ONGC's growth strategy case analysis Essay Example | Topics and Well Written Essays - 750 words

ONGC's growth strategy case analysis - Essay Example OVL on its part, made offshore investments in Russia, Vietnam and Sudan, apart from acquiring project contracts in other countries. During the years 2002 and 2003, ONGC went in for major financial restructuring, pre-paying all the expensive foreign loans, investing in latest technology and acquiring foreign assets. Corporate plans project a production increase of 16% and a net profit margin of 27% by 2003-04. Plans are afoot to enter into insurance, shipping and power production, but the government does not support these ideas. Thus, ONGC’s key concerns for 2003-‘04 are heavy capital investments, regaining growth in production volumes and discovering new reserves. Its top management, headed by Mr. Subir Raha, CMD, is well recognized for strong and proactive management style. Its management structure is organized region-wise in line with its exploration and production operations, and each regional headquarters has freedom of action and accountability – a trait of the management style of its CMD. Oil and gas exploration was a government monopoly till the sector was opened up for private investment in 1998 by a policy called the New Exploration Licensing Policy (NELP). International companies are now allowed to bid for exploration either alone or in association with local industrial houses, on production sharing basis (with the government). Cairn Energy, Reliance, Gujarat State Petroleum Corporation and Videocon are some of the new players in the market, with the first three named having already succeeded in major gas finds and associated oil reserves. Plans are under implementation for nation-wide gas pipeline grids and they pose a direct challenge to ONGC’s gas business, in times to come. Till 1st April 2002, government controlled the prices of petroleum & product after which the administered price mechanism (APM) was dismantled. ONGC with its strong investment