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Press Release [FREE Access]
Petro Intelligence » ONGC: Triumph Tinged By Taint

by R. Sasankan

Justice A.P. ShahThere is a sense of satisfaction that a journalist feels when he gets it spot on: when his forecast plays out just right. Allow me to feel more than a little chuffed that my report of August 24 - Gas Migration: Collusion Or Laxity – unerringly anticipated the conclusion that Justice A.P. Shah would draw from the evidence placed before him.
Justice Shah concluded that the management of Oil and Natural Gas Corporation had prior knowledge that Reliance Industries was leaching gas from the former’s block in the Krishna-Godavari basin long before the public sector giant filed a complaint in July 2013.

I wrote in my article: “There is certainly substantial merit in his (a former senior executive of ONGC) contention that the ONGC leadership knew about the interconnectivity of the reservoirs. Still, it looks difficult for me to impute that some key people in the ONGC management were in cahoots with those who had decided to suck out gas from the neighbouring field. A journalist needs solid evidence and ONGC hasn’t given me any. At best, one may say that there was some laxity. When I told an expert about my conclusion, he drily said: “Such laxity without cause is inexplicable.”

D.K. SarrafI was elated to learn that the A.P. Shah Committee report, which was submitted a week later on August 31, arrived at the same conclusion about ONGC’s role in the gas migration saga. The Report says: “There is substance in DGH contention regarding ONGC’s prior knowledge… Prima facie, ONGC had prior knowledge and chose not to take action until 2013.”

Justice Shah has now asked the government to carry out an investigation to determine the reasons for ONGC’s inaction until 2013. The learned judge did not use any harsh words in his report because his role was advisory with no adjudicatory powers. He did not use the word collusion; nor did he upbraid the ONGC management for failing to submit the documents that he had asked for. But the mild reproof in his report has the weight of a sledgehammer that can burst open a sordid can of worms: “Pertinently, ONGC promised to produce before the Committee the new knowledge of connectivity /continuity that it had purportedly acquired between 2007 and 2013 but did not do so.”

Dharmendra PradhanThe Shah committee was equally scathing while commenting on RIL’s role in the so-called gas migration saga. ONGC chairman D.K. Sarraf won the battle by cornering RIL and substantiating the charges against it. But any compensation that RIL has to pay out – the amount will be determined later – will go to the Government of India and not to ONGC. Sarraf had also trained his guns on the two regulators who seem to have been let off.

Sarraf hasn’t entirely covered himself with glory. He has laid himself to criticism by failing to hand over relevant documents that might have nailed the suspicion that his predecessors were in some way complicit in allowing RIL to suck out the gas from ONGC’s field without a whimper of protest.

R.S. SharmaIt appears that the ONGC management, in its anxiety to protect some of its former colleagues, shied away from presenting records that would have implicated the regulators as well. I had reported in a previous column that RIL had sought and secured permission to carry out a 3-D survey in ONGC’s block. My source was none other than a former exploration director of ONGC whose tenure of service coincided with this crucial period. Why was this fact hidden from the Shah Committee? This information would have landed both regulators and the former ONGC leadership in trouble.

Sudhir VasudevaJustice Shah laments that “prompted by DGH submission, the Committee directed ONGC to submit before the Committee records/files related to the analysis /interpretation of the 3 D Q-marine seismic data along with details as to when the G&G data became available, when the so-called detailed interpretation was commenced at ONGC and to explain the reasons as to why it took six years for ONGC to raise allegations regarding continuity in the present matter. However, no such records/files were submitted or explanation provided to the Committee”.

Justice Shah clearly delivered a rap to ONGC’s present leadership. The Committee is obviously imputing that the current ONGC management has been trying to protect the colluders within the organisation at that crucial time. The Modi government cannot shy away from an investigation into the matter.

D.K. PandeSo, who in ONGC’s leadership team are in real trouble? R.S. Sharma was the chairman from 2006 to 2011, the most critical period. Sudhir Vasudeva, who succeeded Sharma, appears to be off the hook since ONGC initiated the move to file the complaint against RIL when he was the CMD. It was on July 22, 2013 that ONGC wrote to the Directorate General of Hydrocarbons (DGH) stating that G&G data indicated evidence of lateral continuity of gas pools of ONGC blocks with pools in the RIL block and urged DGH to provide it with RIL’s production and well data. This communication could not have been without the approval of Sudhir Vasudeva who was the CMD. R.S. Sharma is a finance man and not a geologist. So is D.K. Sarraf. The question now is whether Sharma failed the test of integrity? The probe will determine that.

S.V. RaoIt is true that geologists, particularly the director (exploration), play the most crucial role in an issue like gas migration. D.K. Pande was director (exploration) from September 2005 to February 2011, the most relevant period, and had one of the longest tenures ever enjoyed by an ONGC director. He was succeeded by S.V. Rao whose tenure lasted till March 2013. ONGC acted on the issue in July 2013, about the time when N.K.Verma became the new director (exploration).

How could Verma act with such alacrity in a matter of a few weeks after assuming office? Did some fresh G&G data suddenly land on his table? His predecessors had been recognised as competent professionals. Verma was highly rated as well but he did not possess an extraordinary expertise in geology that the others didn’t have. So, if there was no fresh evidence that had suddenly emerged, it is pretty reasonable to conclude that either Verma had prior knowledge about a reluctance on the part of his predecessors to act on the available evidence or that some bright youngsters within the exploration division had been feeding him with information about the developments.

N.K. VermaHe handled the issue as a top priority item. If he had not been convinced about the merits of his move, Verma would not have dared to take on RIL. Luckily for him, the next chairman happened to be D.K. Sarraf who demonstrated exemplary courage in taking on both RIL and the MoPNG and that too under a political leadership that had extremely friendly relations with RIL.

Ever since, Sarraf, a simple, honest and unassuming man, has been striding the corporate stage like a Colossus. He certainly has towered over the other CMDs in the public sector. But it now turns out that he too had an Achilles heel: a weakness that has in some way diminished his stature. By refusing to abide by Justice Shah’s directive to submit relevant records and files to ascertain whether ONGC had prior knowledge about the interconnectivity of the reservoirs, Sarraf chose to save his former colleagues from the guillotine. Fate, however, intervened when Justice Shah outsmarted him by asking the ministry of petroleum and natural gas to probe the matter further.

Sarraf is an Indian and he must have realised by now that there is a limit to honesty in this country. However, by cornering RIL and exposing the gas migration scam, he has done a great service. That by itself has cemented his position among the great leaders within India’s public sector.

ONGC is the country’s pride and the nation expects its chief executives and directors to espouse certain ethical values. The proposed probe will reveal whether they really deserved to occupy the exalted positions they did.



To download the latest issue 'Volume 30 Issue 24 - March 25, 2024', click here
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