ONGC Group had registered net profit of Rs. 62,215.52 million on revenue of Rs. 249,030.77 million during the financial year, as reported in the consolidated financial statements of the Company and the subsidiary.
In the first quarter of the current financial year, the net profit of ONGC Group was Rs 19,826.8 million, on revenue of Rs. 76,196.5 million. These results are based on provisional pricing of crude sales; it is reasonably expected that on finalization of the crude pricing effective 1st April 2002, revenue and profit figures will be further improved.

Securing Sustained Growth

Of the many achievements to the credit of the people of the Company, reserve accretion of 191 Million MT Oil plus oil-equivalent Gas (O+OEG) from domestic and foreign acreages in 2001-02 gets the pride of place. There were 7 discoveries in India, including one gas field in deep waters. This is the highest reserve accretion recorded in a year since discovery of the Mumbai 
High field. 
To sustain this positive trend, the exploration effort is accelerated and expanded with the highest-ever mobilization of offshore survey vessels and drilling rigs; the Company will be investing some two million US Dollars every day on this account, with significant allocation for the deep-water campaign.
The in-house capability for data Acquisition Processing and Interpretation (API) is being upgraded to best-in-class technology through induction of state-of-the-art hardware, software and equipment. You would have noted the highlights of the valuable work being done in the institutes of the Company. Recent introduction of volume-based processing and virtual reality technique are significant additions to the API capability of the Company.
Reversing the trend over the past decade, substantial investments have been authorized for acquisition of new equipment and modernization of existing units for drilling; work over, well stimulation and crisis management (blow-out control). This exercise will help close the gaps in technology and capability. An Industrial Engineering Team is scrutinizing operating costs, systems and procedures in order to improve profitability.  Overhaul and replacement of ageing, obsolescent facilities are being taken up in a phased manner. These measures will improve cost- effectiveness, efficiency, safety and environmental protection.
In the first phase of the Corporate Rejuvenation Campaign (CRC), the process of organizational restructuring has been completed across the Company, in a matter of weeks. The positive impact of role clarity and empowerment is being felt within and outside the company. The campaign is now focused on organizational reorientation through transparency, consistency and accountability. This is not easy, but it is happening. Comprehensive reform of the HR processes, despite the constraints of PSU (Public Sector Undertaking) policies and practices, is the key to the future, since people make the organization.

Creating Value

The core business of Exploration & Production (E&P) of hydrocarbons is being enhanced to unlock the value in each hydrocarbon molecule.
The range of products fractionated from Natural Gas and Condensate is being expanded with schemes for production of ATF (Aviation Turbine Fuel) and MS (Motor Sprit) of Bharat II specifications. An exercise to examine techno-commercial feasibility of further value additions is in progress.
Plans have been drawn up for phased monetization of unexploited reserves of oil and gas. In the coming weeks, RFPs (Request for Proposal) will be invited for Service Contracts to bring several marginal fields into production. For the isolated gas fields, similar low-cost development on Gas-to-Wire (GTW) concept is envisaged.
Forty years ago, the Commission had proposed to set up a refinery in turn, would lead to manufacture of petrochemicals. Gas processing was initiated by the Commission thirty years back. Instead of integrated development, these downstream stages of the Hydrocarbon Value Chain were assigned to different PSUs; one of these PSUs has now been transferred to the Private Sector. With the end of Administered Pricing, it is high time to go back to the globally established paradigm of vertically integrated oil & gas business. Sectoral oil  & gas companies will always remain vulnerable to the volatility of the global pricing cycles; the incremental transaction costs of sectoral companies will always reduce potential value for the customer; sectoral investment plans will always miss out on the optimization opportunity.
Last September, the Company had commissioned a mini-refinery of 0.1 MMT pa  (Million Metric Tonnes per year) capacity at the isolated Tatipaka field in Andhra Pradesh. Last September, the process of acquisition of Mangalore Refinery & Petrochemicals Limited (MRPL), a state-of-the-art 9.69 MMT pa refinery, is nearing completion. The Company is also acquiring a stake in the Mangalore-Hasan-Bangalore pipeline (MHBPL).
ONGC is the only Indian refiner with the capability to run own refineries on equity crude. This provides the essential strength to enter the market, with the Marketing Rights granted in May 2002, against the formidable entry barrier posed by the existing players in public and private sector. Increasing competition in the decontrolled market will benefit the customer in deriving better satisfactions and the company, in the pursuit of excellence.

Making Money Work

ONGC is today recognized as the Most Valuable Company in India, by market capitalization; the Company is also the Most Valuable in terms of net worth. With the end of Administered Pricing, ONGC is entitled to market-determined price for crude effective 1st April 2002; hopefully, the Company will be allowed to implement market-determined pricing for Natural Gas in the near future, ending decades of subsidization at the cost of the Company. These overdue pricing corrections will enable the Company to aggressively invest in the future.
ONGC is engaged in a major campaign for high technology, high-cost, high-risk exploration in deep waters and frontier basins. Ongoing exploration in the producing basins is being accelerated, with improved technology and equipment. Induction of modern equipment on survey vessel Sagar Sandhani was held up because of the US sanctions on India, causing considerable delay till alternate sourcing could be organized; the vessel is now back in operation. Action for acquisition of a second vessel has been initiated. Similarly, procurement of state-of-the-art equipment for onshore geophysical survey is in process. Computing capability is being continuously upgraded. All these efforts are focused on the strategic goal of adding as much reserve in the domestic acreages in the twenty-year period beginning 2001, as was accreted in past forty five years.
The global industry practice is to carry the exploration risk on the equity of the company; necessarily, the debt-equity ratio is minimized. Earlier this year, the outstanding foreign currency loans were prepaid, with specific approval from the Government, making the Company debt-free.
Another strategic goal of the Company is to improve the recovery factor in the producing fields from the average of 28% to 40% over the same twenty-year period. This calls for aggressive use of IOR/EOR (Improved Oil Recovery / Enhanced Oil Recovery) techniques.
Out of the 115 fields now in production, Mumbai High contributes 40% of the oil & gas output, and 14 other fields provide 35%. Project components of the Mumbai High redevelopment schemes are being completed on time. Contracts are being awarded with provision for bonus for early completion, and on competitive rates leading to substantial savings. Using advanced techniques, the drillers of the Company are achieving remarkable success in completing wells ahead of time, under budget and with significantly higher production rates. Engineering design audit has been introduced as standard procedure, improving designs and reducing costs. CRINE (Cost Reduction in the New Era) concept, developed in the North Sea context for optimizing quality and cost through client-contractor cooperation, has been adapted. The quality of the project process is being externally audited on ongoing basis. 
Currently, 22 IOR/EOR schemes are under implementation. After laboratory studies, 8 pilots have been approved, and 29 pilots are being projectised; another 22 proposals are in laboratory stage. This unprecedented effort will substantially improve the recovery factors.
Reservoir management is high priority for the Company. Voidage compensation rates are now on positive trend, restoring reservoir energy. Surface facilities for production are being de-bottlenecked, with remarkable benefits in some cases, on the in-house OOR (Own Oil Recovery) concept. Several projects to control gas flaring are in different phases of completion. A campaign to reduce the number of non-flowing wells is under implementation; “Well Flowing Wells” is the corporate slogan today.
Three development projects to bring 182 Million MT O+OEG (Oil plus Oil- equivalent Gas) reserves into early production are now ready for launch, with production targeted in 30 months.
On equal priority, the funds of the Company are being deployed for acquisition of equity Oil & Gas abroad. Two such transactions have been completed a few weeks back by the wholly - owned subsidiary, ONGC Videsh Ltd. and several deals are under negotiation. Post-Sakhalin, ONGC Videsh has become a credible player in the global Oil & Gas business. With the assets in hand, and considering reasonable probability of success in the ongoing negotiations, OVL is well on the way to meet the third strategic goal of sourcing 20 MMT p.a. O+OEG by 2020. 
The investment policy of the Company has been reviewed in the context of the prevailing trends of Rupee and Dollar interest rates, oil and gas prices, and in case of trans-national acquisitions, competitive pressures.