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ONGC Videsh Ltd (OVL)

IntroductionONGC Videsh Limited, a Miniratna Schedule “A” Central Public Sector Enterprise (CPSE) of the Government of India under the administrative control of the Ministry of Petroleum & Natural Gas, is the wholly owned subsidiary and overseas arm of Oil and Natural Gas Corporation Limited (ONGC), the flagship national oil company (NOC) of India.

The primary business of ONGC Videsh is to prospect for oil and gas acreages outside India, including exploration, development and production of oil and gas. ONGC Videsh owns Participating Interests in 41 oil and gas assets in 20 countries and produced about 26.2% of oil and 20.7% of oil and natural gas of India’s domestic production in FY’18.

In terms of reserves and production, ONGC Videsh is the second largest petroleum company of India, next only to its parent ONGC.

Vision

To be a world-class exploration and production company providing energy security to the country.

Objectives

  • To support India’s energy security
  • To build balanced portfolio of exploration, discovered and producing assets in focus countries
  • To build a team that excels in performance through assimilation of best practices and technologies
  • To be at par with the best international oil and gas companies
  • Be the strongest Indian Player in the international E&P
  • Build collaborative relations with partners

Current Assets Portfolio

ONGC Videsh has stake in 41 oil and gas projects in 20 Countries, viz. Azerbaijan (2 projects), Bangladesh (2 Projects), Brazil (2 projects), Colombia (7 projects), Iran (1 project), Iraq (1 project), Israel (1 project), Kazakhstan (1 project), Libya (1 project), Mozambique (1 Project), Myanmar (6 projects), Namibia (1 project), New Zealand (1 Project), Russia (3 projects), South Sudan (2 projects), Sudan (2 projects), Syria (2 projects), UAE (1 project), Venezuela (2 projects), and Vietnam (2 projects).

ONGC Videsh adopts a balanced portfolio approach and maintains a combination of producing, discovered, exploration and pipeline assets. Currently, ONGC Videsh has oil and gas production from 15 Assets, 4 Assets where hydrocarbons have been discovered and are at various stages of development, 18 Assets are under various stages of Exploration and 4 projects are pipeline projects.

Competitive StrengthsImage result for OVL

ONGC Videsh operates in highly competitive international oil and gas sector by competing with the best in the industry. Over the years, ONGC Videsh has built inherent capabilities and expertise in its areas of operations. ONGC Videsh has developed strong partnership alliance with a host of IOCs and NOCs including ExxonMobil, British Petroleum, Shell, ENI, Total, Repsol, Statoil, Chevron, Petrobras, Sodeco, Socar, Rosneft, ADNOC, Daewoo, Kazmunaigaz (KMG), Petro Vietnam, CNPC, Sinopec, PDVSA, Petronas, Anadarko and Ecopetrol.

ONGC Videsh has highly skilled human resource with excellent technical and management capabilities. The company has built facilities for evaluation, interpretation, economic modeling, FEED, design and execution of oil and gas projects and enjoys the technical and human resource support from ONGC. ONGC Videsh has developed core expertise in due diligence, techno-commercial evaluations, bid negotiations and transaction documentations.

Reserves

ONGC Videsh has 2P reserves of 711.362 MMTOE as on 01.04.2018.

Production Performance

ONGC Videsh is the first Indian Company to produce equity oil and gas abroad. ONGC Videsh’s production started in 2002-03 with commencement of production of Block 06.1 in Vietnam in January 2003 and from Greater Nile Oil Project in Sudan in March 2003, aggregating a meagre 0.25 MMTOE in FY’03. With sustained growth in production from its acquired assets, ONGC Videsh’s production reached 9.448 MMTOE in 2010-11. Adverse geo-political conditions in Sudan and South Sudan and force majeure situation in Syria caused decline in oil production to a level 7.260 MMTOE in 2012-13. However, in 2013-14, 2014-15 and 2015-16, production increased to the level of 8.357 MMTOE, 8.874 MMTOE and 8.916 MMTOE, primarily due to better management and addition in the portfolio. With acquisition of 26% stake in Vankorneft, Russia in 2016 and 4% stake in Lower Zakum Concession, Abu Dhabi, UAE in 2018; production of ONGC Videsh has increased to 12.803 MMTOE for 2016-17 and 14.164 MMTOE in 2017-18.

Growth-New Horizons-recent AcquisitionsThe following acquisitions have been done by ONGC Videsh in last 5 years:

Producing Assets

(a) ONGC Videsh Limited has acquired 26% equity (15% equity on May 31, 2016 and additional 11% equity on October 28, 2016) in CSJC Vankorneft, a company organized under the law of Russian Federation which is the owner of Vankor Field and North Vankor license. Rosneft Oil Company, NOC of Russia holds 50.1% shares in Vankorneft. Indian consortium of Indian oil PSUs comprising Oil India Limited, Indian Oil Corporation Limited and Bharat Petro Resources Limited holds the remaining 23.9% equity.

Vankor is Rosneft’s (and Russia’s) second largest field by production and accounts for approx. 4% of Russian production. The daily production from the field is around 0.4 million bpd of crude oil on an average.

(b) On February 10, 2018, ONGC Videsh led Indian Consortium signed definitive binding agreements with Supreme Petroleum Council, ADNOC and OPCO, on behalf of the Abu Dhabi Government for acquiring 10% Stake in Lower Zakum Concession, Offshore Abu Dhabi, UAE. ONGC Videsh PI in the concession is 4%. The Concession, which has a term of 40 years, came into effect from March 09, 2018. The field is currently producing about 400,000 bopd and is to set to achieve plateau target of 450,000 bopd by 2025.

Discovered Assets

(a) ONGC Videsh and Oil India Limited acquired 100% shares in Videocon Mozambique Rovuma 1 Limited, the company holding a 10% PI in the Rovuma Area 1 Offshore Block in Mozambique (Area 1) on January 07, 2014.

(b) ONGC Videsh has also acquired a direct 10% PI in the same Rovuma Area 1 Offshore Block in Mozambique from Anadarko Mozambique Area 1 Limited, an affiliate of Anadarko, on February 28, 2014.

Exploratory Assets

(a) In September 2013, an ONGC Videsh led 50-50 consortium with Oil India Limited was awarded two shallow water blocks in offshore Bengal Basin in Bangladesh namely SS-04 and SS-09. PSCs for these blocks were signed in February, 2014.

(b) In October, 2013, ONGC Videsh was awarded two onshore blocks namely B-2 and EP-3 in the Myanmar Onshore Bidding Round 2013. Block B2 is located in the Zebyutaung–Nandaw area and geologically in the Northern part of the Chindwin Basin of Myanmar and Block EP-3 is located in the Central Burma Basin (BagoYoma Sub Basin). PSCs for these blocks were signed on August 08, 2014.

(c) In December 2014, ONGC Videsh was awarded one exploratory block, PEP 57090, in the Taranaki offshore basin in New Zealand bidding round 2014. PSC for the block was signed on December 09, 2014.

(d) In October, 2017, ONGC Videsh completed the acquisition of 30% PI in Namibia Petroleum Exploration License 0037 for Blocks 2112A, 2012B and 2113B and related agreements (License), Offshore Namibia from Tullow Namibia Limited (Tullow), a wholly owned subsidiary of Tullow Oil plc.

(e) Block in Israel with License 412/“32” dated March 27, 2018 was granted by Petroleum Commissioner to Indian Consortium for first phase of exploration with a duration of 3 years. ONGC Videsh is an operator with Participating Interest (PI) of 25% from the Indian Consortium and other partners are Bharat Petro Resources Limited (BPRL), Indian Oil Corporation Limited (IOCL) and Oil India Limited (OIL) with 25% PI each.

Contract Extensions

(a) On September 28, 2017, Authorized State Body (ASB) of Russia has approved the extension of Production Sharing Agreement (PSA) for Sakhalin-1 project for 30 years from December 3, 2021 to December 3, 2051.

(b) Consortium partners of the giant ACG Fields in Azerbaijan have entered into an agreement with Azerbaijan Government and State Oil Company of the Azerbaijan Republic (SOCAR) for extension of duration of the Production Sharing Agreement (PSA) for Azeri-Chirag-Deepwater portion of Gunashli (ACG) oil fields until December 31, 2049.

HEALTH, SAFETY & ENVIRONMENT MANAGEMENT SYSTEM

ONGC Videsh attaches highest priority to occupational health, safety and protection of environment in and around its operational areas. It has implemented ‘Integrated policy on QHSE & Risk Management’, which comprehensively deals with all related domains.

ONGC Videsh is certified for Integrated QHSE  Management System is in line with revised standards ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environment Management System) & OHSAS 18001:2007 (Occupational Health & Safety Management System) with the scope ‘The Business Development activities for Acquisition of overseas oil and gas fields and management of Exploratory, Developing and Producing Assets at OVL HQ.’

ENTERPRISE RISK MANAGEMENT

In line with the requirements of Clause 49 of Equity Listing Agreement and DPE Guidelines on Corporate Governance, ONGC Videsh had rolled out Enterprise Risk Management (ERM) System in 2012, which was further aligned with ISO 31000:2009, which is globally recognized Standard on Risk Management.

Risks have been mapped along with their causes and mitigating factors, which are monitored on periodic basis. The risk reporting structure is in place.

SAFETY BELIEFS
    • All injuries, occupational illnesses and environmental damage are preventable.
    • HSE is fundamental to the conduct of our business.
    • Doing things in HSE way always enhances productivity,profitability and sustainability.
    • No work is so important that it cannot be done safely.
    • Employee involvement, feedback, and recognition are fundamental to HSE.
    • HSE behavior is doing the job right.
    • Workplace risk shall be reduced in the following priority:
      1. Elimination
      2. Substitution
      3. Engineering Controls
      4. Signage/ warning and/ or administrative controls
      5. Personal protective equipment
    • HSE is not just the job of a few specialists. It’s everyone’s responsibility and everyone can make a difference.
    • Safety off the job is an important element of our overall safety effort.
    • Management is directly responsible for preventing injuries and occupational illnesses, protecting the environment for visibly and consistently establishing HSE as a priority.
    • Employees and contractors are responsible and accountable for their actions.
    • Employees and contractors have an obligation, without fear of reprisal, to notify management of apparent and imminent hazards and environmental aspects. Everyone has an obligation not to pursue any work that is unsafe and they have the right to receive timely and adequate responses.
    • People are the most critical element in the success of a HSE programme.
COMMITMENT
    • Management is committed to clearly defining HSE policy, HSE objectives, roles and responsibilities, by providing needed resources and by measuring, reviewing and continuously improving the HSE performance.
    • Management, by personal example, both on and off the job be a model for positive HSE behavior and reinforce and reward positive behavior.
    • Management is committed to assert itself for not only to ensure adherence to the applicable statutory rules and regulations, but to go beyond such benchmarks also.
    • Management is committed to maintain a “Safety Culture” that would reflect in all the activities it perform, with the active involvement of all the employees, contractors, stakeholders and also the community.
    • Everybody who works for OVL is committed towards HSE and is responsible to ensure that all HSE rules, standards and guidelines are followed to accomplish the task.
    • Adhering to the HSE guidelines is mandatory at all levels.

New Delhi | India

Deendayal Urja Bhawan Tower B, 5, Nelson Mandela Marg, Vasant Kunj, New Delhi- 110070 Tel: +00-91-11-26129344, 26753411 Fax: +00-91-11-2612 9346

Website - www.ongcvidesh.com