ONGC's Growth Strategy

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Case Details:

Case Code : BSTR130
Case Length : 12 Pages
Period : 1999 - 2004
Organization : Oil and Natural Gas Corporation, ONGC
Pub Date : 2004
Teaching Note :Not Available
Countries : India
Industry : Oil and Energy

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Prior to independence, there were two companies in India involved in the exploration of oil - the Assam Oil Company in the North-Eastern region and the Attock Oil Company in the North-Western region.

Both companies had meagre oil exploration outputs as major parts of India were deemed unfit for exploration of oil and gas resources.

After independence, the GoI realized the importance of developing the oil and gas sector to achieve rapid industrialization. In the 1950s, private oil companies carried out exploration of hydrocarbon resources in the country.

However, a large portion of offshore regions remained largely unexplored. In the mid 1950s, the GoI decided to explore oil and natural gas resources in various regions of the country. This resulted in the formation of the Oil and Natural Gas Directorate at the end of 1955, as a subordinate office under the then Ministry of Natural Resources and Scientific Research.

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The department was constituted with a team of geoscientists from the Geological Survey of India.

However, soon after the Directorate's formation, it became evident that it would not be possible for the new body to function efficiently due to limited financial and administrative powers.

In August 1956, the Directorate was raised to the status of a Commission with enhanced powers; but it continued to be under GoI control.

In October 1959, the body received further elevation, both in status and powers, with the Commission being converted into a statutory body by an act of Parliament. This act came to be known as the ONGC Act in 1959.

According to the act, Oil and Natural Gas Commission's main functions were, "to plan, promote, organize and implement programmes for the development of Petroleum Resources and the production and sale of petroleum and petroleum products produced by it, and to perform such other functions as the Central Government may, from time to time, assign to it..."

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