ONGC chief asks employees to shape up, shed PSU mindset

Sudhir Vasudeva, new chairman and managing director of Oil and Natural Gas Corp. Ltd (ONGC), in an internal communication to employees, has called for a "radical internal transformation" to help the state-run oil and gas exploration and production company cope with challenges.

Most of this so-called transformation has to do with the attitude of employees, and Vasudeva has communicated the need for them to function in a more corporate manner, shedding the mindset of being a public sector unit (PSU) employee.

A letter was sent out by the chairman of India's largest state-owned company by market value to its employees, on completing 100 days in office. It also speaks of some strategic shifts in the way the company intends to operate.

"My intention is to commence a dialogue with you and requisition your support for radical internal transformation," Vasudeva has written.

The message reminds some senior officials at the company of late Subir Raha, former ONGC chairman. Vasudeva used to head ONGC's corporate communications department during Raha's tenure.

He is the second chairman in ONGC's history to have joined the company at the induction level and risen to the highest post, which gives him an in-depth understanding of the organization, his peers point out.

"The letter shows how the new chairman wants to get work done and wants it done fast," said a senior ONGC official with the company for 30 years, who has worked with Vasudeva closely. "Vasudeva is a realist...he has only two years to go, but they will pave the way for future generations at ONGC."

Vasudeva has invited employees to share their "vision, concepts and ideas freely" by emailing him directly. Employees should "confront contentious issues headlong", and "question questionable orders of superiors".

Sycophancy, complacency, strait-jacketing oneself in "layers of systems and procedures" and "taking decisions at gunpoint" have also been condemned.

The company needs to try and monetize exploratory success with respect to oil and gas finds expeditiously and raise production from marginal fields, he said.

ONGC employees needs to reform "legacy system frameworks and perhaps even radically transform ourselves as individuals", Vasudeva observed. This, he said, was critical given the challenges in exploration and production sector-mature producing assets that will yield diminishing returns, and ageing manpower and infrastructure.

Experts said Vasudeva's efforts are laudable, but may not yield results.

"If he (Vasudeva) got a longer tenure and more power from the government, positive changes are definitely possible," said Shiv Agrawal, chief executive officer of ABC Consultants Pvt. Ltd.

Along with Vasudeva, the role of the government that controls the operations of the firm will be important in paving the way for any transformation.

Vasudeva admitted that some of the technical expertise needed to propel ONGC's growth may not be available in-house, and the company would have to rely on external talent by way of forging partnerships for the same.

It would be germane to consider acquisitions through an alliance with a strategic partner, he said, and identified exploration of oil and gas, improved oil recovery, safety, project management, integrated services management and human resource processes as some of the areas where such partnerships were possible.

Another senior ONGC official said it seemed Vasudeva was more keen on deploying the existing workforce to further the core oil and gas exploration and production business, while relying on external talent for new initiatives.

"For non-core assets, the chairman has emphasized on acquiring them through mergers and acquisitions or equity participation rather than the greenfield route," said the ONGC official who has served the company for 15 years.

Vasudeva also pointed to some of the successes that ONGC had achieved and needed to be built on, such as improved oil recovery.

An official who has been working on an onshore exploration site in the east coast said: "There will be more focus on E&P (exploration and production) it seems and this is a very good sign, as much of our revenues come from here. The chairman, while stating that gas is the future, has even hinted at acquiring assets abroad like shale gas."

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