At Independence, India's domestic oil production was just 250,000 tones per annum. The entire p r o d u c t i o n w a s f r o m o n e s t a t e - A s s a m .

M o s t f o r e i g n e x p e r t s h a d w r i t t e n o f f In d i a a s f a r asdiscovery of new petroleum reserves was concerned. The Government ann o u n c e d , u n d e r Industrial Policy Resolution, 1954, that petroleum would be the core sector industry. Preamble Petroleum exploration & production was controlled by the Government -owned National OilCompanies (NOCs), ONGC and OIL, in pursuance of the Industrial Policy Resolution, 1954. Inthe early 70s, they supplied nearly 70% of the domestic requirement. However, by the end of the80s, they had reached the stage of diminishing returns. Oil production had begun to declinewhereas there was a steady increase in consumption and today the two NOCs are able to meetonly about 35% of the domestic requirement. This was further compounded by the resource crunch in the beginning of the 90s. The Government had no money (FE) to give to the NOCs for the development of some of the then newly discovered fields. While some of these fields could b e d e v e l o p e d b y O N G C ( G a n d h a r , N e e l a m , B o m b a y H i gh , La k w a , H e e r a , G e l e k i e t c . ) , f o r others there was no money available for indigenously developing the fields. The problem hadelements such as the administered oil price, non-availability of appropriate technology, logisticsetc. Petroleum Sector Reforms, 1990 The Government launched the Petroleum Sector Reforms (PSR) in 1990. Till then, three roundsof exploration bidding had been gone through with no success in finding new oil/gas deposits bythe foreign companies who only were allowed to bid. Under the PSR, the Fourth, Fifth, Sixth, comparative lack of business risk but is a cost intensive venture. Only those companies who have previous experience of field development can undertake such ventures. Unlike the Exploration blocks, field development contracts have upfront payments to be made to the NOCs for pastcosts as well as in the form of signature bonus. At the stage of oil/gas production, companies arealso required to make production bonus payments. Lack of previous experience forces the Indiancompanies to seek foreign partners not only to work as Operator but also to share costs. It wouldhelp Indian cause if the government were to introduce the practice of Pure Service Contract likein some of the other producing countries.Today 74 Exploration Contracts and 28 Development Contracts are in operation. There are atotal of 103 PSCs in operation. This is a sizable number but unfortunately this is not made knownto a large number of people/enterprises. The Development Contracts are likely to add about150,000 barrels of oil per day (or about 7.5 MMT per year) and about 7 million cubic meters per day of gas production. In terms of money about 4 billion dollars are expected to be pumped intothese ventures over the next 10 to 15 years. 1.2 MAJOR PLAYERS:-ONGC It is a public sector petroleum company in India, contributing 77% o f I n d i a s c r u d e o i l production.Revenue (2008-09): 161263 millionEmployees: 41000Recent news: ONGC achieve highest Reserve accretion in last two decades.

 ONGC conferred with two SCOPE meritorious awards on the PSU day.

 India's ONGC lags in global oil race. ONGC's setbacks in acquiring major oil resources aremade worse by the Indian government's order to help shoulder the burden of subsidisedfuels earlier this year, which pushed the country's biggest refiners into the red. ONGC has gained junior shares in a host of projects, from Russia's Sakhalin-1, Iran'sYadavaran Field and Sudanese properties abandoned by Western investors. But it has yet to take a lead role that would give it more say and a bigger share of future production. The race is gaining urgency both for India and ONGC as Chinese and other Asian competitors snap up plum properties in the face of stagnating domestic production. Government officials say ONGC must boost its reserve-to-production ratio - the number of years its reserves will last with the current level of output - by improving its drillingtechnology and management practices . ONGC's ratio is 22 years . In some onland areasthe ratio is 57 years . ONGC lost a major offshore platform at Bombay High , India's largest oilfield, reducingthe company's output by 123,000 barrels per day (bpd) after an errant rig crashed into thefacility during the monsoon, setting it on fire. It has since restored half that production . O i l M i n i s t e r M r A i ya r h a s pushed for Indian and Chinese firms to cooperate notc o m p e t e , f o r o v e r s e a s a s s e t s , b u t h i s e f f o r t s a p p e a r t o h a v e m e t w i t h little interest inBeijing , where the oil majors are gaining ground abroad, despite some hiccups. IOCL It is India's largest commercial enterprise, with a sales turnover of US $36.537 billion. A wholly owned subsidiary company,

IndianOil Technologies Ltd. is the 19 th largestpetroleum company in the world IndianOil's world-class R&D Centre has developed over 2,100 formulations of SERVObrand lubricants and greases for virtually all conceivable applications meeting stringentinternational standards and bearing the stamp of approval of all major original equipmentmanufacturers. IndianOil is also strengthening its existing overseas marketing ventures and simultaneouslyscouting new opportunities for marketing and export of petroleum products to new energymarkets in Asia and Africa.

BPCL It is the 3rd largest oil company in India owned by the Government of India.Revenue (2005): $17.613 billionEmployees: 12400 In 1976, the Burmah Shell Group of Companies was taken over by the Government of India to form Bharat Refineries Limited . In 1977, it was renamed Bharat Petroleum Corporation Limited . It was the first refinery to process newly found indigenous crude ( Bombay High ), in thecountry. 1.3 P.E.S.T AnalysisPolitical Environment The political environment in India is one of a federal re public. ONGC is stateowned but this does not mean that the GoI is good for ONGC o r doing things in the best int e r est of O NGC r i ght n ow . T h e proposed mergers of HPCL, BPCL withONGC, and Oil In dia with IOC were the GoIs ideas. This produced uproar and the mergers we set aside, but not without the GoI stating t hat the government willhave t o r est ri ct t h e r e spe ct i ve c om panies to their core businesses. ONGC is also being made by the GoI to focus on exploration and production (E&P ) of oil andgas. ONGC had been starting to move downstr eam and diversify its business bygoing into the refining and retailing business but the GoI put a halt to this. The positi ve si de o f havi ng the polit i cal backbone o f ONGC i s that i t gi ves thecompany stability and s ome security. When ONGC started they had multiply protection policies in place that kept them safe from glo b a l c o m p e t i t i o n . A s t h e years went by, the GoI deregulated t he industry and took away the state protection pol i c y t h at k e pt ONGC safe. This has lead to new opportunities but it h a s a l s o opened the door to a lot more threats.