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About ONGC:
Oil and Natural Gas Corporation Limited (ONGC)
(incorporated on June 23, 1993) is an Indian public sector
petroleum company. It is a Fortune Global 500 company ranked
335th, and contributes 77% of India's crude oil production and
81% of India's natural gas production. It is the highest profit
making corporation in India. It was set up as a commission on
August 14, 1956. Indian government holds 74.14% equity stake in
this company.
ONGC is the flagship company of India; and making this possible
is a dedicated team of nearly 40,000 professionals who toil
round the clock. It is this toil which amply reflects in the
performance figures and aspirations of ONGC. The company has
adapted progressive policies in scientific planning, acquisition,
utilization, training and motivation of the team. At ONGC
everybody matters, every soul counts. Over 18,000 experienced
and technically competent executives mostly scientists and
engineers from distinguished Universities / Institutions of India
and abroad form the core of our manpower. They include
geologists, geophysicists, geochemists, drilling engineers,
reservoir engineers, petroleum engineers, production engineers,
engineering & technical service providers, financial and human
resource experts, IT professionals and so on.
Due mostly to the industry that ONGC is in, it’s hard for there to
be many new entrants. The only real threat that might arise
would be another government funded Oil and Gas company. The
reason for this is that a government would not have as hard a
time raising funds and gaining access to resources. This is
assuming that the company would be researching and developing
on domestic soil. The only other threat may not be from new
entrants but from smaller competitors who already have access
to resources and distribution channels. There is really not much
of a threat because there are two main barriers to entry that
would be stopping potential threats. These would be very high
capital requirements as well as access to Cost
disadvantages independent of scale.
Even though this industry if very attractive because of the high
profits it would be very hard for a company to have enough
capital to get in the market. Every part of Oil and Gas Exploration
and Development is costly and not something that would be
worth the costs as a new entrant into the industry. Going along
with the high cost of capital are the cost disadvantages. The
companies already in the industry already have the access to raw
materials as well as desirable locations. This is something that
would be very difficult for a new entrant to try and gain.
The rivalry in the industry was low till as the industry was tighlty
regulated by the government. However, the level competition has
increased with Reliance and other MNC becoming more
aggressive.