One has to realise that ONGC’s profits actually registered a 3% yoy decline. One top expert in the industry tells us that ONGC’s small, yet visible decline could primarily be attributed to “the subsidy burden and higher DD&A [depreciation, depletion and amortization] expenditure during the quarter and 8.1% decline in crude oil sales volumes.” And oil price volatility has been killing in the past few quarters. But if the government taketh, the government giveth too – for the subsidies that the government provides ONGC hover at the top of critics’ radars. CMD R.S.Sharma accepts, “The volatility in the crude oil prices has definitely affected ONGC, but its impact for us is not as severe, as the company is hedged against it, given the current subsidy practices of the government which neutralises the major chunk of the price volatility.”
Mere government support and the titular Navratna status can only get one so far. Ergo, one has to accept that ONGC must have done some great things to become Asia’s largest oil and gas explorer, a continent which has intense competition from countries like China and Australia, which have companies like China National Petroleum and BHP Billiton that are placed four hundred odd ranks above ONGC on the Fortune 500 list globally. But the future is where Sharma is playing the roulette game. One has to realise that for decades, ONGC has basically been an upstream oil and gas company, that is, it has focused more on oil and gas drilling; while Indian Oil Corporation has been the traditional downstream firm marketing the oil and gas products. Sharma wants to change that now, using a wholly owned subsidiary – Mangalore Refinery & Petrochemical Limited (MRPL).
Mere government support and the titular Navratna status can only get one so far. Ergo, one has to accept that ONGC must have done some great things to become Asia’s largest oil and gas explorer, a continent which has intense competition from countries like China and Australia, which have companies like China National Petroleum and BHP Billiton that are placed four hundred odd ranks above ONGC on the Fortune 500 list globally. But the future is where Sharma is playing the roulette game. One has to realise that for decades, ONGC has basically been an upstream oil and gas company, that is, it has focused more on oil and gas drilling; while Indian Oil Corporation has been the traditional downstream firm marketing the oil and gas products. Sharma wants to change that now, using a wholly owned subsidiary – Mangalore Refinery & Petrochemical Limited (MRPL).
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human FaceProf. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
