COMPANY HISTORY 

Oil and Natural gas Corporation (ONGC), one of the leading Public sector Oil Companies was incorporated in the year 1993. Till 1955, only two oil companies namely Assam Oil Company and Attock Oil Company dominated the India’s oil and gas market. Then in 1956, Indian government formed Oil and natural gas commission to promote, organize and implement programmes for the production, sales and marketing of petroleum products in India. The commission initiated many measures and discovered new oil fields in the northeastern India. The company in 1970’s explored offshore and discovered many gas and oil fields including Mumbai High in the western part of the country. In 1991 as the Indian government liberalized economic policies and it disinvested its investments partially in all Public sector undertakings. Then the commission initiated in 1956 was incorporated as Oil and Natural Gas Corporation in 1993. In 1999 as the result of a policy agreed between three major oil companies ONGC, IOC and GAIL Indian government sold 10% of its stake to IOC and 2.5% of to GAIL. The company does a wide range of activities including exploration of oil & gas fields in India and offshore, and production of miscellaneous petrochemical products including Hydrocarbons. The company accounts for 77% of India’s total oil production and 81% of India’s Natural gas production. The company owns and operates more than 11,000 kms of pipelines in India which includes 3,200 kms of Sub sea pipelines. The company has two subsidiaries namely, ONGC Videsh limited and Mangalore Refinery and Petrochemical Limited (MRPL). ONGC is a fortune 500 company and is ranked 335 in the list.  

RECENT DEVELOPMENTS 

• ONGC recently opened India’s first helium extraction plant in a joint venture with Saha institute of nuclear physics (SINP). The unit is located at Kuthalam, a small town located in the Cauvery river bed of Nagapattinam District, Tamil Nadu.
• The company recently entered in to a pact with Calcutta Compressor and Liquefaction Ltd (CC&L) for the supply of gas from Coal-bed Methane (CBM) in Jharkhand.
• ONGC bagged 20 Oil and gas blocks, offered by the Government in the NELP-VII auction held in first week of this month. ONGC remains top in grabbing the oil fields.
• In the last quarter the company discovered 11 Oil and gas discoveries. Four on the KG basin and Western off shore basin and one in the Cauvery basin and remaining one at A&AA basin.
• The Board recently gave assent for entering in to pact with uranium Corporation of India Ltd for exploration and utilization of Uranium.
• The company recently entered in to agreement with Torrent power Ltd for the supply of power.

STOCK OUTLOOK

The stock is now trading in the level of RS.970-1020. The decline in the crude oil prices made a short bullish movement in the stock. The stock is having a short term support level at Rs.800 and a key long term support level at Rs.1300. Short term investors may accumulate this stock with target price at Rs. 1150. Crude  oil price decline may also lead to improvement in profitability as the subsidy leelment may come down. Long Term investors may well take position in this stock especiallly if the crude prices decline and reach a level below $ 100.