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ONGC gearing to put exploration back on track

ONGC gears to delayer authority for greater efficiency, transparency and result-oriented approach.

india Updated: Nov 24, 2006 08:54 IST

Winds of change are set to sweep India's state-owned exploration behemoth Oil and Natural Gas Corp (ONGC) as it gears to delayer authority for greater efficiency, transparency and result-oriented approach.

The makeover to inculcate business sense in scientists is set to start with the exploration team followed by all other areas of critical operation including production, drilling, engineering and geo-sciences.

"We are getting back on track to give more thrust to exploration activities backed by definite training programme," said a senior ONGC management official.

"We are planning to induct around 250 people in various streams allied with exploration activities and also trying to get back some of the trained people with good potential who had left ONGC for private companies in the last few years."

ONGC had witnessed higher than normal attrition rate in the last two years with over 300 people quitting, including some of its best technical experts.

Now based on feelers received from some of the old hands, ONGC is planning to advertise by month end and reappoint many of them as regular employees depending on merit and length of break in service.

Based on expertise and proven track record, many of them can hope for better remuneration and more challenging work profile as ONGC plans to delayer authority.

"We are more or less ready to roll out the exercise to delayer process of decision making and give more authority to officials who will be appointed as acreage managers. We are in the process of identifying the people," ONGC Director (human resources) AK Balyan said in an interview.

"The principal concept is on target. We are not proposing to restrict this exercise to the exploration but will later extend the initiative to other critical areas like operations, production, drilling, engineering and geosciences."

Provoked by the charge of slipping in its core area of exploration, ONGC is under great pressure to increase its oil and gas production in a scenario where it has not made any significant discovery in India in the last few decades unlike private companies including Reliance and Britain's Cairn Energy.

One of the largest Indian companies by market capitalisation, ONGC is also among eight Indian companies on the Fortune 500 list (158 ranking). Through its overseas arm ONGC holds stakes in over two dozen oil and gas properties in 13 countries including Russia, Sudan, Myanmar and Iran.

Accounting for 80 percent of oil and gas production in the country, ONGC has been investing in technology upgradation in the last few years mainly to stem drop in output from its producing fields including Bombay High.

Now after three months of planning a new management order is to be introduced wherein scores of separate business centres will be created initially in the exploration division.

Each strategic business unit will be headed by an acreage manager, who will be empowered to take all decision related to the acreage.

"The new business model is all set to be rolled out soon. The new structure will see each acreage being put in charge of a manager empowered to take all decisions. He would be free to seek guidance from the basin manager or any of the ONGC institutions," said DK Pande, ONGC director exploration.

"The acreage managers will have free powers and be allowed to take decisions. That is the openness I am bringing."

The new system would have provision to allow the acreage manager to directly approach director exploration bypassing the hierarchy if required. In the normal course, the acreage manager would report to the block manager, who in turn will report to the basin manager.

All the seven basin managers will be reporting to the director exploration.

Pandey said various ONGC institutes have also been identified to have definite roles like Keshava Deva Malaviya Institute of Petroleum Exploration (KDMIPE) for concept and ideas development, the Institute of Reservoir Studies (IRS) for development of reservoirs and the Geodata Processing and Interpretation Centre (GEOPIC) for prospecting - such that there is no overlap between them.

According to ONGC sources around 120 officials in the rank of general managers and deputy managers are to be given charge as acreage managers.

By giving them direct access to the director exploration, the aim is to keep him informed of progress at the micro level.

With plans for around 25 percent increase in exploration budget to Rs.60 billion and an incentive based scheme in pipeline, ONGC is hopeful that days of hitting dry wells will become an exception and there will be more oil and gas finds.