Slickly Raha
The manner in which the Oil and Natural Gas Company (ONGC) chairman, Subir Raha, managed to have his way in preventing the petroleum ministry from appointing the director-general hydrocarbon (DGH) VK Sibal as director on the company's board is a rare example of a public sector enterprise standing up to its administrative ministry.
Rather than signalling that the ONGC chief Raha was in the right, the outcome suggests the growing devaluation in the status of the petroleum minister, Mani Shankar Aiyar, and his secretary, Sushil Chandra Tripathi and their inability to make their diktat run on the company. There are allegations that Raha managed to get his way by leveraging the influence exercised by private sector companies on the government and the Congress Party.
Raha survived and the issues raised during the ugly spat that took place between Sibal and Raha also got obfuscated by subsequent developments. The most damning was Sibal's allegation that the ONGC had announced the discovery of a huge gas field in the Krishna-Godavari (KG) river basin without awaiting its
verification by the DGH. Although ONGC top brass tried to make light of these charges, there is a growing view in petroleum circles that the oil companies have been announcing major finds just before the parliament session or key meetings to show that all was well with the companies. Similar objection was raised by DGH when the Gujarat State Oil Company announced a huge find that the state chief minister, Narendra Modi, declared could take care of India's immediate energy needs. As most of these oil companies are listed in the stock exchange, these announcements have helped in raising the value of the shares.
These allegations reinforce the impression available in petroleum circles that things are not quite fine in ONGC. For three years in a row, the concern has failed to replace the reserves it produced. Its last major oil discovery was in 1974. According to official data, the company found new oil reserves equivalent to 43 per cent of the 26 million tonnes it produced in 2002-03, a ratio that fell to 24 per cent the next year before rising to 74 per cent in 2004-05.
What is worse is that the allegations of corruption in the company and poor management of its oil fields and assets have begun to gain credence due to recent happenings. The most dramatic was the manner in which the offshore vessel (OSV) Samudra Suraksha crashed into the Mumbai High North (MHN) upsetting the country's efforts at energy security. ONGC officials blamed the vessel and its anchoring system, but there is still no clarity about the circumstances in which the freak incident took place. A Shiv Sena member of parliament even claimed it to be sabotage pointing out at the blasts that took place when the OSV crashed into the MHN. Intriguingly, the OSV sank when it was being towed to the Mumbai shore despite it having remained afloat for four days after the incident. A new enquiry committee has been instituted by the government to go into the causes of the incident. The committee is headed by former petroleum secretary, TNR Rao, who has been critical of the company for its foreign collaborations in Sakhalin and other places claiming that "Wherever they are going, it is not because of competence. They are sleeping partners. Anybody can do that."
There are allegations of profligacy, too, that have been aired against the way the company has been giving out contracts without its investments really translating into increased oil production. ONGC's highest-ever contract of deep-water drilling was given away even before the geologists had identified the locations. Quite expectedly, the company could not find oil and gas in any of the locations around the country except the already well-established KG basin. Petroleum circles are keenly watching how the mandarins of the ministry would rein in the media-savvy Raha. Watch this space.
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