media report
Next ONGC CMD: Explorer, Diplomat...
14/10/2010  |  The Economic Times, Soma Banerjee

In 2004, midway through his tenure as the head of ONGC, the late Subir Raha sent an email to all employees, asking for workhorses to increase the company's revenues five-fold to $50 billion. He wrote: "...I need many, many things. One item in this list is 25 fire-eaters -- people who have fire in the belly. The cadre, age, rank, gender don't matter...are you up for 16-hour days...for no reward except your personal sense of let me know in the next five days, in not more than 250 words, why I should even call you for an interview. I'm waiting..."

Within 48 hours, about 100 employees responded to this unusual communication from the head of a government company. Even today, people who've spent a lifetime at ONGC, and seen chiefs come and go, talk about Mr Raha as a "transformational" leader. The numbers from his five-year tenure show a company climbing several levels: a three-fold increase in revenues and profits, an eight-fold increase in market capitalisation.

His successor, RS Sharma, has been able and competent. He's taken ONGC forward at cruise pace. But for all his good intentions, the leap to the next level has eluded him. As the baton passes again, with the government commencing interviews for the next ONGC chairman and managing director (CMD) on October 19, the question comes back: what kind of leader will ONGC get?

What kind of leader ONGC gets is a complex interplay of priorities, potential, politics and bureaucracy. What it needs today -- when there's a hint of uncertainty running through its house and private players are chipping away at its monopoly -- is more straight-forward. "We need a risk-taker, a transformational leader," says a top ONGC official who has spent 25 years at the company. To drill a level deeper, he (there are no women in contention) the CMD should possess the following five attributes -- and, equally importantly, should express them in decision-making.

He should have the mindset of an explorer

In spite of diversifying into oil refining with the acquisition of MRPL in 2002, at its core, ONGC remains an oil and gas exploration company. Its old wells, most of which were acquired when it held a monopoly over oil exploration, are depleting. And when it comes to commercialising new finds, the bluster and urgency, so essential in a high-risk business like this one, is missing.

The new kids on the block are scoring over the veteran. Both the big new finds in the recent past in India have been made by private players: Reliance Industries in the Krishna-Godavri ( KG) Basin in 2002 and Cairn India in Rajasthan in 2004. Although ONGC is Cairn's partner in the latter project, it has nothing big to show for itself. "ONGC's last significant discovery was at Gandhar (in Guajarat) in the eighties," says BC Bora, who was the chairman of ONGC between 1995 and 2001. "It needs to convert some finds into production soon."

The relative dry run is not for want of entering new territory. Since 1999, when the sector was opened to private players, ONGC has bagged 120 of the 242 blocks offered; 94 of those blocks are operational, while 26 were surrendered. It's not even for want of discoveries. In the last five years, four of them during Mr Sharma's tenure, ONGC has made 105 discoveries and spent about $25 billion on those new finds. Yet, its total oil and gas production during those four years has dropped by 5%.
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