Policy
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Mega Refinery: Indian PSUs Need To Wait For Saudi Investment?
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Iran’s Farzad-B Contract For Indian PSUs Calls For Political Intervention
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One More Consultant To Wrestle With Idea Of Integrating Oil PSUs
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Global Majors Yet To Show Bigger Interest In Fuel Retail In India
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Regulation
ONGC Aims To Generate 30% Revenue From Non-E&P Business
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India’s Natural Gas Production May Go Up By 50-60 MMSCMD
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Rising Onshore Production, Falling Exploration Activities
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Kerosene Import Stops As Consumption Drops
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Alternative Energy / Fuel
Primary and Potential Feedstocks in Asia Pacific Countries
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India Makes Progress In Tapping Non-Conventional Energy Sources
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Research Bodies To Develop Next Generation Fuel Resources
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New Projects
Greka Drilling Gets LoA from ONGC
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Petronet LNG Initiates Talks For Stake In Mundra LNG Terminal
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Joint Venture Bina Refiney To Be Expanded
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Market Watch
Rosneft To Enter Indian Retail Fuel Sector
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Companies
Weir Oil And Gas Services
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Aban Offshore Signs Contract With Brunei Shell Petroleum
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Chart Ferox Prepares Cryogenic Equipment For LNG Import Terminal
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Loyal Equipments Secures New Orders From IOC, RIL
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S-Oil Corporation Uses Technical Expertise From Lloyd’s Register
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Press Release [FREE Access]
Petro Intelligence » Sarraf Awarded A New Bailiwick. Why Now?

by R. Sasankan

D.K. SarrafSome appointments seem perverse – and this one has the all the makings of being capricious as well.

A couple of days ago, the Oil and Natural Gas Corporation (ONGC) issued a press release stating its chairman and managing director D.K. Sarraf has been made a member of the governing body of the prestigious Council of Scientific and Industrial Research (CSIR) for a period of three years. The significance of the appointment is that it has been made by Prime Minister Narendra Modi who is the ex-officio president of the scientific body.

Why is it perverse? The CSIR is a leading scientific R&D organisation set up with a mandate to guide and conduct scientific and industrial research in the country through its 38 R&D laboratories and institutions. But Sarraf’s academic background is in commerce. He is a member of the Institute of Cost and Works Accountants of India and the Institute of Company Secretaries.

One might of course argue that Sarraf – who has been working in the petroleum industry for a number of years and rose to head the state-owned oil and gas exploration giant – may have acquired a scientific temper that he will bring to the CSIR.

Sarraf is due to superannuate in September 2017. The appointment comes amid speculation within a section in the petroleum industry that he would be granted an attractive post-retirement assignment.

As the nomination to the CSIR is a prestigious assignment and has been done directly by the Prime Minister, it seems doubtful that he will be considered for another position. But some petroleum industry mavens do not rule out such a possibility. Sarraf doesn’t have the art of lobbying for position. However, an unsolicited offer may be made, some argue.

Why has Sarraf’s post-retirement assignment become such a matter of speculation? There are several reasons for that. Prime Minister Modi respects PSU executives with a strong sense of integrity and competence. Sarraf showed extraordinary courage when he decided to take Reliance Industries to court on the charge of sucking out gas from its oil block in the KG basin which was right next to the one that had been given to RIL. The tenacity with which he took the case to its logical conclusion was as unprecedented as it was surprising since RIL has wielded enormous political clout over the years.

It is true that Sarraf’s colleague N.K. Verma, ONGC’s director (exploration), was the one who discovered evidence of gas migration and brought it to the ONGC chief’s notice. Being a finance man, Sarraf would not have been able to find this out himself. Veerappa Moily, then petroleum minister in the UPA regime, was furious with the way ONGC proceeded with the case. Had the UPA returned to power in the May 2014 elections and if Moily was once again asked to manage the petroleum ministry, Sarraf would have certainly have lost his job, especially given the fact that he was on a one-year probation for the CMD’s job at that time.

Narendra Modi has not been inimical to RIL. In fact, during his term as Chief Minister of Gujarat, RIL had made massive investments in that state and has expressed complete confidence in Modi’s leadership. At the same time, Modi was equally appreciative of Sarraf’s stand in the fight with RIL and his efforts to protect the interests of the state-owned giant.

Sarraf displayed moral courage once again when he resisted the attempts of then petroleum secretary Saurabh Chandra to foist his friend from BHEL on Petronet LNG Ltd. Sarraf was picked to head the selection committee because he was on probation as CMD of ONGC. A person on probation would normally be expected to abide by the wishes of the secretary since he writes his annual confidential report (ACR) which could make or mar his future as CMD of the petroleum giant. The selection committee was all set to recommend a successor to A.K. Balyan as the MD and CEO of Petronet LNG Ltd. Sarraf managed to outwit the petroleum secretary by recommending Prabhat Singh for the post.

However, Sarraf had to go through an acid test when he was asked to decide whether ONGC was prepared to take over GSPC’s troubled Deen Dayal asset. Prime Minister had a very deep, personal interest in the developments and Sarraf could not afford to flounder.

As details of the GSPC-ONGC deal are still not out, it is difficult to make a definite judgment on the viability of the asset at this stage. But a deal of such a nature between two PSUs would be subject to scrutiny by the Comptroller and Auditor General of India and the Parliamentary Committees. Sarraf would have certainly made some compromises which could be permissible or inevitable in Indian conditions. But it is unlikely that he would have accepted terms that would undermine ONGC’s interests. True, he is neither a geologist nor a production expert. The Board of ONGC would have definitely obtained experts opinion. It goes to Sarraf’s credit that such a deal could be concluded without triggering any major controversy.

At one stage, there was speculation that Sarraf would get an extension of his tenure at ONGC. This is extremely unlikely. No one since Col S.P. Wahi ever got a tenure extension. Moreover, the process for selection of the new CMD has already been set in motion. The only suitable post lying vacant in the petroleum sector is that of the downstream regulator, Petroleum and Natural Gas Regulatory Board (PNGRB). Since it was created through an Act of parliament, it cannot be dismantled so easily. It now exists with a solitary member. This is believed to be a post reserved for retired IAS secretaries and many are jockeying for that position. However, the Modi government has shown little patience with unwritten conventions in Delhi.



To download the latest issue 'Volume 24 Issue 6 - June 25th 2017', click here
Petro Intelligence [FREE Access]
Gas Lobby Clouds Pipeline Option
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PLL Must Rediscover Its Roots
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Sarraf Could Win An Extension At ONGC
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Cheap LNG: A Distant Dream
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Foreign Investment
Tax Battle With Cairn Energy Intensifies
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Overseas Investment
ONGC Videsh Keen On Mexico Blocks
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Gas Scene
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Assessment & Status: Shale Gas / Oil Resource
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In search of areas to increase share of natural gas in energy mix
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Gas for Power- No inclusion in Policy
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Recoverable Coal Bed Methane Reserves as on 1st April, 2016
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Estimated Potential Gas Demand - Diesel & Petrol Replacement
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CGD entities in India need fresh thinking
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Coal Bed Methane Resources in India
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State-wise GA-wise CNG Consumption during 2016-17
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India’s Gas Pipeline Status and the Initiatives
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Update : Capacity Utilization of LNG Regasifcation Terminals
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Coal Bed Methane (CBM) Gas Development in India
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CGD Factsheet as of March 2017
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Sector-wise gas consumption of domestic gas and RLNG - an update
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LNG Imports FY 2011 -12 to 2016-17
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Natural Gas Demand Projections 2017-18 To 2021-22
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Data Section
Monthly Upstream Data
Monthly Downstream Data
Historical database
Data Archives
Special Database
Gross Refining Margins (GRM) of Indian refineries ($/bbl): FY 2016-17
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Market Capitalisation of Oil & Gas PSUs
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Falling Domestic Crude Production and Rising Overseas Production
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Specific Energy Consumption (MBN) - Industry Average
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Cost Comparison of traditional fuels and alternatives
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ONGC’s Reserve Accretion Performance
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Uptrend In High Sulphur Crude Processing Continues
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Power deficit: Region-wise position for April, 2017 (% deficit)
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Variations In Crude & Products Import In April 2017
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PSU Average Distillates Yield (%wt.)
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Operator-wise Exploratory Work under PSC Regime
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Development of Hydrocarbon Discoveries under PSC Regime
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Crude price (Indian basket) and Domestic gas price: Month-wise
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Petroleum Industry Marketing Infrastructure As On April 1, 2017
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LPG Consumption Continues To Surge Despite PNG Penetration
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Export of Petroleum Products
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Significant variations in import of crude oil and petroleum products
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Update: Regasification infrastructure
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Tenders [FREE Access]
Petronet LNG
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GAIL
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Bharat Petroresources Ltd
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