ONGC Business Model Canvas

Upstream exploration and drilling focus on seismic surveys and exploratory wells to find hydrocarbons in India and offshore blocks; ONGC spent Rs 9,200 crore on exploration in FY2024 and drilled 72 exploration/appraisal wells that year. The company uses advanced geoscientific modelling to evaluate traps and commerciality, and sustained capex-about Rs 25,000 crore planned for 2025-aims to replace reserves and sustain long – term production.

Once a discovery is commercial, ONGC builds offshore platforms, pipelines and processing hubs-deploying secondary and tertiary methods like Enhanced Oil Recovery (EOR) to boost yields from mature fields such as Mumbai High, which produced ~0.16 million barrels per day in FY2024. Daily production management targets ~0.6 million boe/d company-wide (2024) to meet India's energy needs and revenue goals, with capital spend ~₹120 billion in FY2024 on development and EOR projects.

ONGC's core asset is its proven and probable hydrocarbon reserves-about 776 million tonnes of oil equivalent (Mtoe) as of FY2024-across onshore and offshore basins, which underpin company valuation and fuel all downstream revenue. The firm targets a reserve replacement ratio above 100% via exploration success (2024 exploratory success rate ~28%) and strategic acquisitions to sustain production and cash flow.

ONGC owns extensive physical assets-over 70 offshore platforms, 25 drilling rigs, multiple subsea pipelines and large onshore processing plants-plus seismic vessels and geoscience labs; asset book value was about INR 1.2 trillion (2024 annual report). Maintaining and modernizing this multi-billion dollar infrastructure, with planned capital expenditure ~INR 28,000 crore in FY2025, is critical for efficiency and safety.

ONGC supplies about 62% of India's domestic crude oil and 27% of natural gas (FY2024), cutting import bills-India spent $146 billion on oil imports in 2023-while its 2024 revenue of ₹1.1 trillion supports steady hydrocarbon availability, backing industrial output and fiscal stability. This dominant supply position makes ONGC a key strategic partner for the Government of India in energy security and economic resilience.

ONGC offers crude oil, natural gas, LPG and refined products, with 2024 consolidated revenue of INR 1.18 trillion supporting cash flows across commodities; this mix helps offset price swings-e.g., a 20% crude drop in 2023 had limited EBITDA impact due to gas/LPG stability. ONGC is scaling renewables and green hydrogen with a 15 GW target pipeline by 2030 and INR 10,000 crore planned capex to 2026, positioning it as a future-ready energy conglomerate.

The majority of ONGC's crude and gas are sold via multi-year contracts to state-owned and private refineries, with over 70% of 2024 domestic volumes tied to long-term agreements, giving ONGC a guaranteed buyer and refineries stable feedstock. Pricing follows government formulas or benchmarks (price-linked to Brent or administered rates), which in 2024 reduced spot exposure and revenue volatility for ONGC by roughly 15% year-on-year.

As a state-controlled entity, ONGC reports regularly to the Government of India (its majority shareholder) and holds quarterly strategic planning sessions to align operations with national targets; in FY2024 ONGC contributed ~16% of India's crude output and paid ₹67,000 crore in dividend and taxes, reflecting policy-aligned cash flows. The company functions as the execution arm for energy self-reliance, steering projects that match India's target to cut oil import dependence and boost domestic production by 10-12% by 2026.

ONGC's extensive onshore and offshore pipeline network, often operated with GAIL (India) Limited, moves the bulk of crude and gas-handling roughly 70% of ONGC's transported volumes in FY2024-25 (about 18 million tonnes oil-equivalent)-and remains the lowest-cost, safest channel versus road/rail, crucial for linking remote fields like KG-DWN-98/2 to mainland processing hubs.

ONGC delivers crude directly to major refineries-HPCL, MRPL, and IOCL-via dedicated terminals and port facilities, supplying roughly 45% of its 24.7 million tonnes 2024 crude output and cutting out intermediaries to retain higher margins. Delivery hubs at Mumbai, Vadinar, and Paradip reduce transit losses and cut average logistics time to under 3 days, improving realized oil sales revenue by an estimated 4-6% in 2024.

Public sector refineries-Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL)-are ONGC's primary domestic buyers, taking ~60-70% of its 2024-25 crude output; IOC alone processed ~68 million tonnes of crude in FY2024, driving the bulk of ONGC's revenue (ONGC reported consolidated revenue ₹1.05 trillion in FY2024). Their steady, large-volume offtake underpins ONGC's cash flow and pricing leverage.

Private refineries like Reliance Industries and Nayara Energy buy ONGC crude when domestic supply exists; Reliance processed ~22.5 million tonnes of crude in FY2024 while Nayara handled ~21.7 million tonnes, so they demand specific grades to optimize diesel-petrol yields and petrochemical feedstocks. Selling to these private giants lets ONGC diversify beyond public-sector buyers and captured ~18% of its FY2024 domestic crude realizations from private sales.

A massive share of ONGC's capex goes to high-risk exploration-deepwater rigs and seismic surveys-representing about 30-40% of the 2024-25 capex plan (₹20,000-₹25,000 crore of a ₹60,000-₹70,000 crore program), with individual ultra-deep rigs costing $200k-$600k/day and advanced seismic licenses plus software adding tens to hundreds of crores, often years before any revenue.

Ongoing operating and maintenance costs cover daily offshore platform ops, aging-well workovers, and energy for processing; ONGC reported operating expenses of about INR 88,000 crore in FY2024, with O&M and energy a substantial share. As fields mature, extraction costs rise-incremental EOR (water injection/chemicals) can double lifting costs to $15-25/barrel-while regular maintenance remains non-negotiable to prevent spills and meet regulatory standards.

Sales of crude oil generate ONGC's largest revenue share-about 61% of consolidated FY2024 revenue, with production from India and overseas sold mainly to refiners; volumes were ~28.6 million tonnes in FY2024. Prices track Brent, so revenue swings with global oil moves (Brent averaged ~US$96/bbl in 2024), making this stream the main driver of cash flow and net income.

ONGC earns gas revenue by selling to power, fertilizer and city gas distributors; FY2024 gas sales were ~16 bcm contributing roughly 15% of upstream revenue and ~Rs 28,000 crore (~$3.4B) in 2023-24. Government-regulated tariffs persist, but 2023-25 policy allowed higher prices for deep-water and difficult fields, and India aims to raise gas share to 15% of primary energy by 2030, supporting volume and price growth.