Intermingled with ONGC’s corporate structure was India’s strategic goal of energy security, the route to which was through global acquisitions.
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From “division” to “directorate” to “commission” and finally to a “company,” the evolution of Oil and Natural Gas Corporation (ONGC) has moved with the times. Following the planning process, which brought oil and gas under the commanding heights and thus under government control, an Oil and Natural Gas Division was set up in October 1955 under the Geological Survey of India <1> to explore and develop hydrocarbon resources of India. The same year, the division was converted into an Oil and Natural Gas Directorate under the Ministry of Natural Resources and Scientific Research. On 14 August 1956, the directorate became a commission, <2> with enhanced powers but under the government. <3> Three years later, on 18 September 1959, the commission was converted into a statutory body under the Oil and Natural Gas Commission Act <4> of 1959, with the mandate to plan, promote, organise and implement programmes for the development of petroleum resources. <5> After a series of small discoveries, some of which turned out dry, in 1974, the organisation made a major discovery at the Bombay Offshore Basin and began commercial production two years later. The other big discoveries were at the Heera, Panna and Mukta oilfields. <6> In 1982, it made its biggest onshore gas discovery in Gujarat’s Gandhar field. In tune with liberalisation, a structural change was underway. On 4 September 1993, the Act was repealed <7> and the commission converted into a company following which the government disinvested two percent of its shares through competitive bidding. Intermingled with ONGC’s corporate structure, however, was India’s strategic goal of energy security, the route to which was through global acquisitions. A 2011 agreement to explore oil blocks in Vietnam’s waters, for instance, created tensions with China, <8> which claims the region as its own. In 1989, it created a subsidiary company, ONGC Videsh, with a mandate to prospect for oil and gas acreages abroad, including the acquisition, exploration, development and production of oil and gas fields. ONGC Videsh has stakes in 39 oil and gas projects in 18 countries. <9> The company, therefore, needs to be seen not simply as a body corporate but equally as an instrument of strategic importance in which the government’s stake has reduced to 68.9 percent.
<1> Oil and Natural Gas Corporation Limited, Department of Investment and Public Asset Management, Ministry of Finance, Government of India, 7 July 2017, accessed 3 January 2018.
<2> Through Resolution No. 22/29/55-ONG, Ministry of Natural Resources and Scientific Research, Government of India, 14 August 1956, Final Sale Document, Offer for Sale by the President of India, Securities and Exchange Board of India, 19 March 2004, 124, accessed 3 January 2018.
<3> History of ONGC, Oil and Natural Gas Corporation, accessed 3 January 2018.
<4> The Oil and Natural Gas Commission Act, 1959, Indian Kanoon, 18 September 1959, accessed 3 January 2018.
<5> Ibid., Section 14 (1).
<6> Ibid., SEBI, 97–98.
<7> The Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993, Legislative Department, Ministry of Law and Justice, Government of India, 4 December 1993.
<8> Nandini Jawli, “South China Sea and India’s Geopolitical Interests,” Indian Journal of Asian Affairs 29, no. Ω (June-December 2016): 85–100.
<9> ONGC Videsh Limited – Working globally for the Energy Security of India, ONGC Videsh Limited, accessed 3 January 2018.
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Gautam Chikermane is a Vice President at ORF. His areas of research are economics, politics and foreign policy. A Jefferson Fellow (Fall 2001) at the East-West ...
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