLL) and Rohini Heliport Limited (RHL).

1. Major Highlights of FY’23

i.    Revenue from operations in FY’23 stood at '1,555,173 Million against '1,103,454 Million in FY’22.

ii.    Net profit in FY’23 was '388,289 Million against '403,057 Million during FY’22 mainly due to higher realisation on Crude Oil, Natural Gas and VAPs which was partly offset by exceptional item amounting to '92,351 Million during FY’23.

iii.    Your Company has notified 8 new hydrocarbon discoveries (3 New Prospects & 5 New Pool discoveries) in its operated acreages including one discovery in OALP block, 1 in NELP block and 6 discoveries in nomination blocks.

iv.    Three hydrocarbon discoveries (Mandapeta-60, Kesanapalli West Deep-7 & Hatipoti-1), notified during the FY’23 with cumulative 2P reserves (EUR) of 0.244 MMTOE were monetized during the year itself.

v.    Your Company has notified first prospect discovery “Amrit” (MBS171HAA-1) in OALP Block MB-OSHP-2017/1 awarded under OALP-I bid round in Mumbai Offshore.

vi.    One exploratory well has been drilled during FY’23

for exploration of new Mesozoic Play in Cambay Basin.

vii.    During the year, with an objective to consolidate and realize reserves from unconventional reservoirs, completed the drilling of 4 High Pressure High Temperature (HP-HT) wells spreading over KG Basin (02 wells) and Mumbai Offshore (02 wells) and 3 wells with Basement Play as an objective - One each in Cambay Basin, Assam Shelf and Mumbai Offshore (SW).

viii.    During the year, 85 exploratory wells were drilled, out of which, 54 wells were concluded and from concluded wells, 30 wells were proved to be hydrocarbon bearing. Besides 23 wells of previous years were concluded out of which 16 wells proved to be hydrocarbon bearing.

ix.    Success ratio in exploratory drilling achieved considering total wells tested/concluded including those of previous year’s wells was 1:1.67 (59.74%) -(Total 77 wells concluded out of which 46 wells were proved to be hydrocarbon bearing).

x.    A total of 809.58 LKM of 2D and 13696.49 SKM of 3D seismic was acquired during FY’23. Out of this quantum, a total of 658.83 LKM 2D and 10,959.85 SKM of 3D seismic data was acquired in Open Acreage Licensing Policy (OALP) blocks.

xi.    An airborne DHI technique (Airborne Hydrocarbon Sensing System “AHSS”) based on measurement of micro-seepages concentration to de-risk existing prospects and prioritize exploration areas, has been inducted for the first time in India in A&AA Basin. The survey started on 20 January 2023 and completed on 6 February 2023 in Baramura & Barjala Areas of Tripura covering an area of about 1,488 SKM.

xii.    Six contract areas awarded to ONGC under DSF-III. Three of these are located in western offshore (2 in N&H, 1 in MH), while three are in Eastern Offshore.

xiii.    Your Company incurred '5,698.46 Million on Research & Development activities and another '4,108.65 Million on various innovative initiatives during FY’23. These initiatives resulted in improved operational efficiencies and cost optimization for your Company.

xiv.    During FY’23, 14 Patents and 01 Copyright were granted to your Company by the Intellectual Property India, Government of India.

xv.    Great Place to Work: ONGC was recognized as one of the best employers in India among other nation-builders by the Great Place to Work (GPTW) on 14 June 2022. The Energy Maharatna also featured on GPTW’s ‘Wall of Fame’ for its commitment to maintaining the energy security of the nation.

xvi.    Best Employer Award: ONGC was conferred with the prestigious ‘Best Employer Award’ at the North India Best Employer & HR Leadership Excellence Awards organized by World HRD Congress on 22 December 2022.

2.    Global Recognitions

Your Company has been recognized at various national and international forums, list of Awards and Accolades is annexed as Annexure - A.

3.    Details of discoveries

During the year, your Company has notified eight new discoveries in acreages operated by it.

Details of exploratory efforts made by your Company were as under:

 

Sr.

No

Basin/Block

Discovery well

Acreage

Discovery Type

Hydrocarbon

Type

1

KG Onland

Mandapetta-60 (MSDL)

Mandapeta PML

Pool

Gas

2

KG Onland

Malleswaram-22

(MSAD)

Malleswaram PML

Pool

Gas

3

KG Onland

Karugorumilli-1 (KML-AA)

Godavari Onland PML (7 Year)

Pool

Gas

4

Bengal Onland

Kankpul-1

(WBON5-4-NA-E)

NELP:

WB-ONN-2005/4

Prospect

Gas

5

KG Offshore

Kesanapalli West Deep-7 (KWD-AC)

Vainateyam PML

Pool

Oil & Gas

6

KG Offshore

GS-15-22 (GS-15-AU)

Vainateyam PML

Pool

Gas

7

Assam Shelf

Hatipoti-1 (NGAE)

Mekeypore-Santak-Nazira PML

Prospect

Oil & Gas

8

Mumbai Offshore (SW)

MBS171HAA-1

(MBS171HAA-A)

“Amrit”

OALP:

MB-OSHP-2017/1

Prospect

Gas

Out of eight new discoveries made during the financial year, three discoveries viz. Mandapetta-60, Kesanapalli West Deep-7 and Hatipoti-1 were monetized. Gain from discoveries monetized during FY’23 was 0.03 MMTOE.

4. Reserve Accretion and Reserve Position

During FY’23, accreted 40.62 MMTOE of 2P reserves from ONGC operated areas in India Reserve Replacement Ratio (RRR) from domestic fields was 1.01 with respect to 2P reserves. The position of 2P Reserve established as on 01 April 2023 by ONGC in its operated areas and in non-operated (JV share) was as follows:

Position of Reserves as on 01 April 2023 (MMTOE)

As per PRMS1#

Category

Company Operated

JV Operated

Total

Reserves

2P

716.09

13.74

729.83

1#PRMS: Petroleum Resource Management System. ONGC adopted PRMS w.e.f. 1 April 2019.

5. Award of Blocks/New Acreages taken for Exploration

During the year, Revenue Sharing Contracts (RSC) for 21 OALP Bocks (18 OALP-VI & 3 OALP-VII) covering total of area 43,493.94 Sq.km. were executed on 27 April 2022 and 28 June 2022 respectively.

Currently, all the awarded OALP blocks are in exploratory phase. As on 01April 2023, a total 3706.49 LKM of 2D seismic data and 19929.26 SKM of 3D seismic data has been acquired and two exploratory wells drilled in OALP Blocks.

Additionally, Revenue Sharing Contracts (RSC) for 6 DSF Contract Areas, measuring 2,656.14 Sq.km. and 2 CBM blocks measuring 1,506.89 Sq.km. area under Special CBM Bid Round-2021 (SCBM 2021) were executed. As a result of the above total New Acreages taken for exploration during the year was 47,657 SKM.

6. EOR Proposals

Your Company has been consistently expanding its Enhanced Oil Recovery (EOR) portfolio. Under the Enhanced Recovery (ER) policy, fields of ONGC located in onshore and offshore areas were considered for screening. 33 ER Pilots/Preliminary Screening reports submitted to DGH till date for Oil Fields. 17 ER Pilots already approved (Phase-I), 3 are not approved and 11 Under Approval (Phase-II). 2 ER Pilots notified to DGH (Gandhar GS-9 Miscible CO2 injection, Gandhar GS-11 Miscible CO2 injection) are under feasibility study. During the year ONGC’s offshore asset MH executed 1 EOR pilot low salinity water injection and Onshore assets Ahmedabad executed Sanand ASP pilot and Mehsana executed Nandasan Polymer, Bechraji commercial polymer & North Kadi surfactant pilot EOR.

7. Major Projects Completed

During the FY’23 following 5 major projects with an investment value of around '81,182 Million were completed:

Sl. No

Project Name

Completion

Date

Actual Cost (' Million)

1

Redevelopment of Nandasan Field- Mehsana Asset

22.11.2022

4,277

2

Gas compressor Project at Ankleshwar Asset (GCP-ANK)

31.03.2023

1,194

3

Mumbai High South Redevelopment Phase-IV (MHSRD-IV)

08.05.2022

36,396

4

Cluster-8 Development Project

31.12.2022

23,590

5

WO-16 Cluster Development Project(MOPU)

23.12.2022

15,725

8.    CAPEX

During the year, total capital expenditure of your company including its subsidiaries was '476,408 Million (comprising ONGC - '302,084 Million, HPCL - '140,840 Million, OVL - '27,232 Million and MRPL - '6,252 Million).

9.    Drilling of Wells

Your Company drilled 461 wells during FY’23 against 434 wells drilled during FY’22. 85 of these wells were exploratory wells, while the balance 376 wells were development wells including side-track wells. Land Acquisition (LAQ) issues in Coal Bed Methane, Bokaro (CBM) and Karaikal impacted the drilling activities of your Company. The major highlights of Drilling operations during the year were as under:

•    The overall exploratory and development cycle speed and commercial speed stood at 1013 M/RM and 1611

M/RM respectively. The cycle speed achieved during the year is highest ever since inception (Previous best: 997 M/RM during the year 2017-18) whereas commercial speed stood at 2nd best since inception (Previous best: 1,616 M/RM during the year 2017-18).

•    Well #NGAE_SBS (Exp.) (TD 4,179 m) was drilled in 111 days against plan of 122 days with commercial

speed of 1,145 M/RM. Well #NGAE_SBS (Exp.) (TD 4179 m) was drilled in 111 days against plan of 122 days with commercial speed of 1,145 M/RM. During testing the exploratory object (BCS-1 object) yielded an average production of 125 m3/d of Oil and 29,502 SCMD Gas with less than 1% water cut. However the well was completed in object-IV (BCS-3). The success of this well in Hatipoti field gives a new lead for exploration and realization of YTF potential.

•    Successfully tested exploratory well no. Hatta#03 in Son Valley of MP (Vindhyan Basin) and established commercial gas presence in India’s 9th Commercial Hydrocarbon Basin. Well flowed gas @ 62,044 m3/d thru 6 mm bean at FTHP -1700 psi, CHP - 1800 psi. 1

10. Oil, Gas & VAP Production

Details of production, sales quantity and VAPs product wise during FY’23 (inclusive of JV Share) in comparison of FY’22 were as under:

Description

Unit

Production Qty

Sales Qty

Value (' in Million)

FY'23

FY'22

FY'23

FY'22

FY'23

FY'22

Crude Oil

(MMT)

21.49

21.71

19.19

20.29

1,030,076

836,612

Natural Gas

(BCM)

21.35

21.68

16.68

16.75

374,168

124,414

Value Added Products (VAPs)

Liquefied Petroleum Gas

000 MT

883

882

884

883

55,543

46,752

Naphtha

000 MT

932

932

921

964

49,614

50,640

Ethane-Propane

000 MT

119

315

119

315

4,909

9,078

Ethane

000 MT

281

499

281

500

13,311

10,815

Propane

000 MT

150

199

147

197

8,713

10,637

Butane

000 MT

81

116

81

116

4,668

6,185

Superior Kerosene Oil & MTO

000 MT

9

23

3

23

263

1,086

Others1

000 MT

143

123

80

62

6,276

3,404

Sub Total (VAP)

000 MT

2,598

3,089

2,516

3,060

143,297

138,597

Total

         

15,47,541

10,99,623

*Others include ATF, LSHS and HSD

11.    Production from Overseas Assets - ONGC Videsh Ltd.

Your Company’s overseas E&P operations are carried out through its wholly owned subsidiary, ONGC Videsh Limited (OVL), which in turn conducts its operations either directly or through its subsidiaries. Production from the overseas assets during FY’23 was 10.171 MMTOE in comparison to 12.330 MMTOE during FY’22. Oil production during FY’23 was 6.349 MMT as compared to 8.099 MMT during FY’22 and Gas production during FY’23 was 3.822 BCM as compared to FY’22 production of 4.231 BCM. Key factors affecting overseas production included natural decline, Russia-Ukraine conflict leading to declaration of Force Majeure with effect from 21 April 2022 in Sakhalin-1 project, FPSO shutdown in BC-10; expiry of Nare Association Contract in MECL Colombia with effect from 4 November 2021; heavy floods in GPOC South Sudan; and Block 06.1 Vietnam project nearing end of field life.

12.    Other Exploration Initiatives/Activities

a) Acquisition of 2D Seismic Data for appraising offshore area up to EEZ:

Your Company was entrusted as nodal agency for EEZ survey under Government-funded program

(To appraise the unapprised offshore areas upto Exclusive Economic Zone - EEZ), a total of 70,000 LKM of state-of-the-art 2D high fidelity broadband seismic data (API) has been planned to be acquired in three sectors namely West Coast, East Coast and Andaman offshore. The initial target was subsequently revised to acquiring 82,353 LKM of seismic data. Against that revised target of 82,353 LKM, as on 1 April 2023, a total of 65,271.55 LKM of 2D seismic data has been acquired by ONGC, which was 80% of the total target.

b)    Basement Exploration:

As a part of concerted exploration efforts for Basement Play, a total of 3 wells having basement as an objective were drilled, this includes Padra-168 in Cambay Basin, Tengahola-1 in Assam Shelf and BH-87 in Mumbai offshore. The well Padra-168 proved hydrocarbon bearing in Basement.

c)    HP-HT Exploration:

High Pressure - High Temperature (HP-HT) and Tight reservoirs have been an exploration and development challenge for your Company. Your Company is striving hard in the field of HP-HT due to bore hole complications, fluid design, high-cost drilling technology including HP-HT cementing,

well construction and other reservoir engineering issues. In ONGC operated areas, HP-HT regime is encountered in areas like Periyakudi, Bhuvanagiri in Cauvery Onland, Kottalanka, Nagyalanka, Bantumilli South and Malleswaram in KG Onland. Yanam in KG Shallow offshore, G-4-6, D-33 and GS-OSN-2004/1 in Western Offshore were also classified as HP-HT reservoirs. Additionally, high pressure regime is often encountered in certain areas of Assam Arakan Fold Belt.

During FY’23, eight exploratory HP-HT wells namely Bantumilli South-5, South Penumadam-1 & North Veeravasaram-1 in KG Onland, Baramura-37 in AAFB, Tripura, GS-71-3 & GS-21-4 in KG Offshore (SW), MBS171HAA-1 and D-33-9 in Mumbai Offshore were taken up for drilling. Well MBS171HAA-1 in Mumbai offshore OALP block was found to be gas bearing and notified as new prospect discovery. Well GS-21-4 also proved gas bearing.

13. Exploration and Production from Unconventional Sources

a)    Coal Bed Methane (CBM):

Your Company was awarded 9 blocks in CBM bidding rounds including nomination, out of which it has relinquished 5 blocks on the basis of data generated from exploratory efforts and has been operating 4 blocks (Jharia, Bokaro and North Karanpura in Jharkhand and Raniganj in West Bengal) where exploration activities have been completed. Developmental activities are at an advanced stage in three of these blocks viz. Bokaro, Jharia and North Karanpura.

Recently, in the Special CBM Bid Round 2021, ONGC has been awarded two CBM Blocks i.e. BP-ONHP(CBM)-2021/2 in Rajmahal Coalfield of Jharkhand and SR-ONHP (CBM)-2021/5 in Sohagpur Coalfield of Madhya Pradesh.

b)    Gas Hydrate Exploration Program

Your Company has been an active contributor to gas hydrate exploratory research under the National Gas Hydrate Program (NGHP) of Government of India. ONGC has played a significant role in G&G studies for the identification of sites for NGHP-01 and NGHP-02. After the success of the NGHP-02 expedition, ONGC has set up a dedicated R&D institute for Gas hydrate study at Panvel.

During FY’23, your Company obtained 3 patents in the field of gas hydrates and published research papers in reputed journals and conferences. Gas

hydrate R&D team carried out projects to identify gas hydrate prospects in Mahanadi and Cauvery offshore, performed simulation studies for gas hydrate production and developed in-house machine learning based software-HYDRATEMIND for prediction of gas hydrate zones.

Your Company has MoUs with Skolkovo Institute of Science and Technology (Skoltech), Moscow, and IOCL for gas hydrate R&D studies.

14. Drilling Services

There has been continuous induction of new technologies in Drilling Services. Some of these new technologies, which are now being used extensively are:

a)    Casing While Drilling: In view of safety prospect in 30” conductor piling issues and further drilling for 20” casing, implemented Casing While Drilling (CWD) in six wells of Mumbai on pilot basis. The technology has proven to be a safer and faster for vertical exploratory wells, achieved using casing as drill string for both phases. It turned out to be solution for surface seepage losses and associated complications for initial well phases.

b)    Auto-Driller: Automatic bit feeding system (eWildcat TM 2.0) implemented in 5 drilling rigs (Type-II & above rigs of ONGC) for one year on pilot basis results in enhancement of the drilling efficiency.

c)    Liner While Drilling: Under the Pilot project, out of planned 4 wells, 2 wells Trident-XII (SN#8Y), GD Chitra (HSD#4Z) have been completed using Liner While Drilling Technology in 8 %’’ phase. The technology has provided benefit in drilling through unstable (shale) formation and further through depleted reservoir in same drilling phase, facilitating simultaneous liner casing and cementation of drilled sections without any issues. Technology has proven for minimising formation damage due to drilling fluid loss management.

d)    Mechanical Pipe Cutter (MPC) and Echo meter:

Introduction of wire-line MPC tools reduces the side track preparation time for the wells producing through depleted reservoir. It allows to cut the completion string in under balance condition after adjudging the liquid level in well bore. This resulted in reducing the time for curing the losses and further damaging the reservoir.

e)    Under Reamer services: It allows to mitigate the well bore complications and enhance the hole cleaning in High Angle/ ERD wells in larger hole

sizes. Drilling through the multi-layered formation, sailing at hi angle and sustain the well bore stability is a challenge to reach the desired subsurface target. Under reamer services used on recently wells in 12 %” hole where sailing angle was 81 deg. Hole was enlarged to 13” and observed excellent hole clean-up and elimination of back reaming. This is planned to be used in 6” section wherein losses are prominent and ECD plays an important role enlarging the hole to 7”, thereby helping in cased well bore with 5” liner and cementation.

f)    RTDMA for the Rig performance evaluation:

Real time monitoring and benchmarking the drilling different activities captured by Real Time Data Management and Analytics (RTDMA) leads to evaluate the performance of each ONGC hired and owned rigs. It results in creating the sensitive, responsible and enhanced working culture among the crew rig providers and service providers. It also creates the alert on operations deviations.

g)    Oriented Coring: To enhance the understanding on the orientation of sedimentation and its fractures, recently a core was taken in the exploratory well at well bore angle of 60 deg.

h)    Drilling Fluid for depleted reservoir: In house developed drilling fluids like Energised Micro Bubble System (EMBS) and Mixed Metal Oxide (MMO) for the highly depleted reservoir are used in recently for the multi-layered reservoir. It reduces the Non Productive Time (NPT) for the loss control time.

i)    Under Balance Drilling is a tool for drilling through depleted reservoir with real reservoir assessment. Implementation in the drilling of drain hole section in 7 wells of Neelam Heera Asset under progress.

j)    Introduced new technology of anchoring i.e. Midline Buoy System for floater for deployment of anchor moored rigs in complicated subsea architecture fields.

15. Infrastructure Up-gradation:

Your Company is in the process of up-gradation of existing resources with State-of-Art equipment to remain competitive in the global E&P business. It has already taken actions to refurbish, upgrade and replace its Onshore/Offshore drilling rigs, Workover rigs, Cementing units, Crisis Management equipment in phases. Major Infrastructure Up-gradations during the year were as under: 2

During FY’23 another four new generation hi-tech drilling were commissioned (7 rigs commissioned till 31 March 2023) and 2 more rigs were commissioned during Apr-May 2023.

•    5 Rigs out of 20 Automated Hydraulic Workover rigs were commissioned at Mehsana, Ahmedabad, Assam, Ankleshwar and Agartala.

•    Acquisition of new 36 new Well Stimulation units in progress.

16. Information Technology

Your Company has carried out several Business

Process improvements in the field of IT in FY’23.

Major Process improvements were as follows:

•    A state-of-the-art Network Operation Centre (NOC) has been established for 24X7 monitoring, analysis and response against any unwarranted activity on ONGC Enterprise Network. The NOC functions have been very ably augmented with latest Network Access Control (NAC) tools for maintaining a “Zero Trust Network Architecture (ZTNA)” and new generation firewalls on the Network periphery to further strengthen the cyber security posture of ONGC network & information systems.

•    Enterprise Production SCADA Upgrade Project successfully completed on 30 April 2022 covering 146 Tier-1 locations, 1.7 lakh sensor tags. Production SCADA upgrade covering all onshore & offshore installations with optimised architecture is completed. The Production SCADA system is upgraded to provide analytical capabilities using industry-standard OSI PISoft software.

•    ONGC’s SAP-ECC ERP Systems successfully upgraded to latest SAP-S/4 HANA digital platform having faster in-memory computing for improved system performance and advanced data analytics features.

•    “Common Analytics Platform” project completed on 30 January 2023. This system will provide a common platform for cross-domain Analytics.

•    As a part of Data Center Consolidation, Disaster Recovery Data Centre (DRDC) successfully migrated and shifted enterprise e-mail DR from Mumbai to Vadodara on 23 March 2023. Data center consolidation and migration is targeted towards physically consolidating Corporate Infocom & ICE Data centers for achieving operational efficiencies

within ONGC’s IT landscape and to actively reduce the resources that data center needs.

•    Communication to Sagar Samrat, converted from a Jack-up Rig to a MOPU (Mobile Offshore Production Unit) - ONGC’s jewel crown, bolstered with the commissioning of High Throughput Satellite (HTS) connectivity, for the first time in offshore.

17. Financial Highlights:

Your Company earned Profit After Tax (PAT) of

'388,289 Million, down by 3.66% over FY’22 (?403,057

Million) mainly due to exceptional item amounting to

'92,351 Million in FY’23 and registered Revenue from

Operations of '1,555,173 Million, up by 40.94% over

FY’22 C1,103,454 Million).

Highlights - Standalone Financial Statements

• Revenue from Operations    : '1,555,173 Million

•    Profit After Tax    : '388,289    Million

•    Contribution to Exchequer    : '746,402    Million

•    Return on Capital Employed    : 38.79%

•    Debt-Equity Ratio    : 0.03:1

•    Earnings/ Share    : '30.86

•    Book Value/ Share    : '205 3

Particulars

' in Million

2022-23

2021-22

Revenue from operations

1,555,173

1,103,454

Other Income

76,266

65,156

Total Revenue

1,631,439

1,168,610

Profit Before Interest Depreciation & Tax (PBIDT)

791,252

609,456

Profit Before Exceptional items and Tax (PBT)

596,304

410,400

Exceptional items2 -Income/ (expenses)

(92,351)

-

Profit Before Tax (PBT)

503,953

410,400

Profit After Tax

388,289

403,057

Transfer to General Reserves

212,164

288,576

for the period from 1 April 2016 to 31 March 2022 together with interest thereon up to 31 March 2023 towards the ST/GST on Royalty and disclosed being an exceptional and material item.

Further, a similar provision of '28,723 Million was also made during the quarter and year ended 31 March 2023 for disputed taxes for the financial year 2022-23.

The above adjustments have adversely impacted the profitability for FY’23. However, the Company shall continue to contest such disputed matters before various forums based on the legal opinion as per which the Service Tax/GST on Royalty in respect Crude oil and Natural gas is not applicable.

18.    Change in Share Capital:

During the year under review, there is no change in capital structure of the Company.

19.    Dividend

Your Company has paid interim dividend of '6.75 per share of '5 each (@135%) in November 2022 amounting to '84,917 Million and '4.00 per share of '5 each (@80%) in February 2023 amounting to '50,321 Million. The Board of Directors has recommended final dividend of '0.50 per share of '5 each (@10%) amounting to '6,290 Million subject to approval of shareholders. The total dividend pay-out for FY’23 would be '141,528 Million with pay-out ratio of 36.45%.

The Dividend Distribution policy may be accessed at the web link: https://www.ongcindia.com/wps/wcm/ connect/en/investors/policies.

20.    Financial Accounting and Secretarial Standards

The Financial Statements of the Company for FY’23 have been prepared in compliance with the applicable provisions of the Companies Act, 2013 including Indian Accounting Standards (Ind AS) and Guidance Note on Accounting for Oil and Gas Producing Activities issued by the Institute of Chartered Accountants of India.

Secretarial Standards:

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

21.    Loans, Guarantees or Investments

Your Company is engaged in Exploration & Production

(E&P) business which is covered under the exemption provided under Section 186(11) of the Companies Act, 2013. Accordingly, the details of loans given, investments made or guarantee or security given by the Company to subsidiaries and associates were not reported.

22. Deposits:

Your Company has not accepted any deposit during

 

the year. Further, there was no outstanding deposit and/or unpaid or unclaimed principal amount or interest against any deposit either at the beginning or at the end of FY’23.

23. Credit Rating of Securities:

Details of the Credit Ratings of Debt Securities of the Company as on 31 March 2023:

24.    Investor Education and Protection Fund (IEPF)

Details of transfer of unclaimed dividends and eligible shares to IEPF have been placed in the Corporate Governance Report, which forms part of the Annual Report.

25.    Related Party Transaction

Particulars of contracts or arrangements with related parties as referred to in Section 188 of the Companies Act, 2013 is provided in specified form AOC-2, annexed as Annexure - B.

26.    Subsidiaries:A. ONGC Videsh Limited

ONGC Videsh Ltd, the wholly-owned subsidiary of your Company for carrying out E&P activities outside India, has participation in 32 oil and gas projects spread accross 15 countries. ONGC Videsh portfolio comprises of 14 producing, 4 discovered/ under development, 11 exploration and 3 pipeline projects. ONGC Videsh is Operating 16 of the 32 projects, solely or in association with partners.

Gross consolidated revenue of ONGC Videsh for FY’23 was '116,763 Million (against '173,220 Million during FY’22) and the PAT attributable to owners registered was '17,003 Million during FY’23 as against '15,892 Million during FY’22

Significant events in the area of Exploration & Operations:

a.    CPO-5 Block:

The Block ended FY’23 with JV production levels of 19,000 barrels of oil per day (bopd), making it a significant drill bit success for the company. Drilling of 6 wells was also completed successfully during the year. Two Development wells Indico-6 & Indico-7 have been drilled during FY’23 and will be brought on production after approval of surface facilities by the Colombian regulator.

b.    Lower Zakum Concession:

In FY’23, average JV production rate was about 388,000 bopd. The project envisages production of 450K bopd by 2025 and 520K bopd by 2028. To evacuate the gas, execution of 34” subsea New Main Gas Line (85km) project is underway and expected to be commissioned by Dec’2024.

c.    ACG Azerbaijan:

During FY’23, average JV, oil production rate was about 404,000 bopd and gas production rate was about 9 MMSCMD. A total of 16 Wells viz. 11 Producers, 4 Water Injectors & 1 Non-Associated Gas (NAG), were completed in the year. Construction of Azeri Central East (ACE) New Platform with 48 slots, at Capital Cost of USD 3.3 Billion was 86% complete as on Mar’23. The platform will cater to Incremental oil production of 300 MMBBLS till end of contracts in 2049. First oil from the ACE platform is expected by March’24.

d.    GPOC/SPOC South Sudan:

Average JV, oil production rate for FY’23 was about 37,000 bopd. Drilling of Infill wells commenced in Nov 2022 and results were encouraging. Out of the 4 wells drilled, 2 wells were producing 1,900 bopd and the remaining 2 wells were under completion. The project has received 2 years extension for exploration period of blocks 1, 2 and 4 effective from 26 February 2023.

e.    BM-SEAL-4 Brazil:

Development Plan (DP) and Production Individualization Agreement (AIP) have been submitted to the Regulator (ANP) on 1 November 2022. The Operator has commenced the bidding process for shared FPSO and development activities to meet the target of first oil & gas in calendar year 2028.

f.    Sakhalin-1 Project

The year commenced with Sakhalin-1 JV producing about 210,000 bopd in accordance with the planned production profile. However, following the Russia-Ukraine conflict, erstwhile Operator ENL started production curtailment and declared Force Majeure on 21 April 2022. Production was altogether stopped in September 2022. On 7 October 2022, President of Russian Federation (RF) issued Decree and RF Government issued Resolution dated 12 October 2022, transferring all rights & obligations of Sakhalin-1 Consortium to a newly formed entity; Sakhalin-1 LLC. As required by the decree, ONGC Videsh submitted its notice of consent to retain its stake in the project on 8 November 2022. The Government of Russian Federation, approved for ONGC Videsh to retain its existing participating interest in the project, subject to fulfilling obligations towards the transfer of accumulated abandonment funds to Sakhalin-1 LLC’s current account.

As of 31 March 2023, the project production levels

were back to normal levels of approx. 200K bopd and drilling activities have also resumed. Furthermore, ONGC Videsh has received the accumulated Abandonment Funds in its account at SBI, GIFT City, Gandhinagar, India on 5 April 2023 to further comply with the said condition precedent.

g.    Rovuma Area-1:

Following deterioration of security situation in Palma district since March 2021, the Operator evacuated all personnel from the site and subsequently, on 11 May 2021, declared Force Majeure (FM). Recently, the operator has reported alignment of understanding with Government of Mozambique (GoM) on security matters while acknowledging significant improvement in security situation and believes if the progress continues in the same trajectory, restart of project activities is possible in near future. In anticipation of the restart, the Area 1 consortium has already commenced some preparatory works at the project site.

h.    Myanmar A1 & A3

Average JV, gas production rate of the project for FY’23 was about 15 MMSCMD. Phase II Development of the projects was successfully completed in Aug 2022 and production from additional 7 wells was started, with this the Project is expected to maintain production of contracted quantity of 500 MMSCFD till 2026 or early 2027.

i.    Vietnam Block 06.1

Average JV, gas production rate for FY’23 was about 4 MMSCMD. Although the block is nearing its end of life and production from the block has fallen substantially, the Consortium with an objective to continue production from the existing fields and to explore the clastic areas, applied for extension of the Production Sharing Contract (PSC). The host Government has granted 16 years extension of the PSC, with effect from 19 May 2023.

B. Hindustan Petroleum Corporation Limited (HPCL)

Your Company held 54.90% equity shares in HPCL on 31 March 2023 and HPCL is a Schedule ‘A’, Maharatna, and listed entity operating for 100 years with Pan India presence. Government of India had transferred its 51.1% equity in HPCL to ONGC in 2018. HPCL owns and operates 2 major refineries -one at Mumbai (9.5 Million metric tonnes per annum - MMTPA) and the other one at Visakhapatnam (8.3

MMTPA). HPCL has 19.14% domestic market share in petroleum products. It also owns and operates the largest Lube Refinery in the country with a capacity of 428 TMT (thousand metric tonne). HPCL has a vast marketing network of Supply & Distribution infrastructure comprising of Terminals, Installations, Tap-off Points, LPG Bottling Plants, Aviation Service Facilities, Lube Blending plants, Lube depots and various customer touchpoints across the country. HPCL has its Research & Development Centre named ‘HP Green R&D Centre’ in Bengaluru.

During FY’23, HPCL refineries at Mumbai and Visakhapatnam achieved combined refining thruput of 19.09 MMT. HPCL achieved highest ever sales volume of 43.45 MMT compared to previous year’s sales of 39.14 MMT. During the year, HPCL crossed a key milestone of 21,000 Retail Outlets with commissioning of 1,161 Retail outlets during FY’23 taking the total Retail Outlets to 21,186. Further, 40 new LPG distributorships were commissioned during the year taking the total number of distributors to 6,283 as of 31 March 2023.

The combined Gross Refining Margin (GRM) for HPCL Refineries for FY’23 worked out to USD 12.09 / bbl compared to USD 7.19 /bbl in the corresponding previous year.

HPCL had 21,186 retail outlets, 17 cross country pipelines covered length of 5,132 kms (making HPCL second largest Petroleum product pipeline Company in India), 55 LPG plants, 6,283 LPG distributors; 43 Petroleum, Oil & Lubricants (POL) terminals & 72 POL depot, 1387 CNG dispensing station, 54 aviation services facilities; 2037 EV charging facilities as on FY’23.

During FY’23, HPCL recorded Loss After Tax of '89,740 Million as compared to Profit After Tax of '63,826 Million for the previous year. Revenue from operations for the FY’23 was '4,661,924 Million as compared to '3,738,967 Million during the previous year.

C. Mangalore Refinery and Petrochemicals Limited (MRPL)

Your Company held 71.63 % equity shares in MRPL, a Schedule ‘A’ Mini Ratna company and listed entity, which is a single location 15 MMTPA Refinery. Further, HPCL, also holds 16.95% equity shares in MRPL.

MRPL’s refinery is established with a versatile design with complex secondary processing units and a high flexibility to process Crudes of various API, delivering

a variety of quality products. Refining Net throughput of MRPL during FY’23 increased by almost 13.8 % to 17.14 MMT against 15.05 MMT during FY’22.

In FY’23, GRM for MRPL was USD 9.88 /bbl against USD 8.60/ bbl during FY’22. During the year the company has added 31 Retail Outlets making total retail outlets to 63 as on 31 March 2023.

In a remarkable turnaround, MRPL registered a standalone turnover of '1,247,360 Million (?860,944 Million in FY’22) and recorded profit of '26,384 Million (against Profit of '29,553 Million in FY’22) during FY’23.

D.    Petronet MHB Ltd (PMHBL)

Your Company, together with its subsidiary HPCL, hold equity shares of 49.996% each in PMHBL. With your Company’s holding of 54.9% in HPCL, the extent of its holding in PMHBL comes to 77.44% and makes PHMBL a subsidiary of ONGC. PMHBL owns and operates Mangalore - Hassan - Bengaluru JV pipeline (362.3 Km) to transport MRPL’s petroleum products to various parts of Karnataka State.

PMHBL achieved a thruput of 3.894 MMT in FY’23 against 2.841 MMT in FY’22 and reported total income of '1,683 Million in FY’23 (Tl,282 Million in FY’22) and recorded a net profit (PAT) of '847 Million in FY’23 C603 Million in FY’22).

Associates and Joint Ventures:-

E.    ONGC Petro additions Limited (OPaL)

OPaL is a mega petrochemical project established in Dahej SEZ and incorporated in 2006 for utilizing inhouse production of C2-C3 and Naphtha from Hazira and Uran units of your Company. Your Company, GAIL and GSPC held 49.36%, 49.21% and 1.43% of equity shares of OPaL respectively on 31 March 2023.

Company has successfully completed its first major turnaround (MTA) in FY’23. During FY’23, Revenue from operations of OPaL was '145,930 Million C160,475 Million in FY’22) and posted loss of '41,555 Million against loss of '5,347 Million in FY’22.

F.    ONGC Tripura Power Company Limited (OTPC)

OTPC was incorporated in 2004 as a joint venture of your Company. Your Company held 50% of its shares as on 31 March 2023.

OTPC has a 726.6 MW gas based Combined Cycle Power Plant at Palatana, Tripura with two generating units with equal capacity. The basic objective of

the project is to monetize idle gas assets of your Company in landlocked Tripura State and to boost exploratory efforts in the region.

Average Plant load factor for FY’23 was about 77% against 64% in FY’22 and power generation increased from 4,124 Million Units (MU) in FY’22 to 4,741 MU in FY’23.

Revenue from operations during FY’23 was '16,315 Million C12,640 Million in FY’22) and Profit After Tax (PAT) was ' 2,011 Million during FY’23 C1,066 Million during FY’22). OTPC has declared total dividend of '1.30 Per share in FY’23 including proposed final dividend of '0.60 per share.

G.    ONGC TERI Biotech Limited (OTBL)

OTBL is a JV incorporated in 2007 by your Company (49.98%) along with The Energy Research Institute (TERI) (48.02%) and the remaining 2% shares are held by individuals. OTBL has developed various Biotechnical Solutions for oil and gas Industry through collaborative researches involving the Company and TERI. The company has paid maiden dividend @ 10% of the paid up share capital, amounting to '25 Million during the FY’23.

Revenue from operations of OTBL during FY’23 was '370 Million ('188 Million in FY’22) and Profit After Tax (PAT) was '192 Million during FY’23 C86 Million during FY’22).

H.    Dahej SEZ Limited (DSL)

DSL, a 50:50 JV of your Company along with Gujarat Industrial Development Corporation (GIDC), was incorporated in 2004 for establishing a multi-product SEZ at Dahej. Your Company has set up C2-C3 Extraction Plant as a value-chain integration project in this SEZ, which serves as feeder unit to OPaL, JV of your Company.

Revenue from Operations of DSL during FY’23 was '757 Million (provisional) against '666 Million in FY’22 (audited) and PAT was '381 Million during FY’23 (provisional) against '470 Million (audited) during FY’22.

I.    Mangalore SEZ Limited (MSEZL)

MSEZ is a JV, under Special Economic Zone and was promoted by your Company with an equity stake of 26%. MSEZ, was incorporated in 2006 for development of necessary infrastructure to facilitate and locate industrial establishments. MSEZ is operational since April 2015.

 

Revenue from operations of MSEZ during FY’23 was '2,036 Million (?1,924 Million in FY'22) and Profit After Tax of '72 Million during FY’23 (Net loss of '199 Million during FY’22).

J.    Pawan Hans Limited (PHL)

PHL, is an Associate of the Company, with 49% holdings, and the Government of India holding remaining 51%. PHL was formed primarily for catering to the logistic requirements of offshore and other remote area oil fields. PHL is a Mini Ratna-I Category PSU, having a fleet of 43 helicopters.

K.    Petronet LNG Limited (PLL)

Petronet LNG Limited (PLL), an associate of your Company, which was incorporated in 1998 with 12.50% equity holding along with identical stakes held by other Oil PSU co-promoters viz., IOCL, GAIL and BPCL, is a listed Company. PLL, the largest company in the country in supply of LNG, has set up the country's first LNG receiving and regasification terminal at Dahej, Gujarat, and another terminal at Kochi, Kerala. While the plant at Dahej terminal has 17.5 MMTPA capacity, the Kochi terminal has capacity of 5 MMTPA.

During FY’23, PLL recorded revenue from operations of '598,994 Million and Profit After Tax (PAT) of '32,399 Million. PLL paid a special dividend of '7 per share and has proposed a final dividend of '3.00 per share for FY’23.

L.    Indradhanush Gas Grid Limited (IGGL)

Your Company has subscribed 20% equity capital in IGGL, a JV company promoted by your company in association with IOCL, GAIL, OIL and NRL. IGGL was incorporated in 2018 for the purpose of laying 1,656 KM pipeline covering north-east states with a capex of '92,650 Million. MoPNG has approved Viability Gap Funding (VGF) of '55,590 Million which is 60% of the project cost. Surveying, ROU acquisition and Pipeline laying in various sections is under progress. Physical progress of 70.01% has been achieved till 31 March 2023 with a cumulative financial expenditure of '42,186 Million.

M.    Rohini Heliport Limited (RHL):

Your Company has subscribed 49% equity capital in Rohini Heliport Limited with Government of India’s stake as 51%, RHL is a mirror company of Pawan Hans Limited, incorporated in 2019 for enabling disinvestment of PHL.

N. Companies Which Have become/ ceased to be Company’s Subsidiaries, Joint Ventures And Associates Companies during FY’23

a)    Companies which has become subsidiaries: NIL.

b)    Companies which has ceased to be subsidiaries: NIL.

c)    Companies which has become a joint venture or associate: NIL.

d)    Companies which has ceased to be a joint venture or associate: NIL

27.    Make in India

To promote “Atmanirbhar Bharat”, ONGC has introduced Development Order Policy in December 2020 for goods and services after delinking it from routine tender process to make the process easier and continuous. The policy enables vendor to offer product at any point of time.

ONGC has been able to localize 18 products through 23 successful development orders, another 14 products/services are in development by 16 Indian manufacturers.

28.    ONGC Start-Up Initiative

‘ONGC Start-up Fund’, conceptualized in line with the ‘Start-up India’ initiative, launched by the Hon’ble Prime Minister of India, was established to foster, nurture and incubate new ideas related to energy sector. The Fund supports and promotes an ecosystem in the Energy Sector for entrepreneurship among the younger Indians.

ONGC Start-Up Fund supported 23 start-ups with applications in energy sector. The financial commitment to these Start-Ups was '757.70 Million as on 31 March 2023.

29.    Procurement through Government e-Marketplace (GeM)

In line with directives of Government of India, your Company has been making all efforts to enhance procurement of goods and sevices through GeM portal. During FY’23 ONGC’s total procurement through GeM was '71,783.70 Million. ONGC ‘s efforts were also recognised by Ministry of Commerce during “GeM Kreta Vikreta Samman Samaroh 2023” wherein ONGC was awarded Gold buyer award under Highest Service procurement category for FY’23.

30. Facilitation for payment of invoices through TReDS Portal

In line with the initiatives of Government of India, your Company is registered on TReDS platform with M/s RXIL, M/s MYND Solution (M1xchange) and M/s A TREDS Ltd. (Invoice Mart), to help MSME vendors get immediate access to liquid fund based on Buyers (i.e. ONGC’s) credit rating by discounting MSMEs trade receivables through an auction mechanism where multiple financers can participate and bid. MSME vendors can avail this benefit by registering themselves with any of the exchanges providing e-discounting/ electronic factoring services on TReDS platform where ONGC is also participating in such TReDS Platform as a Buyer. Such exchanges with participation of ONGC are being notified from time to time.

The details of invoices discounted through TReDS system during FY’23 were as under:

Name of TReDS Platform

No. of Invoices discounted through TReDS

Value of invoices discounted (' in Million)

MYND Solution (Mlxchange)

77

401.60

RXIL

22

37.80

A TREDS Ltd. (Invoice Mart)

Nil

Nil

31. Health, Safety and Environment (HSE)

ONGC accords topmost priority to the Health, Safety and Environment (HSE) management by carrying out its operations ensuring zero harm to the people and the environment. Operations of ONGC, mainly exploration and production activities, are highly hazardous and risky. HSE in ONGC’s operations is guided by HSE Policy and HSE management system. In addition there is also dedicated Environment Policy and e-waste policy.

ONGC, in order to maintain highest standards, goes beyond the Regulatory requirements and practices proactive HSE Management System. The HSEMS is based on International Standards, ISO 9001, ISO 45001 and ISO 14001.

HSE Initiatives:

a) Compliance to HSE management systems, as well as to prevalent rules, regulations, guidelines and standards is checked during internal audits, being conducted by multi-disciplinary teams of the Company. The same are also checked by external authorities like Oil Industry Safety Directorate (OISD) and Directorate General of Mines Safety (DGMS).

i.    Multi-disciplinary Teams conducted 293 Internal Safety Audits (ISAs) in 2022-23. The overall compliance status of ISA observations as on 31 March 2023 was 93.43 per cent.

ii.    OISD, conducted audits at 110 Installations in 202223. The overall compliance status of the observations raised by OISD as on 31 March 2023 was 87.54 per cent.

iii.    DGMS, carried out inspections at 164 Installations in 2022-23. The overall compliance status for the contraventions raised by DGMS as on 31 March 2023 was 96.87 per cent.

b) An expert consultant was engaged by ONGC to carry out gap analysis of existing systems and practices of ONGC and assist in improving safety culture. To further strengthen the Safety culture of the organization Project ‘Parivartan’ is being implemented across the organization. Under Project ‘Parivartan’ the following 10 Strategic HSE Goals have been finalized:-

•    Achieve culture of leadership excellence with an average score of 90% for the leadership process by 2025;

•    Significantly improving management system culture by achieving average safety rating 7 out of 10 across all installations by 2025;

•    Transformation of prevailing Bureaucratic System Culture to a Learning Organization Culture by 2027;

•    Building Risk Competency based on Training Needs Analysis by 2025;

•    Ensure Total Safety of the asset through a systematic implementation of Asset Integrity Management by 2027;

•    Ensure Risk based Contractor Management System is fully embedded into the Project Management by 2023;

•    Sustain and / or improve on Loss Time Injury Frequency Rate Loss Time Injury Frequency Rate (LTIFR) by achieving result better than an average Industry Rate by 2027;

•    Design, Create and Implement Safety Management System Benchmarking (Internal & External) by 2025;

•    Resorting to Green initiatives for Zero Emission Pathway in backdrop of climate crisis and Fasttracking of Forest clearances through adopting

proactive approach; and

• Elimination and mitigation of occupation related health impacts and introduction of new initiatives for health improvement.

These strategic goals are being implemented through Syndicates, consisting of Key Executives and Senior HSE officials. The progress is reviewed by Higher Management at regular basis to ensure time bound achievement of the targets.

c)    During FY’23, 18,995 mock drills were conducted, including 18,971 ERP (Emergency Response Plan), 16 Onsite DMP (Disaster Management Plan), 6 Offsite DMP and 2 RCP (Regional Contingency Plan) mock drills.

d)    Mines Vocational Training (MVT), a mandatory training as per Mines Act, is being imparted to both employees and contract personnel through inhouse training centres. MVT was provided to 3,218 personnel (1,110 Company Employees and 2,108 Contract Personnel) in 2022-23.

e)    The Near Miss reporting and timely closure is being emphasized through advisories, awareness programs and competency building exercises. Monthly Near Miss Analysis and Reports are being issued for sensitization and actions in this regard. In order to further encourage the work centres to report the Near Miss in SAP and close them by taking required action, best performers are being recognized.

f)    Every quarter, Safety Champion and Safe Installation awards are being declared by Assets/ Plants/ Basins and the winners are being duly recognized as motivation for commendable safety performance by all.

g)    Implemented SAP based E-PTW (Electronic Permit to Work) which maintains system based checks & balances, eliminates possibility of bypass of procedures and creates trail of documentation for data analysis.

h)    HSE Benchmarking of all ONGC installations has been done on various HSE parameters in SAP by designing a HSE Index.

i)    The processes of Management of Change (MoC) has been streamlined and SAP based MoC module has been developed for ensuring adherence to MoC procedures.

j)    To address any unsafe act or unsafe condition, Stop Card program has been implemented which

empowers any personnel to use Stop Card to stop a work if it is noticed that the risk associated with any job is unattended or a person is doing work in unsafe manner. The system enables immediate action on the risk through prompt actions.

k)    Corporate Disaster Management Plan (CDMP) has been revised, incorporating DMP-2020 of MoPNG, NDMP-2019, MoPNG guidelines on COVID-19 & cyclone Tauktae and High Level Committee’s recommendations on cyclone Tauktae.

l)    Dedicated webinars and workshops are being conducted through online platforms, covering ONGC and contract personnel, on specific HSE topics through domain experts.

m)    In order to enable the workforce to readily access the HSE related information, guidelines, standards, manuals, documents, circulars etc., on their fingertips, a dedicated HSE website and App has been introduced. The same is accessible anytime to all ONGC employees posted at various work centers.

n)    Environmental Clearances: ONGC received 18 Environment Clearances (ECs) for drilling of 106 exploratory wells, 115 development wells and construction of 1 production facility.

o)    Waste Management

i.    Waste Water Management: ONGC monitors the waste water usage and maintains the quality of effluent discharged conforming to statutory requirements specified for discharge of treated effluent at surface/ subsurface. The Company has 41 number of Effluent Treatment Plants across onshore work centres to treat approx. 1,04,000 m3/day of waste water produced during E&P operations. For Offshore effluent treatment, Produced Water Conditioners (PWCs) have been installed at process platforms. Sewage Treatment Plants for treatment of sewage water generated are also provided at offshore facilities.

ii.    Hazardous Waste Management: The Hazardous Waste generated in the form of oily sludge/oil contaminated soil are treated using bio-remediation technique in which oil eating consortium of bacteria is used to break down hazardous substances into nontoxic substances, thereby ensuring environmentally safe disposal of waste. It is ensured that the Total Petroleum Hydrocarbon (TPH) of the treated oily sludge is less than 0.5% (5000 ppm) in consonance with the Hazardous and Other Wastes (Management and Trans-boundary Movement) Rules, 2016. During 2022-23, 93,151 Metric Tons of oily sludge/oil

contaminated soil has been bio-remediated.

iii. Recovery from Waste: During the process of restoration of oil spillage area, about 6,523 m3 of Oil has been recovered from the oil contaminated soil during 2022-23 which was sent back to the production installations.

p)    A project for conservation of bio-diversity which aims to plant mangroves in an area of 10 ha and protection of the Endangered Olive Ridley Turtle in the Karaikal District of Puducherry has been taken up. The project commenced in August 2022 with various activities planned in 3 years duration.

q)    Oil Spill Management in Offshore operations:

ONGC is having a robust oil spill management system to address oil spills ranging from minor to significant volumes. The Indian Coast Guard (ICG) is designated as a central coordinating authority by the Government of India for combating oil spills in Indian waters and undertaking oil spill prevention and control. As per the National Oil Spill Disaster Contingency Plan (NOS-DCP) promulgated by ICG, ONGC is maintaining its own Tier-I oil spill response equipment and manpower onboard multi-support vessels in its operational area. For Tier-II level oil spill, ONGC is relying on Indian Coast Guard and ONGC’s mutual aid partners and for Tier-III oil spill, ONGC is maintaining participant membership of Oil Spill Response Limited (OSRL), UK, through which ONGC is having guaranteed response and access to OSRL’s worldwide resources comprising of Booms, Skimmers, Oil Spill Dispersants stockpile, storage equipment, specialized manpower etc. ONGC has a MoU for oil spill response co-operation with Mumbai Port Trust, Jawaharlal Nehru Port Trust and Participating Oil Companies for maintaining Tier-I oil spill response facility & services in Mumbai Harbour.

In addition, ONGC has also developed its own oil spill contingency plan to deal with oil spill incidents and eventualities. ONGC conducts internal oil spill mock drills and also participates in regional and national level mock drills organized by the Indian Navy and Indian Coast Guard. Annual returns on preparedness for oil spill response is being filed annually to ICG.

32. Carbon Management and Sustainable Development

Sustainable Development is the standard template in the Company and this finds expression in our commitment to continually enhance the benchmarks of economic, environmental and social performance.

The major endeavours towards corporate sustainability were as under:

Clean Development Mechanism (CDM):

Your Company had 15 CDM projects registered with the United Nations Framework Convention on Climate Change (UNFCCC) under the Kyoto protocol since 2006.

ONGC is also continuing the Verification/Renewal of existing CDM projects as well as finding opportunities for Registration of new CDM projects.

Greenhouse Gas (GHG) Accounting and Mitigation:

ONGC aims to reduce GHG emissions by focusing on improved energy efficiency. The scope-1 and scope-2 emissions during FY’23 was 8.897 MMTCO2e a reduction of about 2.66% from the previous year.

Global Methane Initiative (GMI):

The GMI is an action-oriented initiative from United States Environment Protection Agency (USEPA) to reduce global fugitive methane emissions to enhance economic growth, promote energy security, improve the environment, and reduce greenhouse gases emission. During FY’23 leak detection survey was carried out in Hazira and Uran plant.

Solar and Wind energy initiatives:

The total installed capacity of renewable energy as on 31 March 2023 was 189.52 MW (Solar: 36.52 MW and Wind: 153 MW).

Replacement of conventional lights with LED lighting:

In line with the Government of India’s call for promoting efficient energy use (Ujala Scheme), ONGC entered in to a MoU with Energy Efficiency Services Limited (EESL) for replacement of all conventional lights in ONGC in a phased manner. However, incandescent lamps, tube lights and CFLs were immediately replaced. During FY’23, ONGC installed 4,344 LED lights making a total of 355,344 LED lights installed so far.

Carbon Capture, Storage and Utilisation (CCSU)

Carbon Capture, Storage and Utilization (CCSU) is a critical CO2 emission abatement technology that can prevent large quantities of CO2 from being released into the atmosphere. Considering its benefits, ONGC entered into a MoU with Indian Oil Corporation Limited

(IOCL) for CO2 based Enhanced Oil Recovery (EOR). Under this initiative, the CO2 captured from the IOCL’s Koyali refinery will be utilized for EOR in the depleting oil fields of ONGC in Gandhar field, near Vadodara. The project has the potential for sequestrating 5 to 6 Million TCO2 by the year 2040.

33.    Internal Financial Control System:

Your Company has put in place adequate Internal Financial Controls by laying down policies and procedures to ensure the efficient conduct of its business, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information commensurate with the operations of the Company. Effectiveness of Internal Financial Controls is ensured through management reviews, self-assessment and independent testing by the Internal Audit Team indicating that your Company has adequate Internal Financial Controls over Financial Reporting in compliance with the provisions of the Companies Act, 2013 and such Internal Financial Controls are operating effectively. The Audit Committee/ Board reviews the Internal Financial Controls to ensure its effectiveness for achieving the intended purpose. Independent Auditors Report on the Internal Financial Controls of the Company in terms of Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 by the Statutory Auditors is placed along with the Financial Statements.

34.    Conservation of Energy, Technology Absorption and Foreign Exchange earnings & Outgo:

The information as required under section 134(3) (m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, is annexed as Annexure-C.

35.    Business Responsibility and Sustainability Report

Business Responsibility and Sustainability Report (BRSR) is annexed as Annexure-D and forms part of the Board’s Report.

36.    Management Discussion and Analysis Report

As per regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Management Discussion and Analysis Report (MDAR) forms part of this Report.


37.    Corporate Governance

A report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also on DPE Guidelines on Corporate Governance, 2010 forms part of the Annual Report.

38.    Human Resource Development

Employees are our most valuable resource driving the Company to unparalleled excellence in the energy business. As a strategic business partner, your Company’s HR practices are in alignment with its vision to be global leader in the integrated energy business. Our HR vision is to build and nurture a world class human capital for leadership in energy business, by continuously innovating and adopting best-in-class HR practices to support business leaders through engaged, empowered and enthused employees.

As on 31 March 2023, there were 25,993 employees on the rolls of ONGC. Your Company empowers these dedicated energy soldiers through its HR strategies focused on workforce planning, talent acquisition, performance management, learning & development, career growth, succession planning, leadership development and on enhancing employee experience and engagement by extending best of employee facilities, welfare benefits and work environment.

Capacity building of strong workforce of 25,993, to cater to both current and future work requirements is a major thrust area. The challenging and transitioning E&P business environment calls for accelerated development of employee knowledge, skills and competencies. Your Company therefore, has dedicated Institutes providing focused and relevant learning & development opportunities to employees. With a view to build a leadership pipeline and providing healthy balance of both academic and field exposure to its energy professionals, ONGC has tied up with a number of national & internationals institutions, agencies and business schools. During FY’23, 19,846 executives and 5,506 non-executives were imparted training in relevant domains, spanning 66,806 executive and 13,764 non-executive training days.

Learning Management System: During the year, ONGC Academy, on-boarded Learning Management Software of Ministry of E&IT and National Programme on Technology Enhanced Learning (NPTEL) developed by seven Indian Institutes of Technology,

with the objective of enhancing knowledge and skills of executives. Various components of the system have been successfully tested and rolled out.

Leadership Development: Your Company has structured and strategic learning and development initiatives focused at nurturing the right technical and managerial abilities at all executive levels to build energy leaders of tomorrow.

Harvard Manage Mentor program is one such initiative being offered to 3,100 executives, involving self-paced, anywhere anytime learning, assessments and real time personal guidance. The program covers E2 to E4 level executives under the buckets Managing Yourself, E5 to E6 - Managing others & E7 & above under Managing the Business.

Employee Engagement: In FY’23, ONGC implemented a gamut of employee engagement activities to promote a culture of open communication, trust, sense of belonging, team spirit, innovation and excellence. Some highlights are as follows:

i.    A 2-day Youth Meet was organized in August 2022, to bring together about 250 young officers from different work centres in a live and energetic physical setup for experiencing, first-hand, the ONGC corporate ethos. During the 2019 -21, all new joinees underwent virtual on-boarding on account of the pandemic restrictions. This Youth Meet allowed them to initiate organizational friendships, expand social network and improve batch camaraderie. The youth meet created an opportunity for the new joinees to interact with ONGC Executive Committee, hear leadership perspectives and understand their Company’s journey, energy transition, corporate strategies and its national impact. The Youth Meet saw a confluence of young ideas emerge through power packed discussions with top management. The event included a series of competitions, live Energy and Business Management Quiz, Youth Executive Committee meeting and interactions with national youth icons such as Virender Sehwag and Chetan Bhagat.

ii.    In ONGC the formal mentoring initiative was

introduced in 2008. ONGC management reintroduced the mentoring framework in 2021 with a perspective to create an informal social learning opportunity that allowed for knowledge transfer, professional and personal development of young officers who joined the organization during the pandemic outbreak. In FY’23 approximately 650 new mentors and around 600 mentees have been initiated into the mentoring

program. The mentee and mentors are also being given mentoring handbooks to capture their discoveries, reflections and document their learnings.

iii.    With a focus on connecting with the younger generation, more than 30 People Connect Sessions were conducted across work centres for improved engagement & interaction of key executives and seniors with work teams.

iv.    Annual ONGC Business Games was successfully conducted to hone competencies such as strategic thinking, business acumen, entrepreneurial learning, decision making, critical thinking and collaboration in a competitive scenario under simulated business constraints. During FY’23, a total of 217 teams and 868 executives participated in these games.

v.    Fun Team Games were also conducted for E0 and below level employees as a capacity building and employee engagement initiative to enhance coordination, cooperation, communication, planning, result orientation, mental/physical dexterity among the participants, wherein more than 380 nos. of employees participated in the event.

vi.    A special executive presence program was

conducted for senior level executives. The program was held over a four-week duration, in a hybrid module combining both in-person sessions and online learning sessions on LMS. The program focused on the journey of personal transformation that reflects in a person’s brand and the high intrinsic value that he/ she adds to the organization through their presence, knowledge and individual contribution.

Digitization of HR Processes: In line with your Company’s HR vision of continuous innovation and adopting best-in class practices, a number of digital initiatives were taken up towards improved employee processes, HR workflows etc. During the FY‘23, ONGC has digitized the Loans and Advances process and the nomination process for various Trusts.

Employee Recognition:

Your Company observed its Annual Awards 2022 with great enthusiasm on 19 February 2023, in Jaipur, to recognize its promising employees in different categories. This gala award ceremony was conceptualized to engage and inspire the employees of the organization to achieve greater heights and contribute to the organization and the nation altogether. The idea was to connect to the employees by applauding their achievements and making them feel recognized as great assets to the organization.

Employee Welfare: Your Company introduced new policies and such as paternity leave to male employees on adoption of a child, medical facilities for dependent parents of retired employees, additional financial support in case of death/disablement due to accident on duty, payment of ex-gratia to secondary workforce who succumbed to Covid-19, and reviewed existing policies leading to enhancement of ad-hoc payment under ONGC Composite Social Security Scheme and revision of guidelines for home nursing care.

Work- Life Balance: ONGC focuses on employee well-being by promoting healthy work-life balance. Enhancing employee experience is a priority and your Company achieves this through well-developed facilities like gymnasiums, clubs, sports facilities and music rooms in its townships. Facilities for gym, sports, yoga, library, etc. are also offered in ONGC’s offshore living quarters.

Your Company also recognizes and supports Collectives and other groups like Officers’ Club, Women Development Forum, Employee Welfare Associations, Resident Welfare Association, etc. in each of its work centres. These Collectives and affinity groups organized various sports, cultural and community events, which brought employees together and built a sense of camaraderie and collective belonging.

‘ONGC Himalayan Association’ has continued to foster the spirit of adventure and oneness with nature in its employees by organizing activities like mountaineering, trekking and water rafting.

Health and Wellbeing: Wellness Centres have been set up at various work centres of ONGC to provide consultations/ counselling to employees and their dependent family members, especially on issues related to mental health and well-being.

Employee Welfare Trusts:

Your Company has established the following Trusts for welfare and social security of employees:-

•    Employees Contributory Provident Fund (ECPF) is an exempted PF Trust established by your company under EPF&MP Act 1952. The Trust manages the Provident Fund of the employees.

•    Post-Retirement Benefit Scheme (PRBS) Trust manages the pension fund of employees of your company.

•    Composite Social Security Scheme (CSSS) formulated by your Company provides an assured

ex-gratia payment in the event of unfortunate death or permanent disability of an employee while in service.

•    Gratuity Fund Trust has been established for payment of gratuity as per the provisions of the Gratuity Act.

•    ONGC Post-Retirement Medical Benefits (PRMB) Trust has been established during the year to manage the funds for the post-retirement medical benefits of employees.

•    ONGC Leave Encashment Trust has been established to manage the funds for the Earned Leave encashment benefits of employees.

•    The ‘Sahyog Trust’ has also been set up by your Company for its Sahyog Yojana aimed at providing ex-gratia financial grant for sustenance, medical assistance and treatment, rehabilitation, education, marriage of female dependent and alleviation of any hardship or distress to workforce and their kin, who lack other means of support. Under this scheme, support is offered to casual, contingent, daily rated, part-time, ad hoc, contract appointees, and tenure-based employees, apprentices and trainees engaged by your Company besides regular and past employees.

•    The Asha Kiran Scheme is also in place to meet the emergency needs of the ex-employees retired prior to 1 January 2007. The scheme was launched as per DPE guidelines with a corpus of 1.5% of profit before tax.

Implementation of Govt. Directives for Priority Section

ONGC recognizes its responsibility towards welfare of SC and ST communities and complies with the Government directives in this regard. The percentage of Scheduled Castes (SC) and Scheduled Tribe (ST) employees were 15.4 percent and 11.3 percent respectively as on 31 March 2023.

Your Company carried out following welfare activities for their betterment in and around its operational areas:-

i. Annual Component Plan: An allocation of '200 Million is made every year under the Annual Component Plan. Of this, '60 Million is allocated to work centres for taking up welfare activities for local communities in operational areas. The remaining '140 Million is managed centrally, and is earmarked for taking up welfare initiatives (education, training, community development, medical and healthcare)

 

for the welfare of areas/persons belonging to SC/ST communities.

ii. Scholarship to meritorious students: To

support higher education of meritorious SC & ST students, 1000 scholarships are offered annually to SC & ST students for pursuing Engineering, MBBS, Geosciences and MBA courses. An amount of '48,000/- per student per year is offered, subject to fulfilment of conditions under the scheme.

Diversity & Inclusion: ONGC is an equal opportunity employer. ONGC adheres to constitutional and government guidelines on creating opportunities for employees and promotes employee development, irrespective of their caste, creed, race, gender, specially-abled status etc. Employees are empowered with best in industry support and opportunities, enabling them to excel in their professional and personal lives. Sufficient representation in terms of diversity, as per government guidelines, is ensured.

Women Development: Women employees constituted 7.8 per cent of ONGC’s workforce as on 31 March 2023. Your Company has been a pioneer in promoting inclusive workplaces practices that support career growth of women and enhance leadership capabilities of women. A focused programme on Women Leadership Development Urjasvini-NextGen, was launched for a batch of 25 young women executives at E2 - E4 level by ONGC during FY’23, to mentor and develop high-potential women executives for middle management roles, laying the foundation for furthering their leadership aspirations as future leaders of ONGC.

As part of an initiative called Voice of Oil Women (VOW) which was started in January 2022, ONGC’s Women Development Forum (WDF) Chapters, continued to organize online sessions every month for knowledge sharing, learning and networking amongst the women fraternity.

Inclusion of Persons with Disabilities (PwD): Your Company’s infrastructure and facilities provide an enabling environment to Persons with Disabilities, supporting them to effectively discharge their duties. Due consideration is provided to PwD employees in matters of recruitment, job assignments, transfers, accommodation and leaves. In an effort towards creating an equitable environment where PwDs can connect, play sports and build sense of community, your Company organizes the ONGC Para Games. ONGC is the only public sector enterprise to organize Para Games to promote sporting talent of Persons

with Disabilities.

The Hon’ble Minister of Petroleum and Natural Gas inaugurated the 4th ONGC Para Games in Thyagaraj Sports Complex in Delhi on 2 August 2022. 275 specially-abled employees from eight central oil and gas public enterprises participated in the 4th ONGC Para Games being held during 2 to 4 August 2022. 192 ONGCians were among the participants.

Disclosure under the Sexual Harassment: ONGC has complied with the provisions under the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013. As per the provisions under the Act, Internal Complaints Committees (ICC) have been constituted for dealing with complaints of sexual harassment of women at workplace. The members of the ICC have been provided training programs to equip them with relevant knowledge and tact for enquiring into such complaints.

Following is a summary of sexual harassment complaints:

Financial

Number of

Number of

Pending

Year

complaints

complaints

complaints as at

 

received

disposed-off

31 March 2023

2022-23

6

4

2

39.    Industrial Relations

Harmonious Industrial Relations were maintained in your Company throughout the year. Man-days loss due to internal industrial action was reported as ‘NIL’ for FY’23.

40.    Compliance under the Right to Information Act, 2005

A well-defined mechanism is in place to deal with RTI applications received under the Right to Information Act 2005. A senior level officer has been designated as ‘Nodal Officer’ for fulfilling the requirements under RTI Act 2005. 23 executives have been designated as ‘Central Public Information Officers’ (CPIOs) in various work centres across the Company to process RTI applications.

The corporate website of your Company, www. ongcindia.com, has important Information relating to Right to Information Act, 2005 for convenience of general public.

During FY’23, your Company received 1,519 applications (including 58 transferred by other Public Authorities). Against these applications, information

as sought were provided in 1,386 applications, 13 applications were rejected and 35 applications were transferred to other public authorities, 2 were returned to applicants in accordance with the provisions of the RTI Act 2005. There were 247 first appeals, 226 were disposed-off during the period. Total pending requests were 21 as on 31 March 2023.

41.    Implementation of Official Language Policy

In FY’23 your Company took all efforts to promote and implement Official Language Policy. As per the Directives of Parliamentary Committee on Official Language, inspection of the work centers across ONGC were carried out. Paperless office has been made bilingual for effective implementation of Official Language policy. For enabling bilingual working, Unicode has been installed in SAP platform. To achieve the annual target of Official Language by using the applications of Hindi Computing tools, a special workshop/webinar has been conducted for Official Language Executives posted at different work centres of ONGC in association with C-DAC, Pune.

To encourage the employees to do their work in official language, various incentive schemes have been introduced in ONGC such as Best work center Award, Hindi Sevi Karmik Award and Special Hindi Incentive Scheme. A bilingual handbook has also been prepared and uploaded on ONGC’s internal portal or.net for ready reference on Official Language policy.

Besides, ONGC has also conducted Hindi workshops at regular intervals in all work centres. Hindi technical seminars/Webinars, Kavi Goshties, Kavi Sammelan and Hindi plays have been organized at various work centres. The Rajbhasha Fortnight was organized from 14 to 18 September 2022, during which, various competitions, programs and events were conducted. On the occasion of Vishva Hindi Divas, local litterateurs were honoured at the headquarters and other work centres of ONGC.

Hindi Teaching Scheme of Government of India was implemented effectively at all regional work centres of the Company. Besides, Hindi E-magazines are being published to promote paperless Office by all work centres of ONGC. An E-Roster of Employees with working knowledge of Hindi has also been put in place.

42.    Sports

As a responsible Maharatna PSU, ONGC strongly supports the promotion of sports and sportsmen by

offering employment opportunities and scholarships to sportspersons. Your Company’s sponsorship of various sporting associations, federations and events as well as support to develop sporting infrastructure has supported many sportspersons in bringing in accolades to the nation and the organization.

Some of the significant achievements of our sportspersons during the year were as follows:

(i)    Five ONGC sports persons represented country and won medals in Commonwealth Games 2022 at Birmingham (UK):

•    Table Tennis players G. Sathiyan & Harmeet Desai won Gold Medal in team event

•    Badminton Player Ashwini Ponappa won Silver medal in Mix team event.

•    Hockey players Gurjant Singh, Mandeep Singh secured a Silver Medal in Men’s Hockey Team

(ii)    Badminton player H. S. Prannoy was conferred with Arjuna Award for the year 2022 by President of India.

(iii)    The total number of National Awardees in the organization stands at 61:

•    Padma Bhushan - 1

•    Khel Ratna - 2

•    Padma Shri - 6

•    Arjuna Award - 50

•    Dhyanchand Award - 2

(iv)    Other Highlights

•    Badminton player H S Prannoy was part of the Thomas Cup winning team at Bangkok in May 2022

•    Pankaj Advani won the IBSF World Billiards Championship in Kuala Lumpur, Malaysia in October 2022.

•    Rashmi Kumari became the World Champion by winning 8th World Carrom Championship in Langkawi, Malaysia in October 2022. She is 3rd time World Champion and 11th time National Champion.

•    Grandmaster K Sasikiran won the Liffre International Open Chess Tournament, France in October 2022.

•    Shiva Thapa won Silver Medal in Light weight

category at ASBC Asian Boxing Championship, Jordan in November 2022. He consecutively won sixth medal in Asian Boxing Championship 2013, 2015, 2017, 2019, 2021,2022.

•    Sports scholarships in 22 sports were awarded to 214 budding talents

•    To encourage and support women in sports, sports scholarships were also awarded to women in Kabaddi, Wrestling, Boxing, Hockey, Archery etc.

43.    Corporate Social Responsibility (CSR)

As one of India’s foremost Nation Builders, your Company is committed towards its social responsibility. The Annual Report on CSR activities is annexed as Annexure - E.

44.    Regulatory or Courts order

During FY’23, there was no order or direction of any court or tribunal or regulatory authority either affecting Company’s status as a going concern or which significantly affected Company’s business operations.

45.    Material changes and commitments affecting financial position between the end of the financial year and date of the report

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

46.    Directors’ Responsibility Statement

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

a)    In the preparation of the annual accounts, the applicable accounting standards were followed and there was no material departures from the same;

b)    The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31 March 2023 and of the profit of the Company for the year ended on that date;

c)    The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the

Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d)    The Directors had prepared the annual accounts of the Company on a ‘going concern’ basis;

e)    The Directors had laid down internal financial controls which were being followed by the Company and that such internal financial controls were adequate and were operating effectively; and

f)    The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

47.    Annual Return

Pursuant to Section 134(3)(a) read with Section 92(3) of the Companies Act, 2013 Annual Return of the Company is placed at https://ongcindia.com/web/ eng/investors/annual-return

48.    Particulars of Employees

Your Company being a Government Company, the provisions of Section 197(12) of the Companies Act, 2013 and relevant Rules issued thereunder are not applicable.

The terms and conditions of the appointment of Whole-time Directors are subject to the applicable guidelines issued by the Department of Public Enterprises (DPE), Government of India.

49.    Audit Committee

In compliance with Section 177(8) of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and DPE Guidelines on Corporate Governance, 2010 the details regarding Audit Committee is provided under Corporate Governance Report which forms part of Annual Report.

There was no instance during FY’23, where the Board had not accepted any recommendation of the Audit Committee.

50.    Vigil Mechanism:

Your Company has established Whistle Blower Policy/ Vigil Mechanism to report genuine concerns about ethical behaviour, actual or suspected fraud, violation of Code of conduct and also instances of leak of unpublished price sensitive information. The said vigil mechanism provides for adequate safeguards against victimization of persons who use the mechanism and

has provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

Policy of the Company may be accessed at https:// ongcindia.com/web/eng/investors/policies

51. Vigilance Functions:

Your Company has a full-fledged Vigilance Department headed by Chief Vigilance Officer. The Department operates on the guidelines of Central Vigilance Commission on Vigilance management in Public Sector Enterprises and is guided further by instructions issued by the Department of Personnel and Training and MoPNG from time to time.

Complaints are handled as per the complaint handling policies stipulated in Vigilance Manual issued by the Central Vigilance Commission. The prime focus of Vigilance activities has been Preventive and Participative Vigilance by having regular interaction with employees and other stakeholders to spread awareness among the masses.

Details of vigilance cases are provided as under:

Nature of cases

Details of cases

Penalty imposed during the financial year (2022-23)

Cases Pending as on 31 March 2023

Major penalty

16

8

Minor penalty

19

3

52. Reporting of Fraud:

During FY’23, the Company has reported an instance of fraud by way of misappropriation of funds through payment made against fictitious medical bills by one regular and one contractual ONGC Doctor in collusion with a vendor. The relevant details (refer Note 24.5 of stand-alone financial statements) are provided as under:

a)    Nature and Description of fraud: Payment against fictitious medical bills;

b)    Amount involved: '2.41 Million identified till date;

c)    Parties involved, if remedial action not taken: Not applicable; and

d)    Remedial action taken - Based on internal departmental enquiry process, the regular ONGC Doctor involved in the reported fraud has been dismissed from the services of ONGC. Further, services of contractual Doctor have also been

terminated. The empanelment of vendor involved in the fraud, has also been terminated by ONGC. The matter has also been referred to CBI for investigation and criminal prosecution, if any.

In order to prevent recurrence of such instance and to strengthen the internal control mechanism, Internal Audit carried out special audit of medical process and recommended various control measures including empanelment of chain pharmacies, fast track implementation of ONGC Clinical Referral e-system (ONGCares), strengthening of system controls over medical cards for all beneficiaries, stringent compliance of Segregation of Duties (SoD) in medical process, robust communication and acknowledgement mechanism for medical services which are under implementation.

Steps towards streamlining the Medical Services:

Following measures have already been put in place so that such incidence does not recur:

a.    The details of medical treatment advice / medicines prescribed are being sent by SMS at the registered mobile number of the beneficiary employee - regular and separated.

b.    Randomised bill checking: Checking of bills of one work centre by other work centre.

c.    Internal Audit has completed the system study and the suggested changes are being implemented.

53.    Risk Management Policy and Implementation:

The Company has a Board approved Risk Management Policy. Risk framework and Risk portfolio are periodically monitored by the Risk Management Committee, Audit Committee and the Board.

54.    Auditors

The Statutory Auditors of your Company are appointed by the Comptroller and Auditor General of India (CAG). There were 5 Practicing Chartered Accountants firms namely M/s SARC & Associates, M/s Kalani & Co., M/s R.G.N. Price & Co. M/s S. Bhandari & Co. LLP and M/s J Gupta & Co. LLP who were appointed as Joint Statutory Auditors of the Company for FY’23.

The Statutory Auditors have been paid a total remuneration of '55.08 Million towards audit fees, certification and other services. The above fees are inclusive of applicable service tax/ GST but exclusive of re-imbursement of travelling and out of pocket expenses.

Auditors’ Report on the Accounts

Statutory Auditors Reports and the comments of CAG on standalone and consolidated accounts of the Company are placed along with respective financial statements for FY’23. There is no qualification in the Statutory Auditors Reports on the Financial Statements of the Company for FY’23. Further, Comptroller & Auditor General of India (C&AG) in its Supplementary Audit under Section 143(6) read with Section 129(4) of the Companies Act, 2013, has provided “Nil” comments in Consolidated and Standalone Financial Statements for FY’23. The comments of Comptroller & Auditor General of India (C&AG) form part of this Report and is attached as Annexure - F.

55.    C&AG Audit on other matters:

The C&AG conducts audits of various nature viz. Performance Audit, Thematic Audit, Compliance Audit, Follow-up Audits, etc.

As on 31 March 2023, there are twenty five published C&AG reports/paras of previous years, pending at various stages. These are related to Payment of Stagnation Relief, Non-recovery of Perquisite Tax, Payment towards Encashment of Half Pay Leave/ Earned Leave, IT Audit on FI-CO Module of Sap Loss of Interest due to Inordinate Delay in Receipt of Share of Gas Transportation Charges, Delay in Appraisal and Non-Monetisation of the Discoveries in KG-DWN-98/2 Block, Non Achievement of objective of Acquiring Coal Bed Methane (CBM) Blocks, Avoidable Extra Expenditure due to Delay in Procurement of Casing Pipes, Failure to obtain the Share of Cost of Immediate Support Vessels purchased by ONGC for Security of Offshore Assets from private Exploration and Production (E&P) Operators, Non-recovery of pending Cash Calls, Construction of Toilets in Schools by CPSEs, Loss of Returns to ONGC due to Adoption of Financing Mechanism to Maintain the Status of OPaL as a Non-Public Sector Undertaking, Avoidable Payment of Equipment Standby Rentals, Supply of Gas without Security resulted in Non-recovery of Dues, Water Injection Operations in Western Offshore, Loss due to Flaring of High Pressure Gas, Management of Spectrum assigned on administrative basis to Government Departments/ Agencies, etc.

These Audit Paras have been suitably replied and the same are under review of MoPNG or C&AG.

56.    Cost Audit

There were 6 cost accountants firms, namely M/s ABK & Associates, M/s Sanjay Gupta &

Associates, M/s Rao, Murthy & Associates, M/s Shome and Banerjee, M/s Dhanajay V Joshi & Associates and M/s Dewanji & Co. appointed by the Board as Joint Cost Auditors of the Company for FY’23. Necessary cost audit report shall be prepared by the said auditors and filed with the Central Government as per requirements under the Companies Act, 2013.

57.    Secretarial Audit

Your Company had engaged M/s JMC & Associates, Practicing Company Secretaries as Secretarial Auditors for FY’23. Secretarial Audit Report is annexed as Annexure - G.

Reply of management to the qualifications made in the Secretarial Audit Report are as under:

Board Composition:

The Company, being a CPSE, composition of its Board of Directors is the prerogative of the President of India as provided under the Articles of Association of the Company. There was shortage of one Independent Director during intermittent period, i.e. 13 July to 31 August 2022 and 7 December 2022 to 28 February 2023, due to completion of tenure of one Independent Director in the first instance and appointment of one whole-time director in other case. The Company was fully compliant as on 31 March 2023.

Availing working capital loans for short periods on a rolling basis against lien on Term deposits from nationalized banks:

The Company did not register charges for loan against Term Deposit Receipts from Banks. The Banks stated that no charge was required to be registered for the loans against Term deposits as the original of Term Deposit receipts were kept with banks under lien. The Company accords priority to compliance requirements and matter is under examination in consultation with legal practitioner.

58.    Changes in Board of Directors and Key Managerial Personnel

Being a Government Company, policy on directors’ appointment and remuneration is not applicable and also evaluation of their performance is exempted under the Companies Act, 2013.

Details of Appointments/ Cessation of Directors and KMPs:

Changes in the Board/ Key Managerial Personnel of the Company during the year and up-to date of the Report are as under:

•    Shri Arun Kumar Singh has been appointed as the Chairman w.e.f. 07.12.2022 and Chief Executive Officer (CEO) of the Company w.e.f. 24 January 2023. He also holds the additional charge of post of Director (Strategy & Corporate Affairs) w.e.f. 1 August 2023.

•    Dr. Alka Mittal, ceased to be Chairman & Managing Director (Addl. Charge) and Director (HR) of the Company w.e.f. 01.09.2022.

•    Smt. Sushma Rawat has been appointed as Director (Exploration) of the Company w.e.f. 1 January 2023.

•    Shri Rajesh Kumar Srivastava ceased to be Director (Exploration) on the Board w.e.f. 1 January 2023.

• Shri Anurag Sharma ceased to be Director (Onshore) on the Board w.e.f. 1 March 2023.

•    Shri Manish Patil has been appointed as Director (HR) of the Company w.e.f. 5 May 2023.

• Shri Parveen Mal Khanooja, IAS, Additional Secretary in the Ministry of Petroleum & Natural Gas has been appointed w.e.f. 23 September 2022 as the Government Nominee Director vice Shri Srinivas Gudey, the then Additional Secretary & Financial Advisor.

The Board places on record its appreciation for

commendable contribution made by Dr. Alka Mittal,

Shri Rajesh Kumar Srivastava, Shri Anurag Sharma

and Shri Srinivas Gudey during their tenure on the

Board of your Company.

59.    Declaration by Independent Directors:

The Company has received declaration from Independent Directors confirming that they met the criteria prescribed under the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

60.    Acknowledgement

Your Directors are highly grateful for all the help, guidance and support received from the Ministry of Petroleum and Natural Gas, Ministry of Finance, DPE, MCA, MEA, and other agencies in Central and State Governments. Your Directors acknowledge the constructive suggestions received from Auditors and Comptroller and Auditor General of India and are grateful for their continued support and cooperation.

Your Directors thank all share-owners, business partners and all members of the ONGC Family for their faith, trust and confidence reposed in the Board. Your Directors wish to place on record their sincere appreciation for the unstinting efforts and dedicated contributions put in by the ONGCians at all levels to ensure that the Company continues to sustain, grow and excel.

On behalf of the Board of Directors

Sd/-

Place: New Delhi    Arun Kumar Singh

Date: 4 August 2023    Chairman & CEO

1

   Till FY’23 Eastern offshore Asset (EOA) successfully completed (11) Eleven sub-sea wells [Oil Wells (9) and

Water injection wells (2)] of KG-DWN-98/2 Field.

2

Twenty seven (27) drilling rigs are being replaced by new generation hi-tech rigs in phased manner.

3

Your Company reviewed the entire issue of disputed Service tax and GST on royalty and decided to make a provision towards these disputed taxes as a prudent and conservative practice in respect of the nominated fields and in JV blocks where there are no disputes amongst the JV partners. Accordingly, during the quarter and year ended 31 March 2023, the Company has provided '92,351 Million towards disputed taxes