by R. Sasankan
When
King Lear stands on a heath and rants against his terrible fate, he
roars: “Tremble, thou wretch that hast within thee undivulged crimes,
unwhipp’d of justice”, before going on to lament how he has been “more
sinned against than sinning”. You can often rip lines from Shakespeare’s
tragic heroes and use them to describe more mundane events without
running the risk of descending into bathos. So, today, I am tempted to
talk about the litany of “undivulged crimes” that have cast a long
shadow over the inner machinations of the Oil and Natural Gas
Corporation (ONGC).
Permit me, therefore, to begin this piece by recalling an incident that I
had spoken about not so long ago in one of my columns. It is hard to be
precise about the date but I reckon it must have occurred close to
seven years ago. The Public Enterprises Selection Board (PESB), the
government’s body for selecting senior executives of Public Sector
Undertakings (PSUs), was getting ready to hold interviews for the post
of Chairman and Managing Director (CMD) for the top three oil companies:
ONGC, IOC and BPCL. The interviews were scheduled to be completed
within a period of one month.
Back in those days, this column used to weigh the winning prospects of
various candidates. We never lobbied for anybody but were eager to
predict the outcome. It is a risky job professionally but we always got
it right. We stuck our neck out and made our prediction– and, for good
measure, carried the pictures of the candidates who we thought would be
propelled into the hot seats. The question is: how did we do that? The
secretary from the ministry of petroleum and natural gas attends the
interview and conveys the ministry’s preference. We had a fair idea
about the secret yardstick that the then petroleum minister was going to
use– and we just measured the chances of each candidate on the basis of
that yardstick.
I
have recalled this incident at a time when the ONGC executives are
agitating against the government move to hand over 15 producing fields
of ONGC and Oil India to private parties including foreign companies.
And the sentence that immediately popped into my mind was King Lear’s
expression of his impotent rage against the quiddities of life: “I am a
man more sinn’d against than sinning.” Change the circumstances–
transform a personality into an entity and you might well hear the
lament of India’s premier oil company.
I have been covering ONGC intensely as it was basically based in New
Delhi though its headquarters is supposed to be in Dehra Dun. Oil India
was geographically far away and its activities were mostly confined to
the states of Assam and Arunachal Pradesh. If I ever get to write a book
and piece together my memories of events and people, I dare say that it
would be titled: The Rape of ONGC. Strong words? Definitely, but no
other title can sum up the history of this hapless company.
May I now recall for the readers another interesting incident that
relates to the downstream giant, Indian Oil Corporation (IOC)? The PESB
had selected an executive director of IOC for the post of director.
There is normally a space of two to three months between the
recommendation and issuance of the appointment letter. This is an
agonising period for the selected candidate. Our IOC friend suddenly
decided to visit Chottanikara temple in Kochi. I was intrigued. Why
Kochi when there are quite a few other well-known temples in the
country? Cochin Refinery Ltd was generous enough to provide him with a
car to move around the city. I alerted a friend in CRL about the
impending visit. It finally turned out that the main purpose of the
visit was not to seek the blessings of the Goddess of Chottanikara
Temple but to call on a Gulf-based Malayalee businessman who is closely
connected with the petroleum trade. The mission was to raise additional
resources for the political boss without which the appointment would not
go through. Our friend was so resourceful that he climbed further to
become the CMD of the company with the blessings of the same political
boss. This does not mean that competent people are not elevated to top
posts in oil and gas PSUs. They do make it to the top but some corporate
has to arrange for the mandatory lump sum payment that has to be made
to the party in power. They do not have to make the payoff themselves.
The corporate agents will do the job and will then have to be
compensated through the award of contracts. It is a terrible
cash-for-favours system that has been in operation since the 1980s.
In
the 1980s, the PESB recommended a south Indian executive of ONGC for
the post of finance director. Back in those days, ONGC which was a
Commission had the post of member instead of director. Immediately after
he was recommended, the CBI raided his office and residence and claimed
to have recovered incriminating documents. The CBI kept quiet for the
next two months to enable the person who was ranked second on the
panel’s shortlist was appointed. Within a couple of weeks after the
announcement was made, the CBI cleared the name of the “raided”
candidate. He left ONGC and took up an assignment with a private company
in Bombay. Remember this happened not in some sub-Saharan African
country but in the bluest of the bluechip PSUs in the world’s largest
democracy.
I do not want to bore readers by reeling off more stories. Look at the
performance of ONGC in the first 20 years of its existence. Its
performance in discovering hydrocarbon compares with the best in the
world. But once Bombay High was discovered, the situation dramatically
changed. Greedy politicians colluded with the corrupt officials within
ONGC. All the ruling parties-- the Congress, the National Front, NDA or
UPA-- were party to the loot of ONGC. Wrong people were placed in high
places. Even the PESB is a party to the rape of ONGC. How could PESB
agree to make a driller without even a day’s experience in production as
member in charge of production? Hydrocarbon production is a highly
specialised area. This is precisely why ONGC fields face production
problems.
In the 1980s and 90s, ONGC enjoyed the distinction of owning the largest
fleet of rigs among all upstream oil companies in the world. Normally,
E&P companies, on the basis of seismic survey, identify prospective
areas and hire drilling rigs. Like any other major business order in
E&P, Purchase of rigs too carries an attractive kickback which
almost totally goes to the political leadership. Saddled with such a
large fleet of rigs, ONGC had to keep drilling without bothering too
much about the prospectivity of the location. This, in turn, got ONGC
the distinction of drilling the largest number of dry holes among
E&P majors.
Dharmendra Pradhan inherited an ONGC which was malevolently twisted out
of shape. ONGC still survives and can legitimately claim to have a large
talent pool. Even competent and honest chief executives and directors
could not resist directives from the political bosses to funnel
kickbacks. It would be uncharitable to blame ONGC-ians for their
perceived lack of competence in maximising crude production. The present
government plans to hand over 15 fields to private parties. I
appreciate Pradhan’s intention to raise domestic production to meet
Prime Minister’s objective of reducing fuel imports. As I pointed out in
a previous column, it was a production expert of ONGC who offered to
double Bombay High’s production at a negligible additional cost. No
other production expert in the world could have achieved such a feat. It
was the political leadership that shied away from the offer because the
cost of his project was negligible.
Crude production should go up but the remedy prescribed by Pradhan looks
worse than the disease. First of all, he should not have depended on
the DGH which, in my view, is not competent to decide on such matters.
Its colossal blunder in assessing the reserves of DI D3 fields of KG D6
and the subsequent failure to detect gas migration from ONGC fields in
KG block to adjacent RIL block remain fresh in memory. The country’s
petroleum industry would not have forgotten the choicest epithets used
by the ONGC management under D.K. Sarraf to blast the DGH leadership
before the Shah Committee.
I acknowledge that there are corrupt elements within ONGC. These people
thrived on political patronage. If professionalism is restored, and
political interference is minimised, ONGC can still be restored to its
pristine glory. ONGC and Oil India have got the right leadership and
they need to be supported by the political leadership.
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