New Delhi:

Rejecting oil minister M. Veerappa Moily’s proposal to give Sudhir Vasudeva a post-retirement extension, the government on Wednesday appointed Dinesh K. Sarraf as the new head of Oil and Natural Gas Corp. Ltd (ONGC), the nation’s most profitable company.

The Appointments Committee of the Cabinet (ACC) approved the appointment of Sarraf, who at present is the managing director of ONGC’s overseas arm, ONGC Videsh Ltd (OVL).

Sarraf replaces Vasudeva, who turned 60 on Tuesday and is due to superannuate on Friday.

Officials in the oil ministry said ACC, whose members include the Prime Minister, home minister and the minister of the ministry concerned, approved the appointment of Sarraf based on a 30 August recommendation of the government headhunter Public Enterprises Selection Board (PESB). The appointment of Sarraf, 56, comes even as Moily was keen on getting Vasudeva a one-year post-retirement extension on the plea that his appointment was delayed by eight months due to false complaints. Also, ONGC needed his presence to complete ongoing strategic initiatives. The ministry, they said, had forwarded to ACC a proposal containing two sets of options—give Vasudeva an extension or appoint Sarraf as the next chairman and managing director of ONGC.

While Sarraf had all the clearances, Vasudeva did not the have approval of anti-corruption watchdog, Central Vigilance Commission (CVC).

The ministry in a statement, said the extension of Vasudeva was recommended by Moily “purely on merit and in the interest of the organization i.e. ONGC".

OVL, which since inception, had invested $17 billion in 32 assets in 15 countries till 2011, has struck over $11 billion worth deals in the past one year under Sarraf.

As head of ONGC, Sarraf’s immediate task would be to raise the stagnant oil and gas output and aggressively look for more reserves.