Question

You work for a business information firm that provides clients with summaries of publicly available information on a range of businesses. Your boss comes to you and says that an increasing number of clients have been asking that the firm develop a catalog of company profiles on businesses that have something to do with the oil and gas industry. The clients want this catalog so that they can quickly identify which companies they may want to carry out additional research on, and possibly have your firm do that research. You’ll need to write company profiles that provide an objective, fact-based summary of:

1. What the company does;
2. How it has performed; and
3. What challenges and/or successes the company has had over the past 3–5 years.

You are to write a profile of either a company that is focused on one activity in the oil and gas industry (e.g., a small exploration and production company, or a small service company whose primary business is drilling wells) or one business unit within a larger company involved in multiple industry activities (e.g., the refining unit of an integrated oil and gas company, or the seismic survey unit of a large, multi-purpose service company).

Answer 1

Ans) ONGC:

Oil and Natural Gas Corporation Limited explores for, develops, and produces crude oil and natural gas in India and internationally. It operates through Exploration and Production, and Refining & Marketing segments. The company also engages in the refining and marketing of petroleum products; transportation of oil and natural gas; and production of liquefied petroleum gas, ethane/propane, naphtha, superior kerosene oil, low sulphur high stock, aviation turbine fuel, and high speed diesel. In addition, it generates electric power through 726 megawatts (MW) gas based power project in Tripura; 51 MW wind power project in Surajbari, Gujarat; and 102 MW wind power project in Rajasthan, as well as generates solar power through a total installed capacity of 23 MW. The company was incorporated in 1993 and is based in New Delhi, India.
For many investors, the main point of stock picking is to generate higher returns than the overall market. But the risk of stock picking is that you will likely buy under-performing companies. We regret to report that long term Oil and Natural Gas Corporation Limited (NSE:ONGC) shareholders have had that experience, with the share price dropping 50% in three years, versus a market decline of about 4.6%. The more recent news is of little comfort, with the share price down 34% in a year.
During the three years that the share price fell, Oil and Natural Gas’ earnings per share (EPS) dropped by 23% each year. This fall in EPS isn’t far from the rate of share price decline, which was 21% per year. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. It seems like the share price is reflecting the declining earnings per share.

Reliance Industries:

Reliance Industries Limited engages in the hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail, digital, and financial services worldwide. The company produces and markets petroleum products, such as liquefied petroleum gas, propylene, naphtha, gasoline, jet/aviation turbine fuel, kerosene oil, diesel, sulphur, petroleum coke, and alkylate. It also provides petrochemicals, such as high-density and low-density polyethylene, linear low density polyethylene, polypropylene, polyvinyl chloride, polyester yarn, polyester fibres, purified terephthalic acid, paraxylene, ethylene glycol, olefins, aromatics, linear alkyl benzene, butadiene, acrylonitrile, poly butadiene rubber, styrene butadiene rubber, caustic soda, and polyethylene terephthalate. In addition, the company explores, develops, and produces crude oil and natural gas; and operates various stores comprising neighbourhood, supermarket, hypermarket, wholesale cash and carry, specialty, and online stores, as well as stores that offer apparel, beauty and cosmetics, accessories, footwear, in-store salon, and a café. As of March 31, 2020, it operated 11,784 retail stores. Further, it provides range of digital services under Jio brand name, as well as involved in the investment in telecom infrastructure business; provides non-banking financial services, insurance broking, and other services; offers fabrics, apparel, and auto furnishing products; and operates various television channels. Further, it operates news and entertainment portals, finance portals, fashion and lifestyle portals, and online ticket booking platforms; publishes magazines; and provides fleet management and highway hospitality services, as well as is involved in content asset monetization, filmed entertainment, and investment arm of Network18 businesses. The company was incorporated in 1973 and is based in Mumbai, India.

Exxon Mobil Corporation:

Exxon Mobil Corporation explores for and produces crude oil and natural gas in the United States, Canada/other Americas, Europe, Africa, Asia, and Australia/Oceania. It operates through Upstream, Downstream, and Chemical segments. The company is also involved in the manufacture, trade, transport, and sale of crude oil, petroleum products, and other specialty products; and manufactures and markets petrochemicals, including olefins, polyolefins, aromatics, and various other petrochemicals. As of December 31, 2019, it had approximately 23,857 net operated wells with proved reserves of 22.4 billion oil-equivalent barrels. In addition, the company produces raw materials, such as polypropylene and isopropyl alcohol for medical masks, gowns, and hand sanitizer. The company was founded in 1870 and is based in Irving, Texas.

Chevron Corporation:

Chevron Corporation, through its subsidiaries, engages in integrated energy, chemicals, and petroleum operations worldwide. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as operates a gas-to-liquids plant. The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil and refined products; transporting crude oil and refined products through pipeline, marine vessel, motor equipment, and rail car; and manufacturing and marketing commodity petrochemicals, and fuel and lubricant additives, as well as plastics for industrial uses. Chevron Corporation is also involved in the cash management and debt financing activities; insurance operations; real estate activities; and technology businesses. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California