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The 27th Annual General Meeting (AGM) of ONGC was conducted through video conferencing on 9 October 2020. Around a thousand shareholders from diverse geographies participated in the AGM. Many of the shareholders outside Delhi NCR could connect with the ONGC Board and wanted this virtual mode to continue even post pandemic. The shareholders showed keen interest in the operations and strategies of the energy major, and reposed their faith in the strong fundamentals of the energy major, notwithstanding their subtle concern on the current low share prices.

The 27th AGM commenced with an elaborative speech from CMD Mr Shashi Shanker, which summed up the Mahratna’s operational and financial performance during the last fiscal year 2019-20. The CMD’s speech was followed by an interactive session; the shareholders voiced their suggestions and issues – varying from the ONGC’s crisis management during the pandemic to its strategic roadmap towards a renewed future, touching upon issues like dividend payment and bonus shares. CMD Mr Shashi Shanker, along with Directors from the Board, responded and suggestions in a calm and composed manner. Mr Shanker even responded to each individual shareholder and their concerns in detail.

Shareholders participated in 27th ONGC AGM through video-conferencing powered by Cisco Webex
Shareholders participated in 27th ONGC AGM through video-conferencing powered by Cisco Webex

Over the concerns on the adverse impact of the dipping global crude oil prices, CMD Mr Sanker said that the geo-political conflict between Russia and Saudi Arabia and the pandemic scenario worldwide has affected the energy sector too. “Cost of oil-field services like rig-hiring charges is volatile depending on the oil prices which makes production costs dynamic.”

However, CMD flagged his optimism about the recovery in oil prices and ONGC expects to make decent earnings in the near future. Mr Shanker stated that while the Capex programs are on track, cost cutting during the crisis period is prioritized on the basis of ‘vital’, ‘essential’ and ‘desirable’ basis. He assured that no major projects is being held up, since E&P operations remain in the top priority for the company.

On this line, shareholders lauded ONGC Energy Soldiers for walking the extra mile by voluntarily working on extended shifts at remote offshore and onshore locations to ensure steady supply of oil and gas while the entire nation was under the much-essential lockdown to contain the spread of the novel COVID-19 virus.

CMD further noted that ONGCians on field work through much severe challenges; “the Maharatna’s ‘oil sevaks’ performed relentlessly to keep the nation fuelled, maintaining all SOPs and guidelines provided to contain the spread of the virus – which included physical distancing, constant sanitizing, protection through masks.”

Shareholders also appreciated the energy major paying 100% dividend [Rs 5 per share] even during this time of acute crisis. CMD Mr Shanker noted that the ONGC management’s earlier decisions were effective towards ensuring the complete payback for the shareholders. CMD and Director (Finance) appreciated the understanding expressed by some shareholders that share price is not totally under the control of ONGC management. “In any case, we are hopeful of a recovery soon.”

Over queries on whether ONGC is focusing on reducing overseas subsidiaries or trying to merge them, Director (Finance) Mr Subhash Kumar said that for overseas operations, a number of entities are needed to be acquired to acquire a company. Responding to queries on performance of subsidiaries, Mr. Kumar said, “Our subsidiaries had been performing very well. Though the margins have been hit due to the pandemic, it is about to improve shortly. Our first quarter’s performance has been almost same as the last year, despite disruptions in the past few months.”  

Director (Finance) Subhash Kumar interacting with shareholders during 27th AGM
Director (Finance) Subhash Kumar interacting with shareholders during 27th AGM

On a query relating to HPCL MRPL merger, CMD elaborated, “This merger will be achieved in a step by step approach. First, sometime next year middle, a merger between MRPL and OMPL, will be done. Following this, our focus will be on the merger of MRPL and HPCL,” Mr Shanker affirmed. “The synergies available in the ONGC Group will enable unlocking of value.”

Shareholders also raised concerns over the recent fire incident at ONGC’s Hazira Plant in Surat. To this Mr Shashi Shanker elaborately explained that, contrary to how the incident has been reported in the media, no safety breach had occurred due to leakage through the pipelines. “Pipelines in ONGC are pre-certified and well maintained. The rich gas from the offshore Bassein field of ONGC comes to the Plant with liquid condensate which leaked through a gasket. The well-developed alarm system of the ONGC Plant detected this and as per standard operating procedure, the pipelines are depressurized from the high 65 kg pressure, by flaring through the stack. This caused blast-like noise which the surrounding people interpreted to be an explosion. There was a localised small-scale fire which was put off within 4 hours; through impressive disaster management, the operations resumed within a day with supplies restored to the prime vendor GAIL”

On concerns over the dipping manpower on ONGC rolls, Director (HR) Dr Alka Mittal shared that in the last three years, around two thousand employees are superannuating each year. She mentioned that ONGC has rolled out a new induction plan in the last two years and around thousand recruitments are made every year. Dr Mittal further stated that the recruitment is getting rationalized as induction of new and advanced technologies has relaxed the requirement of huge manpower.

On a query on women employees, Director (HR) said that ONGC is also focused on building a diverse and inclusive workplace, by recruiting more women employees, which is going up and currently at 7.4 per cent.  She mentioned that in the last four years around 600 women employees have joined the energy major. “What is more encouraging is many of the women officers are now joining oil-field services.”

CMD Mr Shanker also addressed concerns over the control over the CO2 emission. He said that ONGC is one of the first PSUs to undertake several projects in this direction. He noted that ONGC has a separate Sustainability department to focus on the issue. “Each year, our sustainability reports gets updated in our public portal, which can be accessed by all.”

Mr Shanker said that the company’s Energy Strategy 2040 includes details on the focus of ONGC on renewable energy. “We are an integrated energy company. Going forward our renewable portfolio will reach greater heights.”

Responding to a reference from a shareholder relating to ONGC’s procurement of pipes from domestic surces, CMD said that ONGC has always been working towards indigenization. “ONGC has pioneered indigenization in E&P industry with an expert department focusing on developing domestic sources for oil-field equipment for national self-reliance. ONGC is committed to the government’s recent initiative of Atmanirbhar Bharat. We recently came up with several policies to boost local vendors. All projects under Rs 200 crore has been decided to be assigned to domestic vendors, if the supply is available.”

The 27th AGM concluded with Vote of Thanks by Independent Director Mr Amitava Bhattacharya.  The uniquely-delivered Annual General Meeting was planned and executed by teams of Corporate Communications and Company Secretary.   

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