Cutting cost, raising output top ONGC chief’s priority list

Cutting cost, raising output top ONGC chief’s priority list
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First Published: Thu, Jul 05 2007. 05 19 PM IST
Updated: Thu, Jul 05 2007. 05 19 PM IST
New Delhi: R S Sharma, who was this week appointed as the permanent head of Oil and Natural Gas Corp (ONGC) after an uncertainty of over 13 months, has set his sight on reversing decline in production from ageing fields and cutting rising expenditure during his tenure till 2011.
In his message to more than 34,000 ONGC employees after being appointed as chairman and managing director, Sharma listed employee attrition and rising payout on kerosene and LPG subsidy as areas of concern.
“The concern areas are decline in production from ageing fields, rising exploration and production expenditure, constraints of oil field services, high subsidy payouts, under-recoveries in gas business and employee attrition,” he wrote.
Sharma, who was director (finance) when the government in May 2006 refused extension of service to flamboyant Subir Raha, has been the acting head of the company since then.
Though he was selected for the top job by government’s headhunting panel PESB in August, the Prime Minister’s Office refused his confirmation in February. Although the PESB selection process invited professionals from private firms to apply, the PMO wanted the invitation to be more explicit. Sharma was again selected and his appointed confirmed by Prime Minister Manmohan Singh on 2 July.
Besides finding new reserves of oil and gas, Sharma promised tackling issues of morale and motivation of employees and opening promotional avenues to arrest the brain drain.
But he was concerned about subsidy payout that rose 42.4% to Rs17,024 crore in 2006-07.
Sharma listed achievements including highest ever profit, rise in oil production and highest reserve accretion of past 13 months but vowed to take strict action against complacency and indiscipline in certain quarters.
“I notice some complacency in certain quarters which must be countered with total resolve. There have (also) been some instances of indiscipline and insubordination. I would seek everybody’s support to deal with such incidents in a very decisive manner,” he wrote.
“As I look back, the preceding 13 months period has been one of the most demanding and challenging phase of my 19 years’ career in ONGC. Nevertheless, I feel contended that during this period, ONGC not only consolidated its stature as an established E&P company of global repute, but also made significant achievements,” he wrote.
Reserve accretion (in-place) during 2006-07 at 169.52 million tonnes of oil equivalent has been the highest in the last 10 years. Crude production rose 7% to 26.05 million tonnes while it posted a net profit of Rs15,643 crore.
ONGC under him has taken investment decisions totaling Rs34,379 crore for revival of production from ageing fields, besides starting work on Tripura power plant and Dahej petrochemical complex. The company also added nine new projects overseas and made two discoveries in Egypt and Iran.
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First Published: Thu, Jul 05 2007. 05 19 PM IST