Govt must take call on ONGC share sale: chairman

The government must take a call on when it wants to go ahead with a share sale in the state-run Oil & Natural Gas Corp, Chairman Sudhir Vasudeva said on Tuesday. The divestment programme expected to raise as much as $2.5 billion.

“The market has been behaving very erratically … The government has to take a call,” Vasudeva said in his first media event since taking office on Monday.

Vasudeva also said ONGC was open to selling stakes to foreign firms in its gas blocks to help raise hydrocarbon output.

Vowing to restore Oil and Natural Gas Corp’s (ONGC) lost glory, the state-owned firm’s Vasudeva said development of new oil and gas fields will be put on the fast-track to raise sagging output and regain the status of the world’s numero uno oil explorer.

Vasudeva, who was yesterday appointed Chairman and Managing Director of the nation’s largest profit-making firm, believes new and marginal fields can help raise crude oil production by about 15 per cent to 28 million tonnes by 2013.

ONGC, which has been without a full-time chairman for over eight months, will see natural gas production rise to 100 million standard cubic metres per day, or 36.5 billion cubic metres per year, by 2016-17 from the current 62 mmscmd, or 26 bcm per annum, he said.

In his first media interaction after taking over the new job, Vasudeva, 57, rued that ONGC has lost the position of the world’s number one E&P company in Platts’ global rankings and the nation’s most valuable company because of a drop in production.

“My first focus will be the core activity of exploration. We will have no stone unturned in revisiting the exploration strategy,” he said.

ONGC plans to invest Rs 26,000 crore in developing 34 small and marginal fields, which will yield some 5 million tonnes of crude oil. “After accounting for the natural decline that has set in ageing and old fields, we will be able to touch 28 million tonnes (per annum) by 2013-14,” he said.

The company currently produces about 24.5 million tonnes of oil per annum.

On natural gas, he was more optimistic, as he believed fields in the Daman formation off the West Coast can alone yield 15 mmscmd. Also, gas discoveries in ONGC’s KG-D5 block, which sits next to Reliance Industries’ prolific KG-D6 gas fields in the Krishna-Godavari basin, off the East Coast, can produce 25-30 mmscmd.

Vasudeva, who has risen from the ranks since joining ONGC in 1976, said the company will prepare a long-term perspective plan, say 15-20 years, that will lay out the roadmap for the company not just in the hydrocarbon sector, but also in alternate energies and nuclear power.

Breaking from convention, he showered generous praises at his illustrious predecessors, calling the late Subir Raha a transformational leader who between 2001 and 2006 steered the company to what it is today, and described R S Sharma as someone who smoothened ruffled feathers after 2006.

The new boss said ONGC will try to prepone the target for 20 million tonnes of oil and oil-equivalent gas production abroad from 2020. Its overseas subsidiary, ONGC Videsh Ltd, already produces 9.5 million tonnes of oil and oil-equivalent gas from 16 properties abroad.

But the biggest concern Vasudeva faces is manpower attrition. Out of the company’s workforce of 33,000 officers and workers, 7,000 are retiring in the next five years. ONGC will hire 1,000 officials every year to bridge the shortfall.

Watch video ….

Agencies