CompanyGraph
Oil & Natural Gas Corporation Ltd.
ONGC · India
Holds India's oldest oil and gas licences over Mumbai High and Assam's fields, piping crude directly to state refineries no rival can reach.
Oil & Natural Gas Corporation holds pre-competitive production licences over Mumbai High offshore and the Assam onshore fields — the two formations that together define India's domestic crude output ceiling — and feeds state refineries through dedicated pipelines that were built specifically for those fields and connect directly into Indian Oil Corporation refining units designed around ONGC's feedstock. Because the pipelines, gas processing facilities, and refinery intakes are all physically attached to ONGC's own production sites, a downstream refinery cannot simply switch suppliers — it would need to build a parallel supply chain from scratch. The licences themselves reinforce this: the Directorate General of Hydrocarbons has no legal mechanism to award a new production sharing contract over acreage already held under a valid one, so no competitor can step in even if ONGC struggles to justify the capital for the increasingly expensive enhanced oil recovery that a maturing Mumbai High reservoir now requires. The company's unassailable position and its depletion problem are the same fact seen from opposite sides — the same licence that locks out every rival also locks ONGC into shouldering a reservoir whose pressure, and whose economics, will only get harder with time.
How does this company make money?
ONGC earns money for every barrel of crude oil it sells to Indian refineries, with the price tied to international oil benchmarks. It also sells natural gas by the cubic metre under long-term contracts to power plants and fertiliser companies, though the Indian government sets the price for those sales rather than the open market. On top of that, ONGC pays the Indian government a royalty — a fixed percentage of the value of everything it produces — which means the government takes a share before ONGC counts its own earnings.
What makes this company hard to replace?
The pipelines running from ONGC's Mumbai High platforms and Assam field centres directly into state refineries are fixed in the ground — switching to a different crude supplier would mean building a new pipeline, not signing a new contract. The production sharing contracts between ONGC and the Indian government cannot be handed to another operator. And the gas processing facilities that clean and prepare hydrocarbons before they enter those pipelines are physically attached to ONGC's own production sites, making them impossible for downstream users to duplicate without rebuilding the entire supply chain.
What limits this company?
Mumbai High's underground pressure has been falling for years. As pressure drops, ONGC must inject special chemicals and drill deeper just to keep each barrel moving toward the surface. Once the pressure falls below a certain geological threshold, those techniques stop working — and that threshold is set by the rock, not by how much money or technology ONGC throws at the problem.
What does this company depend on?
ONGC cannot operate without drilling rights and production licences issued by India's Directorate General of Hydrocarbons. It also needs specialised offshore drilling rigs built to handle Arabian Sea conditions, pipeline access agreements with Indian Oil Corporation and other state refineries, the physical platform infrastructure sitting on top of Mumbai High, and a steady supply of enhanced oil recovery chemicals to keep pressure high enough in ageing reservoirs.
Who depends on this company?
Indian Oil Corporation refineries treat ONGC crude as their main raw material — if ONGC stopped delivering, those refineries would have to buy replacement oil on the international spot market at much higher cost. India's domestic LPG network, which supplies cooking fuel to households across the country, runs on associated gas that comes out of ONGC's wells as a byproduct. Indian petrochemical plants also burn and process ONGC's natural gas as both a fuel and a raw ingredient; if that supply stopped, they would need to import gas instead.
How does this company scale?
Geological knowledge — maps, well data, field records — can be shared across multiple projects at almost no extra cost, which means each new basin ONGC explores benefits from everything learned at Mumbai High and Assam. But every new field still needs its own offshore platform or onshore facility built from scratch in a fixed location, and the stretches of Indian territory that have not yet been drilled are progressively harder and more expensive to reach.
What external forces can significantly affect this company?
Indian government energy security policies can require ONGC to hit specific domestic production targets and shape where it invests capital, regardless of what the economics suggest. Monsoon seasons regularly interrupt offshore drilling in the Arabian Sea and slow down ground logistics in eastern India around the Assam fields. Because drilling equipment and specialist technology must be imported and paid for in dollars, while most of ONGC's revenues arrive in rupees, a weaker rupee raises costs without raising income.
Where is this company structurally vulnerable?
If the Indian government passed a law forcing ONGC to give up its mature fields — putting Mumbai High and the legacy Assam blocks out for competitive bidding because output has fallen — the legal protection that keeps every other operator out would disappear. That protection is the entire foundation of ONGC's position. Without it, the company becomes one bidder among many rather than the only operator allowed inside those fields.