ONGC is best known as the company that searches for and produces crude oil and natural gas in India. However, its complete business is much larger. Through subsidiaries and joint ventures, the ONGC Group is also involved in overseas oilfields, petroleum refining, fuel marketing and petrochemicals.
Unlike a normal retail business, ONGC does not earn money by selling products directly to individual shoppers. It invests heavily in geological surveys, drilling, offshore platforms, pipelines and processing facilities. When commercially useful oil or gas is discovered, ONGC develops the field, produces the hydrocarbons and sells them to refineries, gas buyers and other industrial customers.
The group’s earnings therefore depend on production volumes, crude oil and gas prices, government levies, refining margins and the success of exploration projects.
ONGC Company Quick Overview
| Particular | Details |
| Brand | ONGC |
| Legal name | Oil and Natural Gas Corporation Limited |
| Established | 1956 |
| Headquarters | New Delhi |
| Chairman and CEO | Arun Kumar Singh |
| Business type | Integrated oil, gas and energy group |
| Core business | Exploration and production of crude oil and natural gas |
| Other businesses | Refining, fuel marketing, petrochemicals and overseas exploration |
| Major subsidiaries | ONGC Videsh, HPCL and MRPL |
| FY26 consolidated operating revenue | ₹6,62,247 crore |
| FY26 profit attributable to ONGC owners | ₹41,424 crore |
ONGC operates under the administrative control of India’s Ministry of Petroleum and Natural Gas. Its registered office is located at Vasant Kunj in New Delhi. Arun Kumar Singh remained its Chairman and CEO in 2026 after receiving a one-year extension beyond his original term.
The FY26 figures above are consolidated numbers. They include ONGC’s own exploration and production operations as well as businesses controlled through subsidiaries. ONGC reported consolidated revenue from operations of ₹6,62,247 crore and profit attributable to its owners of ₹41,424 crore for the year ended March 31, 2026.
What Is ONGC’s Business Model?
ONGC follows an integrated energy business model built around the oil and gas value chain.
The parent company’s main role is upstream exploration and production. It identifies areas that may contain hydrocarbons, conducts geological and seismic surveys, drills wells and develops commercially viable discoveries.
Crude oil produced by ONGC is sold to refineries. Natural gas is processed and supplied to customers such as fertiliser companies, city-gas distributors, power producers and industrial businesses.
The group also participates in downstream activities. HPCL and MRPL refine crude oil into petrol, diesel, LPG, aviation fuel, naphtha, lubricants and other petroleum products. These products are then sold through retail outlets, distributors, airports and industrial channels.
How Does ONGC Make Money?
1. Sale of Crude Oil
Crude oil production is one of ONGC’s most important income sources. The company produces oil from offshore and onshore fields and sells it to petroleum refineries.
The amount earned depends on the volume produced and the price realised for each barrel. International benchmark prices, the quality of the crude, exchange rates and government taxes can affect the final realisation.
Producing crude oil does not mean the entire selling price becomes profit. ONGC must recover exploration, drilling, platform, pipeline, employee, maintenance and field-development expenses.
Older oilfields can require additional investment because production may naturally decline over time. ONGC uses enhanced recovery techniques and redevelopment programmes to extract more oil from mature fields.
2. Sale of Natural Gas
ONGC produces natural gas from fields located both on land and offshore. The gas is processed and supplied to customers through pipelines.
Natural gas is used in fertiliser manufacturing, power generation, city-gas networks, refineries and various industries. ONGC earns according to the quantity delivered and the applicable price.
Some domestic natural gas prices are influenced by government pricing frameworks, while pricing arrangements for other categories of gas may differ. This means ONGC may not always receive the same rate for every unit of gas produced.
Natural gas is becoming increasingly important to the company. In June 2026, Chairman Arun Kumar Singh described ONGC as moving towards a more gas-focused position as gas output became a larger part of its production portfolio.
3. Value-Added Petroleum Products
Crude oil and natural gas contain different components that can be separated and processed. ONGC’s facilities produce value-added products in addition to basic crude oil and gas.
These products may include LPG, naphtha, condensate and other hydrocarbon fractions. They can be sold to refineries, petrochemical companies and industrial users.
This provides additional revenue from the hydrocarbons extracted from ONGC’s fields. The actual margin depends on processing costs, market prices and the quantity of each product recovered.
4. Refining and Fuel Marketing
ONGC earns substantial consolidated revenue through refining and marketing companies within its group.
ONGC holds a controlling stake in Hindustan Petroleum Corporation Limited. HPCL operates refineries and sells petrol, diesel, LPG, lubricants, aviation fuel and other energy products through a large nationwide network. ONGC held 54.90% of HPCL as disclosed in the latest available official shareholding information.
ONGC also owns 71.63% of Mangalore Refinery and Petrochemicals Limited. MRPL operates a 15-million-tonne-per-year refinery capable of producing diesel, petrol, LPG, aviation fuel, naphtha, bitumen, polypropylene and other products.
Refining and marketing generated ₹5,84,346 crore of segment revenue before inter-segment adjustments in FY26. However, this figure includes the full value of petroleum products sold and should not be confused with profit. The segment produced ₹28,664 crore in profit before tax and interest during the year.
5. Overseas Oil and Gas Projects
ONGC operates internationally through ONGC Videsh Limited. The subsidiary acquires interests in overseas oil and gas blocks and earns money from its share of production.
ONGC Videsh has interests in projects across countries including Russia, Brazil, Colombia, Azerbaijan, Vietnam, Myanmar, the UAE and Mozambique. Its portfolio includes producing fields, discoveries awaiting development, exploration blocks and pipeline projects.
The overseas segment generated ₹8,443 crore in FY26 segment revenue before adjustments and recorded a segment result of ₹2,236 crore before tax and interest.
Overseas investments help ONGC diversify beyond Indian fields. However, they also expose the company to foreign exchange movements, political uncertainty, sanctions, contract changes and local operating risks.
6. Petrochemical Sales
The ONGC Group produces petrochemicals that are used in packaging, textiles, automobiles, household products and industrial manufacturing.
Petrochemical operations generated ₹14,214 crore of segment revenue in FY26. The segment recorded a loss of ₹382 crore before tax and interest, showing that a business can generate large sales without necessarily producing a profit.
Petrochemical profitability depends on feedstock prices, plant utilisation, product demand and selling prices. When product prices fall while raw-material and energy costs remain high, margins may decline.
7. Joint Ventures and Investment Income
ONGC participates in several joint ventures and associated companies. It may receive dividends, interest or a share of profit from these investments.
The group recognised approximately ₹3,002 crore as its share of profit from associates and joint ventures during FY26. This was separate from the profit generated through its fully consolidated operations.
ONGC’s Major Operating Costs
Oil and gas exploration requires large investments before the company knows whether a field will become commercially successful.
ONGC Group’s major costs include:
- Geological and seismic surveys
- Exploration and development drilling
- Offshore platforms and production facilities
- Pipelines and processing plants
- Refinery crude oil and raw-material purchases
- Employee salaries and technical services
- Repairs, maintenance and transportation
- Depreciation and depletion of oil and gas assets
- Interest and other finance costs
- Royalties, taxes and statutory levies
- Environmental protection and site restoration
In FY26, the group reported ₹81,130 crore in statutory levies, ₹37,391 crore in depreciation, depletion and amortisation, and ₹13,029 crore in finance costs. Survey and unsuccessful exploration-well costs written off together exceeded ₹10,000 crore.
Why the ONGC Model Can Be Profitable
A successful oil or gas field can produce hydrocarbons for many years. Once major infrastructure has been built, continued production may generate strong cash flow, particularly when market prices are favourable.
ONGC also benefits from operating across different parts of the energy chain. Upstream production provides oil and gas earnings, while refining and fuel marketing generate revenue from converting and selling petroleum products.
Its geographical and business diversification reduces dependence on a single field or activity. However, integration does not eliminate risk because upstream and refining profitability can react differently to changes in oil prices.
Main Challenges in ONGC’s Business Model
Exploration is uncertain. ONGC may spend heavily on surveys and drilling without finding commercially recoverable hydrocarbons.
Existing fields also become less productive as they mature. The company must invest in new discoveries, enhanced recovery and difficult deep-water developments to replace declining output.
Crude oil and gas prices can change rapidly because of international supply, demand, conflicts and economic conditions. Statutory levies and government pricing policies can further affect earnings.
ONGC also faces safety, environmental and operational risks. Offshore accidents, gas leaks, equipment failures or project delays can create financial losses and damage public trust.
The long-term transition towards cleaner energy presents another challenge. Oil and gas remain important, but ONGC must balance its traditional business with investments in gas, renewable energy, low-carbon technologies and other future energy sources.
Conclusion
ONGC makes money primarily by producing and selling crude oil, natural gas and value-added hydrocarbon products. Through HPCL and MRPL, it also earns from refining crude oil and selling petrol, diesel, LPG, aviation fuel and other petroleum products.
Overseas production, petrochemicals, joint ventures and investment income create additional revenue streams. Its integrated structure gives ONGC considerable scale, but profitability remains sensitive to energy prices, production levels, exploration success, taxes and operating costs.
The company’s long-term success will depend on increasing oil and gas output, developing discoveries efficiently, managing mature fields and building new energy businesses without weakening its core operations.
FAQs
Q. Does ONGC own petrol pumps?
ONGC itself mainly focuses on exploration and production. However, it controls HPCL, which operates a large network of petrol pumps and sells fuels directly to customers.
Q. Does ONGC sell crude oil directly to ordinary consumers?
No. Crude oil must be refined before it can be used as petrol, diesel or aviation fuel. ONGC generally sells crude oil to refineries rather than individual consumers.
Q. Why is ONGC’s revenue much higher than its profit?
Consolidated revenue includes the full value of fuel and other products sold by refining subsidiaries. The group must deduct crude purchases, raw materials, taxes, royalties, salaries, depreciation, finance costs and other expenses before arriving at profit.
Q. What happens when ONGC drills an unsuccessful well?
The company may write off eligible exploration-well costs when a discovery is unsuccessful or not commercially viable. This reduces profit for the relevant accounting period.
Q. Is ONGC completely dependent on Indian oilfields?
No. Most of its core production is connected with India, but ONGC Videsh owns interests in oil and gas projects outside the country. The group also earns from refining, marketing and petrochemical businesses.
