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Press Release [FREE Access]
Petro Intelligence » Sarraf Could Win An Extension At ONGC

by R. Sasankan.

D.K. SarrafJournalists often feel compelled to read the tea leaves – and hazard predictions that can often go completely haywire which can result in a loss of face and reputation. I have often stuck my neck out but nowhere near as confidently –and perhaps recklessly – as on September 25, 2010 when I wrote a piece in this online magazine with a headline that asked a loaded question: CMDs for three Oil PSUs: Who Will Head which Company?

It was a time when the top positions at the three biggest oil PSUs- Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) – were up for grabs. There had been fervent speculation in the corridors of power and everyone was trying to figure which way the wind was blowing. That was when I wrote in the column: “Barring a last-minute hitch at the eleventh hour, and if R.S. Butola, Managing Director of ONGC Videsh Ltd, sticks to his plan to appear for interview for IOC’s CMD, the PESB recommendations are expected to be: R.K. Singh for BPCL, R.S. Butola for IOC and Sudhir Vasudeva for ONGC.”

The usual headhunting process is that the Public Enterprises Selection Board (PESB) invites applications from eligible candidates, draws up a short-list and holds interviews. The selected names are forwarded to the Ministry of Petroleum and Natural Gas (MoPNG) and then to the Appointment Committee of Cabinet (ACC) headed by the Prime Minister. In the normal course, it takes about six months to complete the process.

The PESB had started the process and there were several hats in the ring with the usual element of hectic lobbying as politically influential candidates start throwing their weight around. The grapevine was abuzz with names and it was risky to make any sort of prediction – if I got it wrong, the credibility of the portal that I had so assiduously built up would be at stake. Even if two of the three names were correct, it would have been regarded as a journalistic coup. The interviews for the top jobs at IOC and BPCL were due to be held first with the exercise for ONGC to be conducted after a gap of two weeks. There were still 20 days to go before the completion of the entire exercise when we decided to make our prediction. It was a perilous decision. In fact, former ONGC chairman B.C. Bora, who bumped into me a few days after the column appeared, was astonished by my imprudent impetuosity. “How could you make such a prediction,” he asked me.

Readers may often wonder what drives journalists to make such audacious predictions and who our sources might be. Often, it isn’t as reckless as one might think. The trick is to be able to read the wind, to have an antenna that is sensitive to the developments on the ground. One must also learn to apply one’s common sense – and not be swayed by personal prejudices. That is the only way to make a correct judgement.

Murli Deora was the minister for petroleum and natural gas at that time. Journalists who knew him as a politician could not be unaware of the priorities in his scheme of things. Deora never let down anyone who helped further his political mission. Among the candidates who were rated as front- runners in the race, we had some idea about their abilities and their readiness to deliver on the promises they made before their elevation. Our prediction – we carried the photographs of the three worthies along with the article — turned out to be correct in all three cases. We didn’t quibble; we didn’t try to hedge our bets or put in any caveats by mentioning the chances of any other candidate. In fact, almost a month before this article appeared, we had rated the chances of these three candidates as “bright”.

All this is history. We now want to make a prediction about ONGC’s next head honcho. Dinesh Kumar Sarraf is superannuating on September 30 this year. Normally, the selection process for the successor begins almost a year before the incumbent is due to retire. But this time, the exercise has started very late. The PESB has just received 30 applications from which it has to draw up a short-list. The list isn’t very inspiring. Except for one functional director from ONGC, and one each from Oil India and ONGC Videsh, the list does not contain many prominent names. Sashi Shanker, ONGC’s director (T&FS), is rated as eminently qualified for the job. But as the saying goes, beauty lies in the eyes of the beholder. And the beholder here is the political leadership.

Will the PESB go ahead and conduct the interviews of the short-listed candidates? At the outset, I would like to state here that it is difficult to make a definitive prediction this time round. The difficulty arises from our penchant to go beyond the obvious: we see a possibility where Sarraf could stay on as CMD for another year. If that happens, then the PESB may not conduct the interviews at all. If these are held, the government could reject the suggested slate of possible successors on some ground or the other. If Sarraf’s term is extended, the government can justify it on the ground that a mega merger of oil PSUs is planned. The political leadership is believed to rate him as competent and honest.

If that happens, it will be the first time since Col S.P. Wahi that an ONGC CMD’s term will be extended. Wahi managed three extensions even outsmarting a powerful bureaucrat like G.V. Ramakrishna as he was close to R.K. Dhawan – the trusted equerry of the Gandhis.

Sarraf has not lobbied for an extension. Many believe he doesn’t have great lobbying skills. However, he cannot be averse to the prospect of an extended term. But Sarraf will have a problem with an extension. Four years ago, he was selected by PESB to succeed Sudhir Vasudeva and it was endorsed by the ACC well in advance. But at the eleventh hour, a couple of days before Sudhir Vasudeva attained the age of superannuation, Veerappa Moily, the then petroleum minister, made a deliberate attempt to extend Vasudeva’s tenure. This was scuttled when the media raised a hue and cry forcing the intervention of then Prime Minister Manmohan Singh. The real story is that Moily endorsed Sarraf’s selection itself only to ensure that he could be easily side lined and silenced so that Vasudeva could be granted an extension. Many believed Sarraf lacked the political clout to resist such a devious move. Since then, Sarraf has been consistently lucky in making all the right moves to bolster his credentials.

With such a history behind him, Sarraf would not like to scuttle the chances of a duly selected successor. The right course for the government, therefore, is not to go ahead with the selection process itself. The Modi government has already extended the term of SBI’s CMD. Her presence was perceived to be important to facilitate the merger of SBI with other subsidiaries. Sarraf finds himself in a similar situation – and could come through after all.



To download the latest issue 'Volume 24 Issue 7 - July 10th 2017', click here
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Update: Crude Price - Indian Basket
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