Black gold

POUND WISE

Crude oil price and realisation (USD/barrel) Pre-discount-43.2459.6566.3385.54 Post-discount-37.8342.3344.2252.90 Discount-5.4117.3222.1132.64 * Provisional                                                                                 Source: Company  Notably, the company continues to invest in the exploration and production (E&P) activities. This has helped ONGC maintain production levels and has lead to a steady increase in RRR (reserve replacement ratio; at over 1) in the last four years. 
 

RESERVE ACCRETION
Year	RRR *
1998-99	0.51
1999-00	0.72
2000-01	1.36
2001-02	1.36
2002-03	0.81
2003-04	0.68
2004-05	1.00
2005-06	1.10
2006-07	1.35
2007-08	1.32
* Reserve Replacement Ratio

 This ratio indicates that the new addition to domestic oil and gas reserves as compared to the production during a given year.  ONGC's achievement is commendable given that maintaining a RRR of over one is a global challenge with only a handful of companies being able to achieve the same. In FY08 alone, the company made 28 discoveries including 15 new prospects and 13 new pools (at discovered blocks).  ONGC has drawn an outlay of Rs 130,043 crore for the XIth Plan (2008-2012), which is 72.5 per cent higher than Rs 75,380 crore spent in the Xth Plan (2002-07). Since 90 per cent of the planned expenditure is towards E&P activities, it should help the company maintain the trend in RRR as well as increase production of oil and gas going forward.  ONGC expects to increase its domestic production of oil and gas by 3.2 per cent to 252.5 million metric tonnes (MMT) during the XI Plan period as compared to the Xth Plan.  The OVL advantage
A little over a third of the planned expenditure is provided for OVL's expansion plans. OVL, a wholly owned subsidiary of ONGC which looks after the group's global E&P operations, has been very aggressive in securing equity stakes in oil and gas assets abroad.  It added 11 new assets in FY08 and currently owns stakes in 38 projects (only 7 are producing assets, 6 under development and 24 in exploration stages) in 18 countries.  And it continues to add more